[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
PAYING FOR A COLLEGE EDUCATION: BARRIERS AND SOLUTIONS FOR STUDENTS AND
FAMILIES
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HIGHER EDUCATION,
LIFELONG LEARNING, AND COMPETITIVENESS
COMMITTEE ON
EDUCATION AND LABOR
U.S. House of Representatives
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, MAY 1, 2007
__________
Serial No. 110-29
__________
Printed for the use of the Committee on Education and Labor
Available on the Internet:
http://www.gpoaccess.gov/congress/house/education/index.html
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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 May 1, 2007...................................... 1
Statement of Members:
Altmire, Hon. Jason, a Representative in Congress from the
State of Pennsylvania, prepared statement of............... 57
Hinojosa, Hon. Ruben, Chairman, Subcommittee on Higher
Education, Lifelong Learning, and Competitiveness.......... 1
Prepared statement of.................................... 3
Keller, Hon. Ric, Senior Republican Member, Subcommittee on
Higher Education, Lifelong Learning, and Competitiveness... 3
Prepared statement of.................................... 4
Statement of Witnesses:
Boyle, James A., president, College Parents of America....... 34
Prepared statement of.................................... 36
Martin, Dr. A. Dallas, Jr., president, National Association
of Financial Aid Administrators (NASFAA)................... 6
Prepared statement of.................................... 8
Attachment A: Suggested Metrics and Key Performance
Indicators (KPIS)...................................... 12
Attachment B: Calendar Year and Ongoing Timeline for
Director............................................... 13
Pressnell, Claude, vice chairperson, Advisory Committee on
Student Financial Aid...................................... 17
Prepared statement of.................................... 19
Reauthorization Proposal: A Federal Partnership for
Access and Persistence................................. 28
Swarthout, Luke, higher education advocate, United States
Public Interest Research Group (U.S. PIRG)................. 30
Prepared statement of.................................... 32
PAYING FOR A COLLEGE EDUCATION:
BARRIERS AND SOLUTIONS FOR
STUDENTS AND FAMILIES
----------
Tuesday, May 1, 2007
U.S. House of Representatives
Subcommittee on Higher Education,
Lifelong Learning, and Competitiveness
Committee on Education and Labor
Washington, DC
----------
The subcommittee met, pursuant to call, at 1:38 p.m., in
Room 2175, Rayburn House Office Building, Hon. Ruben Hinojosa
[chairman of the subcommittee] presiding.
Present: Representatives Hinojosa, Tierney, Wu, Bishop,
Yarmuth, Scott, Davis of California, Hirono, Keller, Petri,
Foxx, Kuhl, Castle, and Biggert.
Staff present: Tylease Alli, Hearing Clerk; Gabriella
Gomez, Senior Education Policy Advisor (Higher Education);
Lamont Ivey, Staff Assistant, Education; Ricardo Martinez,
Policy Advisor for Subcommittee on Higher Education, Lifelong
Learning and Competitiveness; Rachel Racusen, Deputy
Communications Director; Julia Radocchia, Education Policy
Advisor; Kathryn Bruns, Legislative Assistant; Amy Raaf Jones,
Professional Staff Member; Victor Klatt, Staff Director; Linda
Stevens, Chief Clerk/Assistant to the General Counsel; and
Sally Stroup, Deputy Staff Director.
Chairman Hinojosa [presiding]. A quorum is present, and the
hearing of the subcommittee will come to order.
Pursuant to Committee Rule 12(a), any member may submit an
opening statement in writing, which will be made part of the
permanent record.
I now recognize myself and will be followed by my friend,
Mike Castle, for an opening statement.
Good afternoon to everyone. Welcome to the subcommittee's
third hearing on the reauthorization of the Higher Education
Act.
In our first hearing, we discussed how the United States is
falling behind in producing college graduates. Our current
investments in higher education are not on the scale we need to
educate enough of our people to remain globally competitive.
In our second hearing, we discussed how well we are
preparing low-income and first-generation students for college.
Although we learned that we have some very effective programs
such as TRIO and GEAR UP, they only reach a small fraction of
the population that qualifies for the programs. Again, we are
falling short.
Today we will focus on the core mission of the Higher
Education Act, removing financial barriers to college.
Again, the evidence shows that our national investment is
insufficient and costs us tens of thousands of potential
college graduates every year. In this weekend's New York Times,
there was an article on the ABCs of calculating financial aid.
An entire industry has arisen around helping those who have
the means to do so negotiate their financial aid packages. What
happens to the students from low-and middle-income families? We
need to find out. And my hopes are that the panelists today
will help us answer that question.
What happens to minority students who are still under-
represented on our college campuses is another question. At our
flagship public institutions and our selective private
institutions, they just are not there.
A recent analysis by Post-Secondary Education Opportunity
found that while in the 2005-2006 academic year 36.9 percent of
resident under-graduate students were eligible for Pell grants,
only 15.9 percent of students in the top 50 public institutions
and only 9.7 percent of students at the top private
institutions were Pell grant recipients. We are asking low-
income and minority families to shoulder an increasingly
unbearable financial burden for college.
The Advisory Committee on Student Financial Assistance
reported that, between 2000 and the year 2004, the net price at
a 4-year public college rose from 75 percent to 87 percent of
family income for the lowest-income families. Students from
low-income families bear a work-loan burden of over $10,000 to
attend a public university.
Post-Secondary Opportunity analyzed college affordability
by race and income and found the following: The net price to
the family as a share of family income is the greatest for
blacks, Asians and Hispanics and the least for white and other
race students and their families.
Additionally, a report by Excelencia in Education found
that Latinos received the smallest financial aid packages
compared to all other groups.
It should come as no surprise that many families see these
barriers as insurmountable. The Advisory Committee estimates
that over the next decade we will lose between 1.4 million and
2.4 million college-qualified students who will fail to enroll
because of financial barriers.
This reauthorization of Higher Education Act is our
opportunity to remove these financial barriers. We started with
H.R. 5 to reduce the student loan interest rate. We provided
the first increase in 4 years to the maximum Pell grant. But we
must do more.
In closing, I want to say that I would like to thank the
witnesses for providing testimony today and for helping us
identify ways we can remove the financial barriers to college.
Thank you.
And I now yield to the ranking member, Ric Keller of
Florida, for his opening remarks.
[The prepared statement of Mr. Hinojosa follows:]
Prepared Statement of Hon. Ruben Hinojosa, Chairman, Subcommittee on
Higher Education, Lifelong Learning, and Competitiveness
Good Afternoon. Welcome to the subcommittee's third hearing on the
reauthorization of the Higher Education Act.
In our first hearing, we discussed how the United States is falling
behind in producing college graduates. Our current investments in
higher education are not on the scale we need to educate enough of our
people to remain globally competitive.
In our second hearing, we discussed how well we are preparing low-
income and first generation students for college. Although we learned
that we have some very effective programs such as TRIO and GEAR UP,
they only reach a small fraction of the population that qualifies for
the programs. Again, we are falling short.
Today, we will focus on the core mission of the Higher Education
Act--removing financial barriers to college. Again, the evidence shows
that our national investment is insufficient and costs us tens of
thousands of potential college graduates every year.
In this weekend's New York Times, there was an article on ``the A-
B-C's of Calculating Financial Aid.'' An entire industry has arisen
around helping those who have the means to do so negotiate their
financial aid packages.
What happens to the students from low-and middle-income families?
What happens to minority students who are still under-represented on
our college campuses?
At our flagship public institutions and our selective private
institutions, they just are not there. A recent analysis by
Postsecondary Education Opportunity found that while in the 2005-2005
academic year, 36.9 percent of resident undergraduate students were
eligible for Pell grants, only 15.9 percent of students in the top 50
public institutions and only 9.7 percent of students at the top private
institutions were Pell Grant recipients.
We are asking low-income and minority families to shoulder an
increasingly unbearable financial burden for college.
The advisory committee on student financial assistance reported
that between 2000 and 2004 the net price at a four-year public college
rose from 75 percent to 87 percent of family income for the lowest
income families. Students from low-income families bear a work-loan
burden of over $10,000 to attend a public university.
Post Secondary Opportunity analyzed college affordability by race
and income and found, ``The net price to the family as a share of
family income is the greatest for blacks, Asians and Hispanics and
least for white and other race students and their families.''
Additionally, a report by Excelencia in Education found that Latinos
received the smallest financial aid packages compared to all other
groups.
It should come as no surprise that many families see these barriers
as insurmountable. The advisory committee estimates that over the next
decade we will lose between 1.4 and 2.4 million college qualified
students who will fail to enroll because of financial barriers.
This reauthorization of the Higher Education Act is our opportunity
to remove these financial barriers.
We started with H.R. 5 to reduce the student loan interest rate. We
provided the first increase in 4 years to the maximum Pell Grant. But
we must do more.
I would like to thank the witnesses for providing testimony today
and for helping us identify ways we can remove the financial barriers
to college.
Thank you and I now yield to the Ranking Member Ric Keller of
Florida for his opening remarks.
______
Mr. Keller. Well, thank you very much, Mr. Chairman, for
yielding and for your comments as well.
I also want to thank Governor Castle for temporarily
sitting in for me. I was detained at another hearing. But just
sitting in the same chair, I feel almost like a governor. And I
am ready to start complaining about non-funded mandates and
everything else. [Laughter.]
But good morning, and thank you to all of you for joining
us today. We are here to learn about some of the challenges
facing parents and students in financing a college education.
A college degree is the passport out of poverty for
millions of American students each year. Without a college
education, many workers today are shut out of quality, high-
paying jobs. I believe our top priority should be opening the
doors of higher education to low-and middle-income Americans.
With this new Congress we have the opportunity to take a
step back and review the Higher Education Act reauthorization
policies that were developed over the past several years. At
the same time, there are certain goals that will continue to
persist. Those goals are acceptability and affordability.
We have already taken several positive steps in the right
direction. For example, we have increased Pell grant funding;
increased loan limits; rewarded high-achieving, low-income
students with Smart grants; and created incentives for low-
income students to pursue degrees in math, science and critical
foreign languages through Smart grants.
However, Mr. Chairman, we all know that no amount of aid
will truly benefit students unless institutions themselves are
also held responsible for their role in the college cost
crisis.
With this in mind, earlier this year our committee's
ranking Republican, Representative Buck McKeon, and I
introduced the College Affordability and Transparency Act to
provide parents and students better disclosure about the cost
of college.
I am hopeful that as we move forward in this
reauthorization process we keep this bill in mind and the fact
that funding alone is not a silver-bullet solution to all of
the crises. Rather, colleges and universities must play a key
role in lowering the barriers to a higher education.
We have a great panel of witnesses with us today to talk
about their perspective. I look forward to hearing from them.
And I thank you all for your presence today before our
committee.
Mr. Chairman, I will yield back the balance of my time.
[The prepared statement of Mr. Keller follows:]
Prepared Statement of Hon. Ric Keller, Senior Republican Member,
Subcommittee on Higher Education, Lifelong Learning and Competitiveness
Chairman Hinojosa, as this is our first subcommittee hearing in the
new Congress, let me congratulate you on your chairmanship. I look
forward to working closely with you over the next two years on the very
important issues this panel addresses, from college access to job
training and everything in between. I'd also like to welcome all of our
witnesses and thank all of you for taking the time to come and testify
before the Subcommittee today.
The issue of student access to college and ways in which students
are financing their college education are important ones to me. Pell
Grants and student loans helped me go to college.
We've seen substantial increases in federal financial aid since
2000. For example, Pell Grant funding is up 79%, from 7.6 billion in
2000 to 13.6 billion today. The maximum award since 2000 has increased
from $3,300 to $4,310 today. And these increases have made it possible
for an additional million and a half students to receive Pell Grants
since 2000.
On top of this dramatic influx in new aid, my colleagues on the
Education and Labor Committee have tried to move the national dialogue
about higher education beyond just federal spending, to get to the
heart of what I believe is the real problem: why costs are rising so
dramatically and what we can do to stabilize this trend. With that goal
in mind, we held over 30 hearings, considered several bills, and passed
a reauthorization of the Higher Education Act in the House in the form
of H.R. 609, the College Access and Opportunity Act.
That last point, I believe, is at the crux of this discussion. What
is causing the cost of higher education to skyrocket, and what can be
done to slow down or reverse this dangerous trend? According to the
most recent College Board report, over the last five years, there was a
35 percent inflation-adjusted increase in tuition and fees at four year
public colleges. This increase is higher than any other five year
increase since 1976-77. For private four year institutions, that number
was 11 percent.
Unfortunately, the skyrocketing cost of tuition minimizes the
positive impact of our increases to important financial aid programs,
such as Pell Grants. So, earlier this year, the full Committee's
Ranking Member, Congressman McKeon and I introduced H.R. 472, the
College Affordability and Transparency Act, which was adapted from the
affordability provisions in H.R. 609. Our bill aims to provide more
information to students not just about college tuition prices, but also
about net price, which we define as the amount the student must pay
after grant aid is subtracted from tuition. This is a measure and a
concept I am hopeful we will have the opportunity to discuss more as
the reauthorization process moves forward.
I will also be introducing the One Stop Student Financial Aid
Information Act of 2007 in the coming days, which will make it easier
for students and parents to learn more about their financial aid
options for college by providing all this information on one easy to
access website.
What I am most interested in learning here today is what the other
``partners'' in higher education are doing. I am interested in learning
more about how States are treating higher education and whether States
are doing their part to ensure that their citizens are able to achieve
the dream of a college education. I am also interested in hearing more
about what is being done in elementary schools and high schools to make
sure students are academically prepared to attend college. And finally,
I am interested to hear what institutions are doing to make sure that
their costs do not continue to spiral out of control.
Before I conclude, I'd like to thank our witnesses once again for
agreeing to testify before the Subcommittee today. I look forward to
the beneficial dialogue that I am sure will take place here today.
______
Chairman Hinojosa. Without objection, all members will have
14 days to submit additional materials or questions for the
hearing record.
I would like to introduce our very distinguished panel of
witnesses here with us this afternoon.
The first panelist will be Dallas Martin. Dallas is
president of the National Association of Student Financial Aid
Administrators. NASFAA, I believe, is the acronym. He has
represented the association before Congress, the executive
branch and the general public for many years. Prior to joining
this organization, Dr. Martin served as director of program
planning and administration for the Division of Student
Assistance with the American College Testing Program. He has
worked as an administrator of financial aid and student
personnel services. Dr. Martin received a Ph.D. in college
student personnel administration in 1971 from the University of
Northern Colorado.
The second panelist will be Claude Pressnell. Claude is a
member of and is representing the Advisory Committee on Student
Financial Assistance. Dr. Pressnell has served as president and
CEO of the Tennessee Independent Colleges and Universities
Association. He has extensive experience in higher education
and admissions and financial aid at various universities. Dr.
Pressnell has numerous publications in higher education, and he
received his Ph.D. from Vanderbilt University.
The third panelist is Luke Swarthout. Luke is testifying on
behalf of the U.S. Public Interest Research Group. He develops
policy, lobbies and writes on federal student aid issues. He
writes on student loan policy and federal higher education
policy. Luke has authored several reports on student debt and
federal aid, including the report entitled, ``Paying Back, Not
Giving Back: Student Debt's Negative Impact on Public Service
Career Opportunities.'' Mr. Swarthout received his Bachelor's
Degree from Amherst College.
The fourth panelist is James A. Boyle. He is the founding
president of the College Parents of America. The organization
was established in September 2003 to provide advocacy and
resources for current and future college parents. His
organization is a national membership association headquartered
in Virginia. Prior to his current role, he served as vice
president of brand marketing and corporate communication for
Sally Mae and has over 20 years experience in the media
industry. Mr. Boyle frequently testifies before Congress and
has discussed higher education issues on various television
programs. He received his Bachelor of Science in communications
from Northwestern University in 1979.
Having introduced them, I am now going to say welcome to
each and every one of our witnesses.
I would like to tell you just a little bit about our
lighting system. For those of you who have not testified before
this subcommittee, let me explain our lighting system and the
5-minute rule.
Everyone, including members of Congress, is limited to 5
minutes of presentation or questioning. The green light is
illuminated when you begin to speak. When you see the yellow
light, it means you have 1 minute remaining. When you see the
red light, it means your time has expired and you need to
conclude your testimony.
Please be certain, as you testify, to turn on and speak
into the microphone in front of you.
We will now hear from our first witness. Mr. Martin?
STATEMENT OF DALLAS MARTIN, PRESIDENT, NATIONAL ASSOCIATION OF
FINANCIAL AID ADMINISTRATORS
Mr. Martin. Thank you, Mr. Chairman.
Members of the subcommittee, thank you for inviting me to
be here with you today. The topic you have chosen to address
today is very important because it fundamentally affects the
future of our nation, not only in terms of our current and
future competitiveness in the industrialized world, but also
because it addresses the fiscal and economic health of our
nation's citizens.
While the United States continues to enjoy a period of
economic prosperity that has benefited many, it has not been a
period that has been helpful to those who are or remain at the
lower end of our economic scale. It is well-documented that
educational opportunity is not equal among all of our citizens,
whether at the elementary, secondary or post-secondary level.
As stated by the congressionally appointed Advisory
Committee on Student Financial Assistance, low-income students
who graduate from high school academically prepared to enter
college still confront significant financial barriers. And they
are also less knowledgeable about the financial resources that
are available to them.
Clearly, the cost of higher education has risen steadily as
a percentage of family income. And as a result, more low-income
students must abandon their plans to attend college on a full-
time basis. Instead, many of these students are working long
hours, attending college part-time and borrowing more heavily.
In fact, these students as well as many others who have to
use credit financing through student loans to help pay for
college, are finding that the current federal limits on annual
and cumulatively borrowing amounts are unrealistic in terms of
their needs. As a result, students and their families are
forced to turn to more costly private or alternative loan
options that are not as favorable and which are not regulated
by our federal Title IV statutes.
While the financial aid system in the United States is the
most comprehensive in the world and assists some 13 million
students annually, it is still incredibly complicated and
confusing to many students and their families. Therefore, they
turn to the people who have the primary responsibility for
bringing it all together and who have the expertise necessary
to guide them through the process: the financial aid
administrators.
Nowhere else can a student and his or her family get the
complete information they need about state, federal and
institutional aid programs and the procedures and timelines
necessary to navigate the process efficiently and effectively.
Since the passage of the Higher Education Act of 1965, the
aid programs have grown dramatically, and that growth has
brought equal expansion in the role and responsibilities of
financial aid administrators.
Financial aid administrators, unlike many other
institutional administrators, don't graduate with a degree in
financial aid administration. Such degrees do not exist.
Instead, they learn from colleagues that are trained by the
national, regional or state financial aid administrators, the
education department, and in some cases, by state guaranty
agencies and lenders.
They are responsible for understanding and managing almost
countless requirements, including all of the Title IV statutes,
a federal student aid handbook of seven volumes of 763 pages,
state rules and regulations that they also have to go through,
donor scholarship requirements and lender and guaranty agency
loan requirements.
Further, these individuals have to understand all the
details with the Family Education Rights and Privacy Act
requirements, citizenship and immigration rules related to
eligibility, selective service requirements, IRS requirements,
state residency requirements, and numerous others that impact
the student aid programs.
These individuals juggle all these responsibilities in a
constantly changing world of program requirements. Still, in
spite of all of these challenges, I can assure you that the
vast majority of financial aid administrators are dedicated,
extremely hard-working individuals who do everything they can
to provide accurate, timely information and help to families
and students who without financial aid would be unable to
achieve a post-secondary education.
In closing, Mr. Chairman, I look forward to working with
you and your colleagues as you develop legislation to
reauthorize the Higher Education Act.
The current controversy about preferred lender lists and
institutional relationships with loan providers shows a need
for some additional legislative clarity on what is and what is
not permissible. But we must be careful not to impose
unnecessary restrictions that make it impossible for
responsible cooperation to occur amongst these parties.
In addition, let me note that until earlier this year the
Pell Grant maximum award had been frozen for 4 years, and we
still need to further increase it in order for the program to
achieve its intended goal. Likewise, we need to increase the
annual and cumulative limits on Stafford loans. And let me also
say that the LEAP and campus-based programs serve important
financial needs to students, and yet they, too, are woefully
under-funded.
While all of these Title IV programs are complementary to
each other, there are improvements that we can make to make
them better. I pledge NASFAA's support and the support of my
members to assist you, Mr. Chairman, and to assist your
colleagues as you begin your critically important legislative
work reauthorizing the Higher Education Act.
My members know all too well how far away we are from
achieving the goal of equal opportunity for low-and middle-
income families and students. Our focus first and foremost and
must always be on meeting the financial needs of our students
and families.
Thank you.
[The statement and attachments of Mr. Martin follow:]
Prepared Statement of Dr. A. Dallas Martin, Jr., President, National
Association of Financial Aid Administrators (NASFAA)
Mr. Chairman and members of the Subcommittee, I thank you for the
opportunity to testify today. I am Dallas Martin, President of the
National Association of Student Financial Aid Administrators (NASFAA).
Formed over forty years ago, NASFAA represents student financial aid
administrators at some 3,000 postsecondary institutions across the
nation.
Our association illustrates the diversity of our higher education
enterprise with members from private and public institutions, community
colleges, four-year schools, proprietary schools, and graduate/
professional institutions. At these schools, NASFAA represents
approximately 12,000 financial aid professionals who are dedicated to
helping families apply for and receive the funds they need to send
their students to college. Given the complexity of the state, federal,
and institutional aid programs, it is necessary to have someone with
that kind of expertise guiding families through the process.
The topic you have chosen to address today is very important
because it fundamentally affects the future of our nation, not only in
terms of our current and future competitiveness in the industrialized
world, but also because it addresses the fiscal and economic health of
our nation's citizens. While the United States continues to enjoy a
period of economic prosperity that has benefited many, it has not been
a period that has been helpful to those who are and remain at the lower
end of our economic scale. It is well-documented that educational
opportunity is not equal among all of our citizens, whether at the
elementary, secondary, or postsecondary levels.
As stated by the Congressionally-appointed Advisory Committee on
Student Financial Assistance, low income students who graduate from
high school academically prepared to enter college still confront
significant financial barriers and are less knowledgeable about the
financial resources that are available to them. Clearly the cost of
higher education has risen steadily as a percentage of family income.
As a result, more low income students must abandon plans to attend
college on a full-time basis. Instead, many of these students are
working long hours, attending college part-time, and borrowing more
heavily. In fact, these students, as well as many others, who have to
use credit financing through student loans to help pay for college are
finding that the current federal limits on annual and cumulative
borrowing amounts are unrealistic in terms of their needs. As a result,
students and their families are forced to turn to more costly private
or alternative loan options that are not as favorable and which are not
regulated by our federal Title IV loan statutes.
While the financial aid system in the United States is the most
comprehensive in the world and assists some 13 million students
annually, it still is incredibly complicated and confusing to many
students and their families. Therefore, they turn to the people who
have the primary responsibility for bringing it all together and who
have the expertise necessary to guide them through the process--the
financial aid administrators. Nowhere else can a student and his or her
family get the complete information they need about state, federal, and
institutional aid programs and the procedures and timelines necessary
to navigate the process efficiently and effectively. Since the passage
of the Higher Education Act of 1965, the aid programs have grown
dramatically, and that growth has brought equal expansion in the role
and responsibilities of financial aid administrators. Although
complicated by many other outside influences that I will discuss later,
the financial aid administrator assists students and their families in
a variety of ways.
Even before a student applies for student aid, a financial aid
administrator can help the student and parents to * * *
Understand the aid process by sponsoring financial aid
early awareness activities for students and families in elementary,
middle-school, and high school so that they can not only plan for
postsecondary expenses, but, more importantly, know that college is
possible and that academic preparation is important
Estimate the costs of education, including direct costs
(tuition, fees, on-campus housing, etc.) and indirect costs
(transportation, other living expenses, books and supplies, etc.)
Know the deadlines for applying for various types of
student aid
Estimate student aid eligibility
Gain a thorough understanding of the types of aid that are
available and the requirements to qualify
Complete the Free Application for Federal Student Aid
(FAFSA), which is the basic building block for determining the student
aid package
Know how to complete the FAFSA when circumstances aren't
typical (a parent has lost a job, the student's parents live overseas,
the student was raised in foster care, etc.)
Understand when to submit an appeal to reflect unusual
circumstances that cannot be reflected in the FAFSA
Determine which additional applications are needed so that
the student can receive funds from all of the sources for which he or
she qualifies
Remain aware of follow-up steps in the application process
Identify free scholarship search engines and resources
Notify individuals and families about the tax benefits
they may be eligible for such as the Hope and Lifetime tax credits, the
deduction for educational expenses, or the deduction for student loan
interest
Once the student applies for aid by submitting the FAFSA and any
other additional aid applications, the financial aid office will notify
the student of the amount he or she can expect to receive, and from
what sources. Aid administrators can then help the student and their
parents to * * *
Identify alternative sources of funds if additional money
is needed to meet educational costs
Understand student loan terminology and identify the types
and sources of loans that are right for the borrower
Know when and how the student's funds can be applied to
direct costs as well as reimbursed for indirect costs
Understand the student's rights and responsibilities as a
student loan borrower
As a student continues in school, aid administrators can help them
* * *
Stay on track to continue to qualify for funds by
progressing in their academic programs and reapplying for aid on-time
each year
Keep an eye on their loan debt and explain what the future
repayments might be like
Handle questions about whether to defer interest payments
on unsubsidized loans while in school or pay the interest as it comes
due
Identify and find a Federal Work-Study job including FWS
community service positions
Provide refunds and assistance when a student needs to
temporarily cease studies (such as to assist with a illness in their
family) but plans to resume attendance later
Find ways to budget so that the student doesn't have to
borrow excessively and leave school with an excessive debt burden
Financial aid administrators even assist former students if they
have financial difficulties--to help them avoid defaulting on a student
loan--by providing information about deferments, forbearance, or loan
consolidation options.
On a larger scale, aid administrators help reach out to students,
often regardless of the institution they plan to attend. Beyond helping
students and parents individually, they also * * *
Participate in outreach programs, such as College Goal
Sunday, which is a national program offered by many states to help low-
income and disadvantaged families find the means to attain a college
education
Offer ``Financial Aid Night'' or early awareness
presentations to help students and parents learn how to apply for
financial aid and understand the differences between the various
sources of aid
Advocate before policy makers at both the national and
state level to ensure that financial aid funding remains available,
affordable, and accessible to families
Provide advice on current and proposed legislation
affecting student aid programs to ensure they are achieving their
intended purposes
Seek additional ways to assist their students, whether by
investigating new scholarship and loan programs, exploring ways to cut
student costs, or expanding informational sources and implementing new
technology to better meet students' needs.
Take part in training activities sponsored by their state,
regional, or national financial aid associations in order to update
their skills and gain new information about changes in the federal
student aid process and best practices so they may better serve
students and families
Comment on proposed federal and state regulations to
ensure that the student aid process remains equitable and is not
burdensome for families
Respond to media requests for practical information to
help families
Develop detailed informational materials for students and
parents, including financial literacy materials
Participate in long-range planning for the institution
Submit reports to federal and state agencies as well as
institutional reports
Research and participate in technology upgrades to improve
the total student aid process on campus
Financial aid administrators, unlike many other institutional
administrators, don't graduate with a degree in financial aid
administration--such degrees just don't exist. Instead, they learn from
colleagues, they are trained by the national, regional, and state
financial aid associations, the Education Department, and in some cases
by state guaranty agencies and lenders. They are responsible for
understanding and managing almost countless requirements, including the
Title IV statute, some 449 sections of exceptionally detailed federal
regulations, a Federal Student Aid Handbook of seven volumes and 763
pages, state rules and regulations, donor scholarship requirements, and
lender and guaranty agency loan requirements. Further, financial aid
administrators must understand Family Education Rights and Privacy Act
(FERPA) requirements, citizenship and immigration rules related to
eligibility, Selective Service requirements, IRS requirements, state
residency requirements, and numerous others that impact the student aid
programs.
Financial aid offices lead the way on many college campuses in the
areas of automation and application of new technology. Document imaging
and workflow systems are now key tools for many aid offices, yet they
were virtually unheard of until the last decade. One of the more recent
innovations to aid in processing efficiency is the Digital Dashboard
technology that provides metrics and key performance indicators for the
financial aid office. These allow staff to compare year-to-year data on
applications received and processed, percentage of files selected for
verification and completed, status of award packaging and loan
processing, and how offers and disbursements compare to funds available
for each program. A suggested metrics and key performance indicator
list is shown as Attachment A to illustrate some of the data tracking
and reporting that aid administrators must perform.
As society has grown to expect more real-time communications, the
financial aid office has also had to adjust to synchronous
communication, which includes any form of technology-supported tool
that permits students to communicate with others at the same time.
Financial aid offices must constantly adjust their practices to reach
students in the way that they respond to best. Gone are the days of
``snail mail''; today it is ``real-time'' communication or you are
considered to be in the dark ages. To further help you understand the
scope of the financial aid office activities Attachment B provides a
calendar year and on-going monthly timeline of a typical financial aid
administrator's responsibilities.
Financial aid administrators juggle all of these responsibilities
in a constantly changing world of program requirements. Changes to the
financial aid programs do not occur only during reauthorization of the
programs. Instead, nearly every year, changes are made to one or more
of the student aid programs. Sometimes these changes are made during
budget reconciliation, or on an annual appropriations bill. In
addition, changes to tax legislation may affect interest on loans, the
receipt of scholarships, or direct tax benefit programs offered by the
federal government.
At times, current events may cause the Congress to legislate new
requirements to remedy what is a real or perceived problem or need.
Sometimes these requirements can be extremely burdensome because of the
time, effort, and expense involved in creating systems and processes to
address the issues, they may have virtually no impact on the amount of
dollars spent in the programs. A prime example of one of these issues
is verification of selective service registration. When imposed two
decades ago, less than two percent of financial aid applicants were
even identified as potentially not being registered, yet the
requirement was imposed on everyone at great expense and is still in
the law today. This is not to say that I do not believe in a student's
civic obligation to register with Selective Service, but the solution
imposed to resolve a very small problem added unnecessary complexity to
already complicated delivery system.
Another example to illustrate how excessive burdens are imposed on
the financial aid office involves the recently enacted ACG/SMART grant
programs. The Education Department's interpretation of the law for
these programs has caused major problems for the financial community.
On April 18, the negotiated rulemaking committee could not reach
consensus due to the unworkability of the academic year progression
aspect of Department's interpretation. Further, the inclusion of the
merit component in the law has essentially invited the Department to
step into academic purview. The Department is now regulating grade
point average calculations, the ability to consider a grade equivalency
to advanced placement exam scores, and whether transfer credits are
part of a student's overall postsecondary background in terms of
academic year progression. The definition of eligible program is
problematic under the proposed regulations and the ineligibility of
certificate programs for these grant programs was another sticking
point preventing consensus. These are just some of the questions that
still exist in these recently enacted programs that aid administrators
have already had to begin to administer. Unfortunately, because
reasonable resolution has not been reached on these issues, confusion
and administrative complexity have been added that impact the program's
effectiveness.
Still, in spite of all of these challenges, I can assure you that
the vast majority of financial aid administrators are dedicated,
extremely hard-working individuals who do everything they can to
provide accurate timely information and help to families and students
who without financial aid would be unable to achieve a postsecondary
education. The vast majority are ethical and strive to meet their
responsibilities in a professional and caring manner. They work long
hours for some of the lowest administrative salaries on campus, and in
many cases they are not recognized by other administrators for the
contributions they make to the institution and the students they serve.
Many financial aid offices are also expected to fulfill all of
these responsibilities with limited financial and human resources.
While the Department of Education requires all schools that participate
in the Title IV federal student aid programs to demonstrate
administrative capability and ensure compliance with all regulations,
to my knowledge, never has a school been cited during a program review
for not providing the personnel and fiscal resources necessary to carry
out their required responsibilities. This failure on behalf of the
Department, and some schools that do not provide adequate resources,
has forced many financial aid offices to seek assistance from lenders,
guaranty agencies, and others to print student financial aid consumer
information, to perform student loan exit and entrance counseling, to
establish call centers, and to provide additional staffing during peak
periods in the financial aid office. While all of these are functions
that the school itself should ideally perform, without adequate
resources to conduct all of its administrative capability requirements,
it is not surprising that some financial aid offices would accept
assistance from these entities to perform those tasks. While I might
question whether or not this was the best course of action for a school
to take, I cannot fault the financial aid office for using these types
of resources to comply with their regulatory responsibilities and offer
service to their students.
In closing, Mr. Chairman and members of the Subcommittee, I look
forward to working with you and your colleagues as you develop
legislation to reauthorize the Higher Education Act. The current
controversy about preferred lender lists and institutional
relationships with loan providers shows a need for some additional
legislative clarity on what is or is not permissible. We must be
careful not to impose unnecessary restrictions that make it impossible
for responsible collaboration to occur among these parties. It should
not obscure the good work you can accomplish to ensure that our
students and their families have the financial assistance they need so
that they may take advantage of all the opportunities a postsecondary
education can provide for them.
Let me note that until earlier this year the Pell Grant maximum
award had been frozen for four years and we still need further
increases in order for the program to achieve its intended goal.
Likewise, Stafford Loan annual and cumulative limits are nowhere near
what they need to be to permit undergraduate and graduate students to
borrow from federal loan sources and to avoid borrowing higher cost
private educational loans. Similarly, the LEAP and campus-based
programs serve important financial needs of students and yet are
woefully under-funded. While all of these Title IV programs are
complimentary to each other, there are improvements that can be made to
make them better. And, when we consider reauthorizing the federal
student aid programs, let us recognize that far too many of our
citizens have been left behind. There is so much work that needs to be
accomplished so that all Americans have the student aid they deserve so
that they can stake a claim on the American dream.
I pledge NASFAA's support and the support of my members to assist
you, Mr. Chairman, and to assist your colleagues as you begin your
critically important legislative work reauthorizing the Higher
Education Act. My members know all too well how far away we are from
achieving the goal of equal opportunity for low- and middle-income
families and students. Our focus, first and foremost, must be on
meeting the financial needs of our students and families.
______
Attachment A: Suggested Metrics and Key Performance Indicators (KPIS)
processing
FASFAAs received
Students evaluated
Students packaged
Students selected for verification
Students verified
Loan requests received
Loan requests processed
Summer applications received
Summer applications processed
Documents received
Communications sent (e-mail, paper)
Calls received/average wait time
Counter visits/average wait time
Walk-in appointments/average wait time
Scheduled appointments/average wait time
funds management current year (offered/budgeted/disbursed)
Federal Pell Grant
FSEOG
State Grant
Institutional grant
Federal Stafford/Direct Loan
Federal Perkins Loan
Institutional Loan
Federal PLUS Loan
Other loans
Federal Work-Study
Major state and institutional scholarship programs
prior year comparisons (historical)
Federal
State
Institutional
Endowed
Other
Percent of all funds that are need-based
Percent of all institutional funds that are need-based
Disbursements by month
outcomes (last two years)
Enrollment
Undergraduate enrollment
Percentage receiving aid
Percentage receiving Federal Pell Grants
Percentage receiving state merit awards
Graduate enrollment
Percentage receiving aid
Percentage receiving assistantships
New freshmen
Percentage receiving need-based aid
Average need-based award
Average merit-based award
Aid applicant yield vs. yield on non-applicants
Institutional discount rate
default management
Federal Stafford/Direct Loan default rate
Federal Perkins Loan default rate
Average indebtedness
Number of federal audit findings and dollar amount
Number of state audit findings and dollar amount
administration
Applicants per staff member
Students per staff member
Cost per recipient
Cost as a percentage of dollars administered
Staff turnover
Counselor turnover
customer service
Overall rating
Rating compared to other administrative offices
______
Attachment B: Calendar Year and Ongoing Timeline for Director
Many items listed here will differ when they are done based on
individual institution timelines
ongoing year-round responsibilities
Cancellations and withdrawals and refund calculations
(R2T4)
Provide leadership in the administering and oversight of
financial aid programs
Ensure services delivered in affective and timely manner
Support and enhance mission and purpose of institution
Supervise and manage Financial Aid Office staff
Council and assist students and families on financial aid
matter and processes
Monitoring compliance with all aspects of federal, state
and institutional guidelines/regulations
Reviews and communications federal and state legislative
issues and regulation changes to appropriate colleagues, supervisors,
Deans, and Directors
Act as main point of contact for Deans and Directors of
other departments on fin aid matters
Tracking and management of all financial aid funds and
award budgets
Management of financial aid office budget
Monthly reports such as Pell reporting and Direct Loan
origination
Arrange and coordinate training of financial aid office
staff and possibly other dept staff (such as Admissions and Business
Office staff)
Respond to various surveys, such as US News, Petersons,
PACCON, and NACUBO as needed
Update the Program Participation Agreement (PPA) as needed
Review and update as changes occur to the financial aid
Policies and Procedures manual
SSCR Reports due
Provide financial aid presentations at Admissions
orientation and visitation days
Prepare narrative and technical reports for a variety of
offices and uses (i.e. Board of Regents)
Actively involved in State, Regional, and National
Financial Aid Associations
Various times of year run Satisfactory Academic Progress
(SAP) reports (i.e. at end of each term)
Reading/Reviewing/Awarding of Files
Verification of files
Review of additional information received and professional
judgment requests
Meetings
Update Calendar and forms on Web site
NCAA Committee work
Legislative work/State Advisory board work including
testimony, meetings, and preparation of statistics
annual responsibilities
Annual Audit within 6 months of end of fiscal year
Submit A-133 within 9 months of end of school's fiscal
year
File FISAP report
Campus Safety report
Drug & Alcohol Prevention Information distributed
FERPA information distributed
Publish and make available general school and financial
aid information
90/10 report (for proprietary schools only)
Conferences and workshops put on by ED, State, Regional,
National Associations and Vendors for training and networking
every 5 years
Renewal of Program Participation Agreement (PPA)
Master Plan review or Self-Study for re-accreditation
january
This is an ideal timeline, not necessarily reality. Some items may
slide into another month based on work load and individual office
timelines. These are things to be thinking about and working on. Every
office is different.
Finalize awarding policies for the next academic year
Finalize budgets (i.e. tuition & fees, room & board, etc)
Train office staff on following year's awarding policies
and file review procedures. Do this every year to ensure staff updated
and trained. Things change year to year
Financial aid processing begins for following academic
year
Communicate to students the timelines and deadlines for
applying for aid for next academic year
Process withdrawals and cancellations including refund of
aid (R2T4)
Processing of financial aid applications for winter or
spring term starters
Review & evaluate special circumstances and PJ cases for
winter or spring term starters
february
This is an ideal timeline, not necessarily reality. Some items may
slide into another month based on work load and individual office
timelines. These are things to be thinking about and working on. Every
office is different.
Receive and calculate tentative campus-based allocations
by ED
Use tentative allocations to set up budget for awarding
campus-based funds
Draft Cohort Default Rate sent to schools
Submit correction of data, submit IDC and/or PRI challenge
Submit appeal of campus-based program allocations due
February 15th
Communicate reminder to students about deadlines to apply
for next academic year
Work on processing files for next academic year
march
This is an ideal timeline, not necessarily reality. Some items may
slide into another month based on work load and individual office
timelines. These are things to be thinking about and working on. Every
office is different.
Final award notification for campus-based programs sent by
ED for next academic year
Finalize budgets for campus-based funds to be awarded for
next academic year
Communicate final budgets for campus-based funds to
appropriate offices (Controller, Student Loan office if Perkins)
Pell Grant Administrative Cost Allowance available
Schedule annual audit for current academic year (typically
over the summer at end of fiscal year)
Work on processing files for next academic year
For quarter schools work on processing applications for
spring term starters
Process withdrawals and cancellations including refund of
aid (R2T4)
Process Satisfactory Academic Progress report (for end of
winter term)
april
This is an ideal timeline, not necessarily reality. Some items may
slide into another month based on work load and individual office
timelines. These are things to be thinking about and working on. Every
office is different.
Processing of financial aid applications
Prepare for staff annual reviews
Prepare for annual audit
may
This is an ideal timeline, not necessarily reality. Some items may
slide into another month based on work load and individual office
timelines. These are things to be thinking about and working on. Every
office is different.
IPEDS report due
For private schools admissions deposits due for new
students by May 1st
Do annual staff reviews
Prepare for annual audit
Run SAP for semester schools for end of spring semester
Continue processing of aid applications
For some schools start of summer semester
For some schools finalize office budget information for
close of fiscal year
For some schools finalize awarding aid information for
close of fiscal year (depends on if summer is a header or trailer)
Processing of aid applications
june
This is an ideal timeline, not necessarily reality. Some items may
slide into another month based on work load and individual office
timelines. These are things to be thinking about and working on. Every
office is different.
For semester and quarter schools run SAP report for either
end of year or spring semester/quarter
For some schools annual audit
Closing date to request waiver of community service
expenditure requirement
End of federal fiscal year and end of award year
Return excess Perkins cash on hand to ED
Inventory and clearing out of files from office to storage
Processing of aid applications
july
This is an ideal timeline, not necessarily reality. Some items may
slide into another month based on work load and individual office
timelines. These are things to be thinking about and working on. Every
office is different.
Finalize campus-based funds in preparation of fall FISAP
report
New federal award year begins
Draw downs for new year can begin
Report completion, graduation, and transfer out rates for
general student body and athletes via IPEDS
Direct loan reconciliation close-out
Processing of aid applications
For some schools annual audit
august
This is an ideal timeline, not necessarily reality. Some items may
slide into another month based on work load and individual office
timelines. These are things to be thinking about and working on. Every
office is different.
Dept of ED sends notification of additional available
campus-based funds
FISAP distributed to schools
Campus-based reconciliation form due by ED
Federal Perkins Safeguard Activity report due for prior
year
For some schools start of fall semester
Process withdrawals and cancellations, including refunds
of aid (R2T4)
Review awarding policies and prepare preliminary awarding
policies for next academic year (so Admissions recruiting staff have
information for initial recruiting visits starting in September)
september
This is an ideal timeline, not necessarily reality. Some items may
slide into another month based on work load and individual office
timelines. These are things to be thinking about and working on. Every
office is different.
For some schools start of fall semester/quarter
Process withdrawals and cancellations, including refunds
of aid (R2T4)
Freeze statistical data for semester schools
Work on statistical data for reports based on frozen data
ED distributes supplemental applications for campus-based
programs to schools
Official Cohort Default Rates sent to schools
Review data and initiate appropriate action and/or appeal
to change Cohort Default Rate data and/or sanctions status
Last date to send origination/disbursement records to COD
for previous academic year
Work on FISAP report (due October 1st at midnight)
october
This is an ideal timeline, not necessarily reality. Some items may
slide into another month based on work load and individual office
timelines. These are things to be thinking about and working on. Every
office is different.
October 1st at midnight FISAP due
Campus Security Report due to ED and students/employees
Compile athletic program participation rates and financial
support data (EADA report) and submit to ED
Review previous year's awarding policies and application
procedures
Prepare application policies for the next award year so
can prepare revisions to online applications and physical paper
applications if necessary, so ready for application cycle in December
and January
Review informational publications
Review of loan application and processing procedures so
can update procedures for next academic year (including preferred
lender list if applicable)
Order FAFSA on the web brochures and pre-application
worksheets if applicable
Federal satellite video conference
Surveys (Peterson's, Nacubo, etc)
november
This is an ideal timeline, not necessarily reality. Some items may
slide into another month based on work load and individual office
timelines. These are things to be thinking about and working on. Every
office is different.
ED sends FISAP edits to institutions
Regulations published by November 1st
Finalize application and awarding policies for next
academic year
High School financial aid night presentations
Communicate to students information about deadlines to
apply for financial aid for next academic year and scholarship search
tips (and scam information)
Surveys (US News)
Submit updated Perkins cash-on-hand on FISAP
december
This is an ideal timeline, not necessarily reality. Some items may
slide into another month based on work load and individual office
timelines. These are things to be thinking about and working on. Every
office is different.
ED sends appeal procedures for campus-based awards to
schools
ED notifies institutions of needed hardware and software
changes
Institutions return any needed FISAP edits to ED
High School financial aid night presentations
Run SAP report for fall term
______
Chairman Hinojosa. We welcome the National Association of
Student Financial Aid Administrators' offer to help us.
Next I call on Dr. Claude Pressnell.
STATEMENT OF CLAUDE PRESSNELL, VICE CHAIRPERSON, ADVISORY
COMMITTEE ON STUDENT FINANCIAL AID
Mr. Pressnell. Chairman Hinojosa and members of the
subcommittee, on behalf of the Advisory Committee on Student
Financial Assistance, I want to thank you for the opportunity
to provide testimony on the barriers to college access and
persistence for low-and moderate-income families.
I am testifying today in my capacity as the vice chair of
the Advisory Committee. In fulfilling our legislative charge,
the Advisory Committee analyzes federal policy from the unique
perspective of the student.
Several Advisory Committee reports have found that barriers
to college facing our nation's low-and moderate-income families
can be grouped into four categories: first, financial barriers;
second, inadequate academic preparation; third, poor and
untimely information; fourth, the complexity of the application
forms and process.
First, let me begin with financial barriers. To view
financial barriers through the eyes of a student, the Advisory
Committee looks at the student work-loan burden to define what
a true college cost is facing the families. The work-loan
burden is also called net price or net cost, and it represents
the total cost of attendance after subtracting grant aid from
all sources.
Between 1990 and 2004, the work-loan burden increased for
all students, but especially those from the lowest-income
families. This gap between grants and cost of attendance equals
over 75 percent of the family income for the lowest-income
families.
Because of these financial barriers in the previous and
current decades, millions of our nation's best and brightest
students were and will be forced to alter their college
enrollment and degree plans because of the lack of finances.
Second, academic preparation is inarguably a key factor in
the college access and persistence. Recent data show that
between 1992 and 2004 there were increases in academic
preparation as measured by courses taken. This is particularly
true for low-income students. In spite of this, however, there
have not been significant increases in college enrollment or
degree attainment. These stagnant enrollment and attainment
levels are directly tied to the increasing financial barriers.
Third, information barriers also exist. The timing and
quality of financial aid information is critical to college
decision-making. The Advisory Committee has offered several
recommendations for improving the quality and delivery of early
financial aid information in our report entitled, ``The Student
Aid Gauntlet.'' We continue to explore strategies for
eliminating information barriers in our current Innovative
Pathway study.
However, we have found that in the face of the high work-
loan burden, early information is not enough. Once low-and
moderate-income students are informed about their total
financial aid package, they oftentimes discover that a
shortfall in grant aid makes college expenses unmanageable.
Fourth and finally, the complexity of the student aid
process poses an unnecessary barrier for students. In 2004,
members of this chamber tasked the Advisory Committee to
identify those barriers and to make recommendations on ways to
reduce them. Current proposed legislation in the House and
Senate to amend the Higher Education Act addresses many of the
Advisory Committee's key recommendations. However, these
simplification improvements alone will not dramatically
increase access if the work-loan burden levels remain high.
In sum, these four barriers--financial barriers, inadequate
academic preparation, poor and untimely information, and
complexity of the application form and processes--can
negatively impact access and persistence.
Over the decade, financial barriers have grown and
compounded the barriers to students by weakening incentives to
prepare academically, compromising the effectiveness of early
information efforts, and undermining efforts to simplify the
student financial aid application process.
In light of the pending HEA reauthorization, the Advisory
Committee would like to offer a pragmatic, feasible policy
recommendation that addresses each of these barriers
simultaneously.
Increase need-based financial aid is one solution that can
stimulate increases in Bachelor Degree attainment among
college-qualified high school graduates and increase the number
of college-qualified students and forthcoming cohorts.
Because ensuring access to college degree and attainment is
not solely the responsibility of the federal government, the
Advisory Committee recommends creating a national public-
private-federal-state partnership to coordinate and increase
need-based aid from all sources.
In such a partnership, federal matching grants would be
provided to states as an incentive to coordinate with
institutions and private organizations to guarantee Pell-
eligible students financial access to a 4-year college or
university. With such assurance, students and family would know
that adequate financial aid resources are there, and they would
work hard to be academically prepared.
One model of this partnership is currently included in the
pending bipartisan Senate HEA legislation and is designated as
grants for access and persistence in the ACCESS Act. This is
sponsored by Senator Jack Reed----
Chairman Hinojosa. Excuse me, Dr. Pressnell. I am going to
interrupt you and say I am going to give you an additional 2
minutes so that you can try to finish the Advisory Committee's
six recommendations because that is very important.
Mr. Pressnell. Well, thank you very much.
With the grants for access and persistence in the ACCESS
Act is sponsored by Senator Jack Reed. It is bipartisan
support. It is co-sponsored by Senator Collins, Dodd, Kennedy,
Murray, and Sanders. And we believe that this is a good first
step toward leveraging scarce funding to lower the financial
aid barriers for low-to moderate-income college-qualified
students.
In essence, what this partnership would do through,
actually, in the Senate bill, would be to take the special LEAP
money and provide that as an incentive grant pool that would
pull together institutional need-based aid, as well as
philanthropic support and possibly even corporate philanthropic
support, to leverage then the scarce resources at the state
level as well as at the federal level, to pull together to
target that at Pell-eligible students that are college-
qualified to attend a 4-year university.
So what we are trying to do through this proposal is to try
to bring all the partners to the table to bring forth an
aggressive, creative solution to our current crisis in terms of
need-based aid for low-and moderate-income families.
And so, on behalf of the Advisory Committee members, I
thank you for the opportunity to come before you today. And we
look forward to working with you to provide technical
assistance on this matter and others as time moves forward.
Thank you.
[The statement and attachment of Mr. Pressnell follow:]
------
Advisory Committee on Student Financial Assistance
Reauthorization Proposal: A Federal Partnership for Access and
Persistence
Summary: The proposal would forge a new partnership among the
federal government, states, and colleges to create an assurance of
access and persistence for low-income students. The proposal is
necessary because college-qualified, low-income students face financial
and procedural barriers to enrollment throughout the education
pipeline. The proposal would attack this systemic problem by
encouraging states to offer low-income students an early assurance of
financial access to college, a simplified financial application
process, and adequate grant aid to enroll and persist to degree
completion. The proposal would also encourage colleges to provide
support services and additional persistence grants to low-income
students. The most effective early intervention programs have
demonstrated that an early assurance of financial access has generated
remarkable benefits for low-income students and their families:
students who successfully complete early intervention programs are more
likely to be academically prepared to attend college and more likely to
enroll in college.
Background: The Advisory Committee on Student Financial Assistance
has outlined the access and persistence problems in its last two
reports, Access Denied and Empty Promises. In summary, the Advisory
Committee has found: (1) middle school students lack an assurance of
adequate financial aid; (2) high school students face an overly complex
financial aid application process and inordinately high unmet need; and
(3) college students face an overwhelming level of work and loan burden
in attempting to persist to degree completion. The Advisory Committee
is convinced that progress is unlikely unless the Title IV access and
persistence partnership among the federal government, states, colleges,
and K-12 schools is boldly reinvigorated during this reauthorization.
An effective access and persistence strategy must be
multidimensional; it should contain three critical components: (1) An
early assurance of financial access; (2) a simplified application and
adequate grant aid; and (3) persistence grants and support services. An
assurance of financial access to low-income middle school students
would create incentives for students to aspire to attend college,
enroll in early intervention programs, and prepare academically to
attend college. A simplified application form that is aligned with
existing federal programs would make eligibility more transparent and
application less encumbered for high school students. Additional grant
aid and support services at college would reduce low-income students'
work and loan burden and improve the likelihood that they will enroll
in college and persist to degree completion.
Proposal: Congress should create a partnership that offers matching
grants to states and institutions to form partnerships that promote
access and persistence for low-income students. Congress could
appropriate funds to states, especially those states that have a
demonstrated commitment to early intervention leading to college
access. States could have the flexibility to decide which low-income
students to target the additional grant aid to, but could be encouraged
to give priority to low-income students who have participated in a
federal, state, community, or private early intervention program. The
partnership could encourage states to provide low-income middle school
students with an early assurance of financial access to a four-year
college; it could establish a streamlined application process that
included automatic eligibility, enabling states to notify every 7th
grade student of his or her total drawing power on federal and state
grant aid. The partnership would allow states to offer financial
incentives, in the form of additional grant assistance, to high school
students to participate in and complete early intervention programs.
Participation in such programs will increase the likelihood that the
targeted students will aspire to college and be academically prepared
to enroll in college. The partnership could also encourage
participating colleges to attract, retain, and graduate low-income
students; institutions would receive matching funds to provide
persistence grants and additional support services. Finally, the
partnership could further reduce the work and loan burden of low-income
college students by eliminating the student ``work penalty,'' whereby a
student's grants decrease the more (s)he works to cover unmet need, and
thus ensuring adequate grant aid each year of college.
Key Features:
The partnership could leverage additional federal funds
with additional state and institutional grant aid through matching
requirements.
It minimizes structural changes to existing federal
programs and does not create new federal programs to compete with those
that already exist.
It could leverage existing Title IV programs like SEOG and
Work-Study to lower unmet need and increase enrollment and persistence.
It could be scalable and data generating; the partnership
could initially be implemented in a select group of states, or it could
be gradually phased into every state.
It could be internally accountable, holding participating
students harmless against tuition increases and encouraging timely
degree completion.
Students could use their grant assistance at public and
private accredited colleges.
The federal government could encourage states to award
available grant aid to students that participate in an early
intervention program; programs that utilize strategies such as
mentoring, counseling, academic support, providing financial
information, involving parents, and visiting college campuses.
The partnership could take advantage of existing early
intervention programs such as TRIO, GEAR UP, I Have a Dream, and those
operated by private (corporate and philanthropic) firms.
The federal government could ensure consistency of grant
aid each year of college by minimizing the current student ``work
penalty,'' by which wages earned to cover unmet need reduce grant aid
in subsequent years, as a means of encouraging persistence.
Colleges could encourage academically qualified low-income
students to attend their school by offering matching grant aid, and by
providing support services that help students persist to degree
completion.
Benefits: The proposed partnership would allow the federal
government to leverage existing Title IV programs to expand low-income
students' access to college; thus, allowing the nation to produce more
skilled workers. The partnership provides states with the opportunity
to strengthen their need based grant programs to offset the rising tide
of college costs. The partnership would also provide colleges with
additional funds for persistence grants and support services. States
and colleges would benefit from a student population that was more
motivated, by an early assurance of financial access, to prepare
academically and to persist to degree completion. Students of low-
income families would also benefit from an early assurance of financial
access, as it would encourage them to have higher expectations to
attend college and they would receive better information with which to
make plans to attend college. Students would also benefit from the
reduction of financial and procedural barriers to college access;
students would receive a simpler financial application, a clearer
articulation of the financial aid available, and consistent grant aid
each year of college, through the elimination of the student ``work
penalty.''
______
Chairman Hinojosa. At this time, I would ask Luke Swarthout
to proceed.
STATEMENT OF LUKE SWARTHOUT, HIGHER EDUCATION ADVOCATE, U.S.
PUBLIC INTEREST RESEARCH GROUP
Mr. Swarthout. Chairman Hinojosa, other members of the
committee, thanks for convening this important discussion
today. I will be speaking on behalf of the U.S. Public Interest
Research Group.
USPIRG is a national network of state-based, non-partisan,
non-profit organizations based in 30 states and working with
students on over 100 campuses. Over the last decade, our higher
education project has worked to represent hundreds of thousands
of student members here in Washington, D.C., in urging for
increased access to an affordable education.
I am going to briefly summarize my written testimony and
focus on two main challenges facing students: primarily issues
of need-based financial aid and issues of rising student debt.
I expand on these issues and others in my written testimony and
would be happy to take questions on any of them.
The goal of our financial aid system is to ensure any
student has access to an affordable education regardless of
their financial background. Unfortunately, recent studies,
including those by the Advisory Committee, have shown that we
are falling short of that goal, that there are hundreds of
thousands of students every year who are academically qualified
but who don't persist onto college primarily due to financial
costs.
Rising college costs and stagnant grant aid are having a
real impact on college students, whether that is preventing
students from going on to college or simply changing the way
they progress through college. We are facing serious
challenges.
Many students are choosing not to start at a 4-year
institution but rather start at a 2-year institution and
progress along through that process. Other students are
choosing to extend the period of how long it takes them to get
through college. And while these may be ways to avoid debt or
come up with available funds, it has the overall impact of
decreasing graduation rates, which is something we should all
be concerned by.
Congress has the ability to take a strong step in solving
these problems by increasing the maximum Pell grant award in
the fiscal year 2008 budget. The maximum Pell grant award has
remained stagnant for--up until this year, it remained stagnant
for the last 4 years. And it is actually worth less than it was
30 years ago.
Last fall, the secretary of education's Commission on the
Future of Higher Education recommended that the maximum Pell
grant award be funded at 70 percent of the average 4-year
college tuition. According to the American Council on
Education, such an increase would peg the maximum grants at
approximately $6,200. The commission report provides a useful
framework to start thinking about where we need to be funding
this important grant program.
The second major financial challenge that I would like to
address is the issue of rising student debt.
As college costs have increased and more of the costs have
been pushed onto the backs of students, we have seen more
college graduates leaving school with serious amounts of debt.
About two-thirds of students graduate with loans averaging
about $19,000.
But we have also seen in the last decade a seven-fold
increase in the number of students borrowing above $40,000 in
loan debt. Recent reports suggest that some students, from fear
of this debt, particularly amongst first-generation students,
will dissuade them from persisting on to college.
And while more research needs to be done on the issue of
access, it is quite clear that debt is having a serious effect
on affordability. We released a report last year, the one that
the chairman referenced, ``Paying Back, Not Giving Back,'' that
found that 23 percent of public college graduates with loans
had too much in debt to manageably repay at a starting
teacher's salary. Furthermore, debt has been found to delay
when graduates start families or are able to make purchases and
investments like buying a home.
We think that we need to expand and reform the income-
contingent repayment system. We are supportive of proposals
like Congressman Petri's IDEA proposal and fair payment
assurance, which is embedded in Senator Kennedy's Student Debt
Relief Act.
But beyond simply making debt more manageable, we need to
take the steps to reduce the increased demand for debt burden.
And certainly, what I talked about in terms of need-based
financial aid will have an impact on that as well.
A college education remains an incredibly valuable
investment and accomplishment for American students, whether
that is economic or intellectual opportunities open to them. An
educated populace remains an incredible investment for our
society, critical to our civic and social and economic health.
But we do face real challenges. I have chosen to outline
two here today. And we hope that the committee will look hard
at serious reforms in the upcoming Higher Education Act
reauthorization discussion to help reduce barriers and ensure
access for all students to an affordable education.
Thank you.
[The statement of Mr. Swarthout follows:]
Prepared Statement of Luke Swarthout, Higher Education Advocate, United
States Public Interest Research Group (U.S. PIRG)
U.S. PIRG is the federation of state Public Interest Research
Groups--a national network of state based non-partisan, non-profit
public interest advocacy organizations based inn 30 states. We work
with students on more than 100 college campuses across the country. For
more than a decade, our Higher Education Project has represented
hundreds of thousands of college student members at the federal level
by working to increase access to an affordable college education. On
behalf of our members I want to thank you for convening this hearing
and offering us the opportunity to testify.
In my testimony I will focus on the issues and challenges that
students and their families face as they apply to college and as
students move through college. In particular, I will focus on places
where federal policy affects students and their choices or on places
where federal policy could help students and their families manage this
process.
I would like to highlight some of the principle challenges facing
high school students as they apply to college: the lack of financial
aid, an overly complicated process, and the need for additional
information.
Grant Aid
Our financial aid system is designed to ensure that academically
qualified students are able to attend college regardless of their
financial situation. The federal government plays a critical role in
guaranteeing access to college for millions of low- and middle-income
students through programs like the Pell Grant and Supplemental
Education Opportunity Grants. Unfortunately recent studies suggest
hundreds of thousands of students are unable to progress from high
school to college because of a lack of financial aid.
Students face real challenges paying for higher education. Rising
college costs and stagnant need-based grant aid has put college out of
reach for many students and families. For other students, cost has
forced them to change how they progress through college, starting at a
2-year institution rather than a 4-year college or extending their
college career to limit loan debt or to simply come up with sufficient
funds to pay their tuition bill.
The Advisory Committee on Student Financial Assistance estimates
that over the past decade between one million and 1.6 million qualified
high school graduates did not attend college largely due to lack of
financial aid. Their recent report, Mortgaging Our Future, estimates
that between 1.4 and 2.4 million students will be similarly limited
from attending college during the next decade for the same reasons.
These estimates do not include the students who will choose to attend
2-year institutions rather than 4-year colleges due to cost. We concur
with one of the key conclusions of their report: we must increase need-
based aid from all sources--federal, state, institutional and private.
Congress should take steps to increase funding for the Pell Grant
in the FY08 budget. In real dollars, the maximum Pell Grant award is
worth less than it was worth thirty years ago. Over the past five years
the value of the maximum grant award has declined relative to inflation
and the cost of college. The 2007 budget passed this February increased
the maximum grant award by $260 and marked the first increase in 4
years. Last fall Secretary of Education's Commission on the Future of
Higher Education called for an increase in the maximum Pell Grant to
70% of the average 4-year college tuition. According to a recent
analysis by the American Council on Education that would set the
maximum grant award at $6,200. The Commission report provides a useful
measure in thinking about where the maximum Pell Grant level should be
set to ensure access to college for all students.
Admissions and Financial Aid Process
As a college degree becomes more critical, the process for applying
to college and for financial aid has become more complicated. As
teenagers, students and their families are faced with a series of
meaningful and difficult choices--from what institution to attend to
how to finance their education. Three choices in particular stand out:
what school to apply to, how to fill out the FAFSA form and how to
interpret the financial aid package.
College Choice: Even as millions of new students apply to college
and universities every year, there is a clear absence of centrally
catalogued consumer information to assist families in their choice of
college. This information, including cost of attendance, net price, and
financial aid at the institution, would help students assess comparable
institutions and provide common points of comparison between
institutions. Adding more clarity to the cost of college on a user-
friendly website would help immensely as students and families navigate
the college admissions process. Clear information would also help
current students understand and track changes in cost over their
college experience.
The COOL (College Opportunities Online Locator) website seems a
likely place to hold such information. However our interest is ensuring
students have access to this information regardless of the location.
FAFSA. The Free Application for Federal Student Aid is the federal
form that students fill out to determine their eligibility for
financial aid. The complexity of this form has led it to be compared
unfavorably to federal tax returns. The consequence of this overly
complicated form and application process is the underutilization of
federal student aid. Approximately 1.5 million Pell Grant eligible
students did not fill out the FAFSA form in 2004.
There are many ways we can simplify this process. We support a
recent proposal by Chairman Miller and Representative Emmanuel to use
IRS data to pre-populate the FAFSA form with information taken from tax
returns. According to The Institute for College Access and Success,
nearly two-thirds of the asset or income related questions on the form
could be filled out through such a process.
Financial Literacy. The third procedural challenge facing students
as they prepare to attend college involves understanding the various
components of their financial aid package. As more students and
families borrow to pay for college and as those loans increase in size,
financial literacy has become more critical. With average student debt
nearing $20,000 and a significant percentage of borrowers owing in
excess of $40,000, the interest rates, terms and conditions of those
loans will have a greater effect on the choices of graduates after they
college. The distinction between federal student loans and alternative
or ``private'' loans or whether a parent should take out a PLUS loan or
a second mortgage are increasingly meaningful questions for American
families. As we ask students and their families to shoulder a larger
share of the burden of college finance we must ensure that they are
prepared for this responsibility.
Textbooks
For families who have budgeted for the cost of college, high
textbook costs can be an unexpected shock once a student reaches
campus. While textbook costs are rarely, if ever, factored into
tuition, a recent PIRG study found that students pay an average of $900
a year for college textbooks and that increased costs have been driven
by such publisher practices as issuing frequent unnecessary new
editions and bundling books with unnecessary additional materials. Such
practices have driven the cost of textbooks to rise far faster than
inflation and have undercut the capacity of students to resell their
textbooks. For students at some community colleges, textbooks cost can
represent up to 40% of the cost of college. As a result of rising
prices, some students wind up sharing books or going without textbooks.
At the instruction of Ranking Member McKeon and Representative Wu, the
Advisory Committee on Student Financial Assistance is undertaking a
study of potential textbook reforms. I would encourage the Committee to
consider textbooks as a real financial challenge facing students and
encourage them to take several steps to help students including
mandating publishers disclose textbook prices when they market on
campus.
Financing College: Work and Loans
Rising college costs and lack of financial aid have caused students
to work more and borrow more to pay for college. The former is
undermining the college experience for millions of students while the
latter is increasingly dictating what students can do after they
graduate.
Working during the semester and over the summer has long been a
part of how students pay for college. Indeed the federal work study
program is founded on the belief that some work may even be beneficial
to a student's college experience. Unfortunately full-time students
increasingly also work full-time jobs that undermine their studies and
their college experience. Whereas work was once one piece of the
balanced college experience, it is increasingly a burden particularly
for students from low-income families.
According U.S. PIRG's report At What Cost?, 74% of full-time
students graduating in 2000 worked while attending school. Of these
students, nearly half worked more than 25 hours a week. These students
reported needing to work to pay for college. In addition, they reported
that their work schedules had a negative experience on their grades,
limited their class schedules and the number of courses that they could
take and their extra-curricular experience. Increased reliance on work
undermines the college experience for millions of students. In
addition, it encourages students to take fewer classes in a semester
and to extend college beyond 4 years. Students working full-time are
significantly more likely to interrupt their college careers than those
working only part-time.
The challenge of balancing work and school weighs heaviest on low-
income students who can expect less financial assistance from their
families. As a result, they bear a larger share of the cost of college
and need to work longer hours than their peers from wealthier
backgrounds. In addition, students from low-income families are more
likely to describe their work as necessary to paying for their
education than students from upper-income families. Congress can help
these students by increasing federal student aid and helping to
restrain rising college costs.
The final major financial challenge facing current college students
and their families is the issue of rising student debt. Over the past
decade, as more of the cost of college has been passed onto students,
borrowing has significantly expanded. Nearly two-thirds of four-year
college students borrow to pay for college, and the average student
graduates with approximately $19,000 in loan debt. Some recent reports
suggest that fear of debt dissuades some segments of the population
from attending college. While the impact of student debt on access is
being explored, debt's impact on affordability and the choices that
students make during college and after graduation is increasingly well
documented. Student debt dictates the career paths that students can
follow. According to a recent U.S. PIRG report, 23% of student
borrowers at public colleges would have unmanageable debt on a starting
teacher's salary. High student debt may dissuade graduates from
starting a family or persuade them to delay major investments like
purchasing a home.
A college degree should be about opening doors for students,
providing them with new opportunities whether intellectual, economic or
occupational. As student debt expands and as more students turn to
private loans to pay for college, we risk undermining that fundamental.
Congress should reform and expand the income contingent repayment
system for students to ensure that they can manageably repay their
student loans without undermining the opportunity of their college
education. We are support proposals such as the Income-Dependent
Education Assistance Act introduced by Representative Petri and the
language included in Senator Kennedy's Student Debt Relief Act under
the heading ``Fair Payment Assurance.'' Beyond simply helping students
manage debt we must take concrete steps to reduce the burden of
borrowing facing recent graduates including meaningful increases to
need-based grant aid.
A college education remains an incredibly important personal
accomplishment, associated with greater wealth, better health and
increased civic participation. An educated populace remains a critical
priority for our national civic, social and economic health. I have
outlined some of the key challenges and issues facing students. I would
encourage you to adopt key changes to the Higher Education Act to both
help our nation's students and families and to keep our nation strong.
______
Chairman Hinojosa. The final presenter witness will be
James Boyle.
You may proceed.
STATEMENT OF JAMES A. BOYLE, PRESIDENT, COLLEGE PARENTS OF
AMERICA
Mr. Boyle. Thank you, Mr. Chairman and members of the
subcommittee. I appreciate your inviting me to testify today.
My name is Jim Boyle, and I am the president of College
Parents of America, the only national membership organization
for current and future college parents.
Our group's mission is to empower parents to best support
their children on the path to and through college. Much as AARP
does for seniors, we aim to fulfill that mission by providing a
three-pronged mix of advocacy, timely information and access to
discounts, in our case, on college-related spending.
College Parents of America is still relatively young,
established in 2003. But the topics you are examining today--
barriers and solutions to paying for a college education--have
been on the minds of parents since the first tuition checks
were dropped in the mail a couple of centuries ago.
For decades, of course, the barriers and solutions to
paying for college were relatively simple. The only students
who went to college were those whose parents could afford to
pay for it. That is not an era that any of us would like to
revisit.
As college-going rates increased and schools, both public
and private, multiplied, the issue of paying for college got a
bit more complicated, and various solutions rose forth.
Academic grants, athletic scholarships, support from local
business or community groups all became ways to help young
people attend the college or university of their choice.
Since there is little time for a complete history of paying
for college in America, I will jump to the 1970s when the
foundation for student aid that still exists today was put in
place.
For some period of years, perhaps a decade, it was possible
for a student to achieve a college degree with support from a
mix of Pell grant, institutional aid, federal student loans,
some work study, and compensation from a summer job. As a 1979
graduate of Northwestern, I benefited from those programs
myself.
There were challenges to paying for college, to be sure.
But they did not seem as insurmountable as the barriers for
students and their families appear today.
Parents of today's college students have seen their child,
in many instances, break through the gauntlet of competitive
college admission, only to arrive anxiously on campus, where
there is no rest for the weary, with attrition levels in the
double digits. Given this scenario, parents are naturally
concerned about the status of their own college investment and
whether the money spent is supporting their child's academic
success in a safe, healthy learning environment.
On our collegeparents.org Web site, we have a blog. In one
of the topic areas, we ask parents to comment on how the cost
of college affects their family.
One posting from Lena began this way: ``The fetal
position--that is what I revert to every year for 3 days, as I
have to fill out FAFSA forms and loan applications for the next
year. How will I ever get out of debt? I feel that question as
I know now that I am digging myself deeper and deeper into a
hole. I am in so far now, I have to just keep going and hope
that the investment in my three children pays in the end.''
Another parent named Ann wrote, ``I thought we had done
pretty well saving for college in a 529 for our son, who is to
be a freshman this fall. What an eye-opener the FAFSA was. It
turns out we are expected to pay freshman year only every penny
we have saved, an amount equal to 40 percent of our yearly
income. I guess parents are supposed to stop saving for
retirement, eat Ramen Noodles and turn the thermostat down 10
degrees in order to meet the cost of college.''
So what are the paying-for-college solutions that should be
congressional priorities? The three legs of the stool--aid,
loan, and tax policies--should each play a part in the crafting
of those solutions.
We believe the three principal ways that Congress can put
college within more reasonable reach are by placing more
federal dollars into grant aid, in particular, by raising the
maximum level for a Pell grant, making the federal student loan
program more family-friendly by increasing the limits on the
amount that may be borrowed via federal student loan, and by
increasing the subsidies directed toward both student and
parent loans so that private loans are not utilized as much as
they are today, and making permanent the now-precarious
ability, due to expire again at the end of this year, for
families to deduct a portion of college-related expenses and,
while doing so, raising that deduction from its extremely
modest $4,000 to a more reasonable amount of $12,000.
I think a fair question to ask is, how can student aid
account for less than 1 percent of the federal budget when more
than 80 percent of the jobs that would be created in the next
10 years will require a post-secondary education?
Since there is a decidedly mixed message when it comes to
state funding for higher education, we face a potentially
massive college access crisis without a substantial federal
investment in student aid. Federal student aid is more
essential than ever as a means of ensuring that all of
America's young people have a chance to achieve their
potential.
I thank you again for the opportunity to testify before you
today and look forward to working with other members of the
panel and those of you on the subcommittee.
Thank you.
[The statement of Mr. Boyle follows:]
Prepared Statement of James A. Boyle, President,
College Parents of America
Mr. Chairman and Members of the Subcommittee, thank you for
inviting me to testify today. My name is Jim Boyle, and I am the
president of College Parents of America, the only national membership
organization for current and future college parents.
Our group's mission is to empower parents to best support their
children on the path to and through college. Much as AARP does for
seniors, we fulfill that mission by providing a three-pronged mix of
advocacy, timely information and access to discounts, in our case on
college-related spending.
College Parents of America is still relatively young, established
in July 2003, but the topics you are examining today--barriers and
solutions to paying for a college education--have been on the minds of
parents since the first tuition checks were dropped in the mail a
couple of centuries ago.
For decades, of course, the barriers and solutions to paying for
college were relatively simple--the only students who went to college
were those whose parents could afford to pay for it. That is not an era
that any of us would like to revisit.
As college-going rates increased, and schools--both public and
private--multiplied, the issue of paying for college got a bit more
complicated, and various solutions rose forth. Academic grants,
athletic scholarships, and support from local businesses or community
groups all became ways to help young people attend the college or
university of their choice.
Since there is little time for a complete history of paying for
college in America, I'll jump to the 1970s, when the foundation for
student aid that still exists today was put in place. For some period
of years, perhaps a decade, it was possible for a student to achieve a
college degree with support from a mix of Pell Grant, institutional
aid, federal student loans, some work-study and compensation from a
summer job. As a 1979 graduate of Northwestern University, I benefited
from those programs myself.
There were challenges to paying for college, to be sure, but they
did not seem as insurmountable as the barriers for students and their
families appear today. And whether those barriers are real--or just
perceived--either the reality or the perception can have a damping down
effect on college-going rates, and college success rates too, as it
becomes more difficult for families to meet--or think they can meet--
the cost of all four years of higher education.
Parents of today's college students have seen their child, in many
instances, break through the gauntlet of competitive college
admissions, only to arrive anxiously on campus where there is no rest
for the weary, with attrition levels in the double digits. Given this
scenario, parents are naturally concerned about the status of their own
college investment, and whether the money spent is supporting their
child's academic success in a safe, healthy learning environment.
The sticker price to attend college continues to go up at a much
faster rate than the consumer price index, and that causes great
angst--and bewilderment--for parents across the country. Let me give
you two examples of parent reactions.
On our collegeparents.org Web site, we offer a blog called
``Hoverings,'' with its playful title meant to be a tongue-in-cheek
reference to the term ``helicopter parents,'' which seems to have taken
hold in the media as a way of describing today's college moms and dads.
The blog covers some serious issues, however, and in one of our topic
areas we asked parents to comment on how the cost of college affects
their family.
One posting, from Lena, began this way: ``The fetal position: that
is what I revert to you every year for three days as I have to fill out
FAFSA forms and loan applications for the next year. How will I ever
get out of debt? I feel that question in the pit of my stomach as I
know that I am just digging myself deeper and deeper into a hole. I'm
so far in now, I just have to keep going and hope that the investment
in my three children pays in the end.''
Another parent, named Anne, wrote: ``I thought we had done pretty
well saving for college in a 529 for our son who is to be a freshman
this fall. What an eye-opener that FAFSA was! Turns out that we are
expected to pay, freshman year only, every penny we have saved, an
amount equal to 40 percent of our yearly income. I guess parents are
supposed to stop saving for retirement, eat Ramen noodles and turn the
thermostat down 10 degrees in order to meet the cost of college.''
The bottom line is that college costs are a barrier for the vast
majority of parents and students because the dollars required to meet a
school's financial expectations are often far above and beyond what is
available in a family's monthly budget.
Since this is a hearing on both barriers and solutions, I won't
spend any more time now bemoaning the situation in which we, as a
nation, find ourselves. We should be turning to solutions, and today's
conversation can be a significant step in that direction.
There is every reason to get started ASAP. There is overwhelming
evidence that a college education helps to create a more productive
workforce and a more informed and active citizenry. It may seem
obvious, but I think it is always worth pointing out the nation's
economy and security depends on increasing the ability of future
generations of students to obtain a college degree.
So what are the paying-for-college solutions that should be
congressional priorities? The three legs of the stool--aid, loans and
tax policies--should each play a part in the crafting of those
solutions. Not all are within the purview of this committee, or this
committee alone, but each can play an important role in helping
families to meet the high cost of college.
College Parents of America believes that the three principal ways
that Congress can put college within more reasonable reach are by:
1. placing more federal dollars into grant aid, in particular by
raising the maximum level for a Pell Grant;
2. making the federal student loan program more family-friendly by,
for example, increasing the limits on the amount that may be borrowed
via a federal student loan and by increasing the subsidies directed
toward both student and parent loans; and
3. making permanent the now-precarious ability for families to
deduct a portion of college-related expenses and, while doing so,
raising that deduction from its extremely modest $4,000 figure to a
more reasonable amount of $12,000.
I think a fair question to ask is how can student aid account for
less than one percent of the federal budget when more than 80 percent
of the jobs that will be created in the next 10 years will require a
postsecondary education?
Maybe not a fair question, at least for this committee, relates to
the provisions in the tax code on tuition tax deductibility, as
compared to some other federal tax deductions. And that question would
be: if the tax code is supposed to reflect our society's values, how
can we look ourselves in the mirror when a $100,000 luxury SUV can be
deducted if used for business purposes, yet only $4,000 of college
expenses are available for deduction?
Since there is a decidedly mixed message when it comes to state
funding for higher education, we face a potentially massive college
access crisis without a substantial federal investment in student aid.
Federal student aid is more essential than ever as a means of ensuring
that all of America's young people have a chance to achieve their
potential.
At College Parents of America, we are attempting to do our small
part to educate parents about the various options for financing
college, so that no doors of educational opportunity are closed due to
real or perceived lack of funding choices. Here in the United States
Congress, you can act to push those doors wide open, and I encourage to
work together, in a bi-partisan fashion, to begin to make that happen.
Before I close, and join with my fellow panelists in taking your
questions, I want to say a few words about the recent student loan
scandals, which I know that you examined in detail last week in a
hearing with Attorney General Cuomo and which you will be pursuing some
more next week in your planned session with Secretary Spellings.
There is plenty of blame to go around in the whole sordid affair,
and it is truly a shame because I believe nearly all of the individuals
who serve as financial aid administrators, and who work for student
loan companies, do so because they are genuinely committed to helping
to make it possible for young men and women to attend college.
While further investigation may prove otherwise, I believe that a
few bad actors have taken a system that, for the most part, works well,
and made it look woefully inadequate and unfair to student and their
families.
Amidst all the clouds, however, there is a bit of a silver lining
as I believe that the scandal will accelerate an inevitable
``consumerization'' of the student loan business, helping to set a more
desirable stage where students and their parents are in the driver's
seat when it comes to loan choices.
Thank you again for the opportunity to testify before you today. I
know that various pieces of legislation have been introduced, on both
sides of the aisle, which are intended to break down barriers and
provide solutions for students and families who are struggling to pay
for college. In my limited time, I chose not to address any single one
of those bills, but instead to broadly address the topic at hand. As we
continue our discussion today and in the months ahead, I am pleased to
offer my views on pending legislation, and to join with you, as
appropriate, in communicating progress on those bills to current and
future college parents across the country. I look forward to working
with you.
______
Chairman Hinojosa. Thank you, each and every one of you.
We are going to proceed then with questions, and I am going
to be the first one. I want to address my first question to
Luke Swarthout.
You mentioned that students should have more structured
financial literacy opportunities as they plan for college. Is
this a significant issue as you speak with students across the
country?
Mr. Swarthout. I think certainly financial literacy is an
issue facing students as they try and navigate the FAFSA, as
they try and make decisions about what schools to attend and as
they try and think about what a reasonable amount of debt
should be.
Experts on financial advice sort of look at the
preparedness that high school students enter with, and even
their parents enter this process with a kind of a gap. So I
think there is certainly an issue that we see from students all
across the country.
Chairman Hinojosa. There is no question that it is very
important, after listening to you and hearing last week the
head of the Federal Reserve, Bernanke, talk about this and the
importance of being able to put all students, high school and
college, through this program. And I want to tell you that Mrs.
Judy Biggert and I are co-chairs of the House Financial
Literacy Caucus and would be pleased to work and follow-up with
your organization.
My next question to you--please answer it as brief as you
possibly can. Some students start at 2-year community colleges,
was part of your statement. And we know that some take 6 to 10
years to get their Bachelor's Degree. Tell us what two
solutions do you recommend to help students graduate in 4 to 6
years.
Mr. Swarthout. One piece of that is to increase financial
aid so students who are eligible to attend 4-year institutions
are able. And then I think Congress could help matriculation
between 2-year and 4-year institutions by encouraging schools
to have matriculation agreements that allow for the easy
transfer of students from starting 2-year institutions into 4-
year institutions.
Chairman Hinojosa. My next question is to Jim Boyle.
We are not the Ways and Means Committee, as you well know.
But one of your recommendations is for us to make federal loan
programs more family friendly by increasing subsidies directed
toward both the students and parent loans. Would you elaborate
on that recommendation?
Mr. Boyle. The explosion of debt for families has, of
course, occurred in the private loan arena, particularly over
the past 5 years and certainly over the past decade. And so,
the recommendation is that if there is increased federal
subsidy for federal loans and increased investment and a
raising of the limit on federal student loans, then more of the
borrowing can occur under that program, which offers greater
protection to families.
The reality is that the amount of money able to be borrowed
under a federal student loan today is only a fraction of the
real cost of college for most families. And then they
necessarily turn to these private loan alternatives.
Chairman Hinojosa. You closed by saying that we face a
potentially massive college access crisis without a substantial
investment in student aid. I couldn't agree with you more.
And is there any way you and your organization can help us
get that particular message to the president, the
administration, especially to the secretary of education, so
that we can maybe solve this problem?
Mr. Boyle. Sure. We stand ready to work with you to do
that.
I compared our organization to AARP at the top of my
statement. We are a little bit smaller than AARP. However,
there are actually 35 million families who fit into our
category of being current or future college parents, exactly
the same number that are members of AARP. And so, our goal is
to mobilize those families to get that message across to you
and members of the administration.
Chairman Hinojosa. My last question is to Dallas Martin.
You correctly pointed out that your membership has to
administer large and complex programs funded by the government
with limited federal resources and likewise, limited resources
from the institutions.
Do you have some suggestions on how you would--or maybe you
want to submit in writing--ideas for us to consider, as to how
the government can better support the workforce that directly
impacts our students and their families?
Mr. Martin. Well, Mr. Chairman, let me say that, you know,
first and foremost, our highest priority is obviously providing
need-based assistance to the students, because that is first
and foremost.
But the people that we represent and others that work with
us, including our colleagues in the TRIO programs and GEAR UP
and so on, are very important, in terms of being the
individuals that are out there to assist families in finding
out about these opportunities.
Unfortunately there are many families in this country,
particularly low-income students, first-generation, that are
unaware of many of the programs that are available.
We work, for example, with a program that is sponsored by
the Lumina Association called College Goal Sunday. And in that
program, one of the things that we do across the country--we
have 38 states now that participate--is we try to go out and
work with families to not only explain about financial aid
programs, but to help them fill out the FASFA. And we do this
in cooperation with these kinds of things.
But many times we are dealing with volunteers. We also use
a lot of student help and others that are in community groups.
So one suggestion that I would make is an issue that we had
back in 1980, and that was, the Congress had enacted at that
time a program to provide training and financial aid and
student support services. This was a provision that was enacted
at that time but was never funded.
The bill at that time asked for an annual appropriation of
$1 million to do this across the country through a variety of
different programs. It is no longer there, but it was an
attempt at least, even back then, to look at this need. The
need is even greater today.
So that would be one suggestion. But I would be happy to
try to provide you with some other recommendations as we go
forward, Mr. Chairman.
Chairman Hinojosa. If you can give those to us in writing,
I would appreciate it very much.
Mr. Martin. You bet.
Chairman Hinojosa. I am going to now go to my friends on
the other side of the aisle. And by special request by the
ranking member, I am going to be going out of order. There are
some who have other committees that they need to get to. So I
am going to follow Ric's suggestion and go to Congressman Petri
for his questions.
Mr. Petri. Thank you very much, Mr. Chairman.
I have a couple of questions. The first is for Mr.
Swarthout.
And I thank you for briefly referencing in your testimony
expanding opportunities for income-contingent repayment.
As you are probably aware, a number of other countries that
have instituted student loan programs to help kids have access
to higher education and pay for it, including England and I
think Australia, have also put in place systems where people in
those countries are able to repay their student loans by
withholding directly to their inland revenue services.
I have introduced legislation to do that in the United
States that would cap the obligation a person would have at 15
percent of their after-school income. And that would eliminate
the problem of default and poor credit rating. And it would
also give people the opportunity to do low-income work to
prepare for maybe more lucrative careers later. And it would
save the government collection expenses and payers a lot of
aggravation.
I wonder if you could expand on that idea, and if you have
had a chance to discuss it with students, if there is interest
out there, whether you think people would participate.
It is already done on a voluntary basis privately. But this
would have a number of advantages, I think.
Mr. Swarthout. Certainly. And I referenced this in my
testimony.
I think as student loans become a larger piece of how we
ask students to pay for college, a system that would assure
students that they can pursue their personal goals, their
personal careers without fear of unmanageable debt would be
something that students would greatly appreciate and that
would, I think, give them more confidence as they are apt to
take out increasingly large loan burdens.
I would caution to say that we don't use the development of
some good reform as a way to load more onto the backs of
students. But I think this is something that would be very
popular with students and an incredibly necessary reform as
more students take out larger debt.
And I thank you for your work on this.
Mr. Petri. A question for Mr. Martin, which, really, it
refers to this sort of elephant in the room right now. And that
is all the newspaper stories and attention that have been
focused on ties and arrangements between private lenders
largely and financial aid administrators and schools.
And I wonder if you have any comments on your
organization's consideration and then voting down efforts to
adopt gift and ethics rules a few years ago and also on the
practice of accepting large amounts of money from different
private student loan lenders to pay for conferences that your
organization puts on for lenders.
Mr. Martin. I would be happy to respond to that, Mr. Petri.
Yes, let me, first of all, say that obviously we regret
seriously some of the things that have come to light recently
and what we believe is misbehavior on the part of a few
individuals and very poor judgment.
Let me say, in terms of--you referenced the question about
our board voting down a particular thing on a ban on what
should be a limit of $50 at the time, which came as a
recommendation from a reauthorization committee that we had
before the full board.
There were a number of people that looked at this. And it
was a very close vote. But some people said, you know, ``We
think we are ethical. We don't need a limit on this. We know
what is right and what is wrong.'' There were other people that
felt that the limit was too generous. We had some people who
thought it wasn't maybe enough.
It went back and forth. And obviously like in any
democratic body when you have a board of directors, people are
going to differ. And they made that decision.
But that aside, as far as what we are doing, we have been
very concerned for a long time about what is going on in those
relationships. We have talked about that. Even as our own
association--yes, it is true that we do accept sponsors at many
of our events and receive those for our conferences. We believe
that these are business partners that are important to us.
The monies that we generate off of part of that and some of
the monies that come out of our conferences and stuff are used
to do things like the outreach programs that I talked about,
training the financial aid administrators, and other kind of
things that we think are very positive.
On the other hand, at our recent board meeting, we looked
at a lot of this. We were very concerned. And so, our board of
directors approved a resolution not only pointing out that we
don't accept or condone these actions, but in that resolution,
we agreed to do four things, which we are currently doing and
taking very seriously.
The first is for us to go back and review, even though we
have had a statement of ethical principles for a long time--is
to develop a new code of conduct to further define what is and
is not acceptable behavior on behalf of financial aid
administrators.
Second, that code of conduct also goes forward and simply
says that we want to review the association's business
practices, what are our relationships with our business
partners, which will address the very issues you are talking
about, about sponsorships and so on.
Third, we want to make certain that then, once this code is
developed, that we go out and provide an educational forum so
that all of our people understand this and that we are serious
about this, this is what we expect of people, of our
association.
And last, we ask every institution to sit back, take a
review of their own operations and what they are doing on their
own campuses today, to make certain that they are operating
with transparency, that they are putting students' needs first
and that they are doing this in an honest, ethical,
straightforward way.
Chairman Hinojosa. The time is up. And I would like to, at
this time, recognize the gentleman from New York, Congressman
Bishop.
Mr. Bishop. Thank you, Mr. Chairman. Thank you very much
for holding this series of hearings.
And thank you all, to the panel, for your testimony.
At the risk of over-generalizing, it seems to me that the
whole issue of affordability rests on three broad principles.
One is that institutions price themselves in a responsible
fashion. The second is that there be adequate sources of
assistance available from the federal government, from state
governments, and from the institutions themselves. And then the
third is that the needs-analysis system that measures the
family's ability to pay be one that does so in a reasonable
fashion.
So I guess my question would be to Dr. Martin.
Do you think our current needs-analysis system represents
an accurate, realistic measure of a family's ability to pay?
And if not, what recommendations would you provide to change
it?
Mr. Martin. Mr. Bishop, let me say that it is always
interesting how we look at this, in terms of who does that. You
know, I have had some of my members that have been critical of
some of the liberalizations that have been made to the need
analysis over the last few years of where you don't look at the
overall financial well-being of a family by taking out home
equity or other kind of things. But on the other hand, I think
it is--you know, the response is people say, ``Well, it is not
reasonable for me to have to sell my home in order to send my
son or daughter to college.'' So I think we have to balance
both of these.
I would say I think there are some further improvements.
For an example, I think we have put some disincentives right
now into the need-analysis systems. One thing that we have
recommended further refinement and improvement on, and we have
made a little progress in, is HERA.
But the other thing that I would do is I think right now
asking the assessment rate on student earnings, for an example,
is too high. I mean, students that are out there working to do
this are doing that primarily for their own existence and so
on. And then to have an assessment rate that you are supposed
to save X percent of this so that you can go back to school
just doesn't make a whole lot of sense.
And so, that is one area that I would hope that we would
examine.
Mr. Bishop. Let me maybe sharpen the question a little bit.
I think in 2005 tables were changed, the net effect of which is
that about 80,000 students lost their eligibility for Pell and
about 1 million students had their Pell eligibility and other
Title IV eligibility affected.
Mr. Martin. This----
Mr. Bishop. Let me just--would you recommend that we redo
or undo that change?
Mr. Martin. Absolutely. That was a change in the state tax
tables that caused that.
Mr. Bishop. Yes.
Mr. Martin. Place-to-place differences. And we have even
proposed other solutions of a better way to look at that for
equity.
Absolutely, I would strongly recommend you do that.
Mr. Bishop. Thank you very much.
Mr. Swarthout, you made several references in your
testimony to work and how work might be a disincentive. My
experience has been that students who work on the campus tend
to do better in class. And I think there is a fair body of
evidence that suggests that students who work on the campus
persist to graduation in greater numbers.
Where is the breaking point? I mean, if, for example, we
were to significantly increase college work study funding,
something we have not done I think in 5 or 6 years, so as to
encourage more on-campus jobs, might we be solving two
problems?
Mr. Swarthout. I refer to this in my testimony. I think
that we concur that some work is good for students. What is
concerning to us is the growth in the number of students who
are full-time, full-work students.
Whether that breaking point is more than 25 hours a week, I
think it would be hard for me to see a student working more
than 25 hours a week and still getting the most out of college.
So to be clear, I don't exactly know where that breaking
point it. I think what we would be supportive of is efforts to
increase work on campus, and provided that we are mindful that
pushing students to take up too much work undermines their
ability to study and get the most out of college.
Mr. Bishop. Okay. I have tons of questions, but one last
question for Dr. Pressnell.
You make reference to one of the six recommendations that
you would have for the Higher Education reauthorization, that
we would work to reduce the financial barriers to transfer from
2-year institutions to 4-year institutions.
I am assuming when you make reference to financial
barriers, you are talking about non-acceptability of credit. Is
that----
Mr. Pressnell. Well, actually we are referring in
particular to the financial barriers. Most of the financial aid
programs tend to be centered toward students that are incoming
students, so usually the freshman year.
Where there is a lack of financial assistance, tends to be
at that transfer point. So, for instance, those students who
desire to get a 4-year degree but may start at a 2-year
institution, their persistence to and the completion of the 4-
year degree is exceptionally low. And part of that is
attributed to the fact that there are not the financial
assistance programs available at that transfer point.
So it is not even so much the transfer of credits. There
are some very innovative approaches that are going on with
articulation agreements that we have seen across that there is,
in particular, a financial barrier for the community college
students to enter into that 4-year institution at that
sophomore or junior level.
Mr. Bishop. Okay.
Thank you, Mr. Chairman. My time is up. Thank you.
Chairman Hinojosa. Thank you.
At this time, I would like to recognize the congressman
from Delaware, Michael Castle.
He is gone? Okay. Maybe he will return.
At this time, I would like to recognize the congresswoman
from Illinois, Judy Biggert.
Mrs. Biggert. Thank you very much, Mr. Chairman. Thank you
for holding this hearing.
I would like to kind of start at the beginning maybe, and
that is savings. I think in our country our savings rate is a
negative-1.1 percent.
How could we, you know, help people, you know, to save the
money to start out?
I know there are a lot of states who have a college fund
that parents, grandparents can put money into as young as when
a child is born. And I have another bill, 401(k) Kids, which is
to make it a federal program that you could put $2,000 a year
into the college fund for a child. And that would include
grandparents, aunts and uncles. And it would not be tax-free
dollars, but in taking the interest out, which the interest
would not be taxed. And it could be used for college.
If they didn't spend it all--but I think, with the price of
colleges these days, that it certainly would be gone--but it
could then be used to buy a first house or for retirement.
Do any of you see that as feasible? Are people doing that
today so that they will have the money for colleges?
Mr. Martin. Ms. Biggert, let me just say that I think
anything that we could do to encourage families that have the
ability to save, we should be doing so. I think the 5239 plans,
for an example, have proved to be very successful in a lot of
places.
Now, there are a few states that have had trouble with part
of their funding and how they have done that in paying off. But
I think overall that is an excellent choice.
Again, I think one of the changes--going back and talking
about need analysis. We have proposed that we treat that asset
differently. Don't count it as a student asset, but count it as
a parent's asset so it is not going to be charged as much. So
those are kinds of things that encourage families to save.
But let me also just be very clear. We also know that we
have many, many families in this country that, in spite of
their wanting to save or do it, they simply do not have the
means to do so. And many of them have children who are very
qualified who would benefit from college.
So for families that can save, I agree; we ought to be
encouraging them as much as we can. But we also have to
recognize that some families, no matter what we do, are going
to still need extra help.
Mrs. Biggert. And even with the 2-year colleges now, I
think in Illinois we see that some of those schools are larger
than the biggest university in the state because people just
have to go there. But even those colleges are getting so
expensive that it is very difficult for them.
Mr. Boyle, do you have any comment on this?
Mr. Boyle. Yes, well, I think you are going to start to see
the impact of savings plans in a positive way in the next few
years because they are still relatively young. And so, there is
little comfort to parents who have kids in college today
because they really didn't have enough time to save a
substantial amount.
I would say an issue, however, that certainly pops up with
current college parents is a perceived unfairness when it comes
to savings. I have got, you know, pages and pages of entries
from parents on our list-serve going through this year's
financial aid cycle where they believe that it is unfair that
they have saved for college and then they learn about
scholarship money being doled out to families that didn't save.
And they sort of wave their hands and say, ``Why did I bother
saving? It is just coming back to bite me.''
So I think there is a communications issue for schools to
deal with that. And it is caught up in a whole swirl of
perceived unfairness issues when it comes to merit aid and
other decisions that are at the discretion of the financial aid
office.
Mrs. Biggert. Well, right now we are dealing with looking
at getting, for example, teachers to go to rural areas, or we
need more math students and more math teachers and more
engineers, so that we are saying, ``Well, your debt will be
either taken care of, or at least part of it will be dissolved,
if you give so much time to go to these areas.''
Do you see that happening? Have students taken advantage of
this? Is that working?
Mr. Martin. Well, I could tell you that if you--well,
actually there was an article in the paper today that talked
about the government's loan forgiveness program and some of the
successes of people that have gone on in the government because
of their forgiving loans and stuff of people to go into public
service.
If you look at, overall, the effects of loan forgiveness
programs, however, in terms of the percentage of people that
benefit by them and that stay in those professions, whether it
is education or other kinds of public service, the percentage
that actually take advantage is fairly low in terms of the
offerings that are out there.
You know, I am not saying that there is not some success.
But it hasn't been as successful as I think many of us had
thought they would be through the years.
And I am talking going back to 1958 with the national
defense student loan and the forgiveness programs there. And I
have watched it with every loan program since, and they all
have a similar pattern of history.
Mrs. Biggert. Thank you.
I yield back.
Chairman Hinojosa. Dr. Pressnell, can you add to the answer
to the question that Judy asked?
Mr. Pressnell. You know, it is interesting. I think we are
seeing more of those programs actually come about. States are
starting to take a little bit more action in trying to address
these particular shortage areas through these types of
programs.
One thing that I--if I could go back to your question about
the savings issue, I really want to echo what Mr. Martin said
about encouraging everyone to save as early as we possibly can.
So I think we have a number of compounding problems. We
don't have early enough information about those two at the
appropriate age level, so students at junior high, students in
high school and so forth and with parent information. Then we
have also exposed a couple of fundamental issues with the
formula, the FASFA, such as how are those savings plans treated
in the need-analysis formula. And the Advisory Committee, as
well, has offered some solutions to that that would encourage
savings, but it would also, though, assess the earnings off of
that that is applicable to that particular college year, so
those particular expenses. So you don't go and assess the
entire corpus against the family, but you do assess what is
available to them.
And the other is back on the work-loan burden, the comment
about having more college work study. The big advantage of the
college work study program, as it deals with the FASFA, is that
federal college work study is not counted against you on the
FASFA. But if you work off-campus, that income is assessed
against you.
And so, the Senate has currently proposed increasing the
income protection allowance. We would support that.
The silver bullet for this, however, and happens to be
quite costly, is that you would hold the student earnings into
the parents' income and you would just count it all as one
particular asset at the same rate. Because student earnings are
assessed at a higher rate than the parental earnings.
So there are some solutions that have been recommended.
They do have price tags as well that appreciate your
observations on.
Mrs. Biggert. Thank you.
Chairman Hinojosa. At this time, I would like to recognize
the gentleman from Kentucky, Congressman Yarmuth.
Mr. Yarmuth. Thank you, Mr. Chairman.
Dr. Pressnell, your answer there segued nicely into a line
of questioning that I wanted to discuss.
During the recent recess, we conducted two forums in my
district: one, a higher education forum, where we talked to
college officials, loan officers and so forth, financial aid
officers; and also a job development forum, where we also
talked about the relationship between the education system and
job growth.
And while everybody talked about the need for more money
and increasing the Pell grants and all the things we have
talked about today, there was a common theme that came up that
talked about structural problems in all of our financial aid
programs that were barriers to access and to completion;
talking about the fact that if you were eligible for Perkins,
you are not eligible for Pell, that some programs don't pay for
summer school, that some of the non-traditional formats of
instruction where they are shrinking the education module are
not accommodated by different financial aid programs.
Is this something? Are these types of structural problems
things that you have seen? And if they are, would you either
disabuse me of that notion, or would you just elaborate on
maybe what some other of these structural problems might be?
Mr. Pressnell. Well, I believe the Advisory Committee has
offered a number of comments, especially in the report,
``Student Aid Gauntlet,'' on what can be done with the FASFA,
not only to simplify it in terms of being more user-friendly,
moving more toward technological solutions with the FASFA, but
as well dealing with some of the issues, in particular, how
they impact low-and moderate-income families around student
work issues, in particular, trying to take a look at increasing
the auto zero and the simplified needs test for those families
that are already in federally means tested programs.
So we have addressed some of those structural issues that
we do believe will help address some of those solutions.
The federal government, the programs like the Pell grant,
the campus-based aid programs, the TRIO programs and so forth,
are really proven and tried programs. And they are affecting
the appropriate populations. The Pell grant program definitely,
within the right scope, is hitting especially the low-income
and moderate-income families.
The campus-based aid programs, again, are structurally
sound in that it penetrates down to the level of the counselor
and the family and allows some discretion in that based on Pell
eligibility to increase some of those aid programs.
The recommendation that I made in my comments about
creating a partnership, I think, might help further some of
those solutions. The LEAP program and the special LEAP program
is already a federal model of the federal government partnering
with state. And if you then can bring more people such as your
corporate partners, your foundations that are interested in
helping low-to moderate-income families and begin to pool those
resources with institutional aid, then that puts more in there
to reduce some of those burdens.
But you are right, it is going to take multiple strategies
to ultimately address this. You are going to need strategies
that address the structure, address the formula slightly, but
also maybe make some programs more robust.
Mr. Yarmuth. We have, quite appropriately, I think, focused
to a large extent on high school issues and, kind of, the
traditional student. But in Kentucky, we have a half-million
adults who have some college education, dropped out for a wide
variety of reasons, and who are out there and would love to
have the opportunity to complete their college education. And
that is a half-a-million people who could better their lives
and grow the economy, are important to Kentucky and virtually
every other state.
Are there things that you could recommend that we might do
to address the problem of the adult student who would like to
complete a college education he or she had to desert?
Mr. Pressnell. Well, I think that, from a financial aid
standpoint, I think that we really need to enable our financial
aid directors to feel more freedom in exercising professional
judgment so that they can base their aid on expected family
income.
Now that is available to them, but there is some hesitancy
among some financial aid directors to exercise that too
aggressively. And some of that is appropriate. But usually it
tends to penalize your non-traditional students that are doing
just what you said, where last year's income, which is what the
system is based upon, is not reflective of their present
situation as they are about to enter into college.
I think, as well, encouraging states to make sure that
their financial aid programs give allowances for the non-
traditional students. And I know our state, in particular,
Tennessee, is trying to take a look at how their financial aid
programs are also geared toward those non-traditional students.
So you have that.
Then, again, at the institutional level, it deals with
programmatic flexibility, evening courses. And I think you are
finding a lot of institutions are moving in that direction,
online solutions as well as accommodating their schedules.
Mr. Martin. Mr. Yarmuth, could I also just say to you that
you talked about--I think part of it, again, is making certain
that the adults have the information about what is available,
too, because many of them don't know.
The second thing you mentioned is structural problems. Let
me give you an example. I have worked with situations of where
it is not unlikely that your state people get laid off from
work. They lose their job. They are trying to get back. They
are trying to get back into the workforce. They go back to
school to begin to do that training.
In the meantime, they may be drawing unemployment
compensation or something. But there is a time limit on that.
And the time limit doesn't match up with, necessarily, the time
limit they need to complete that certificate or degree.
And somehow if we could get some of the agencies to
understand this when we are supported both ways that if you are
doing those kinds of things on stuff that is worthwhile, to
provide that additional support. We could provide enough for
the educational benefits out of the Title IV program, but it is
the other big costs of that living. In many cases, they have
families and so on that they are trying to deal with. So it is
that kind of coordination that we need to look at.
Chairman Hinojosa. Thank you.
I would like to now yield time to the ranking member, the
gentleman from Florida, Congressman Keller.
Mr. Keller. Thank you, Mr. Chairman.
And, Dr. Pressnell, I think I heard you mention
matriculation agreements. Is that right?
Mr. Pressnell. I did.
Mr. Keller. Okay. I just think that matriculation
agreements may well be the future of college access for low-
income young people. And I want to explore that a little bit
with you.
And for those who aren't as familiar with it, take my
community of Orlando, Florida. Probably the best deal for a 4-
year education is at the University of Central Florida. The
total package for tuition and room and board is around $12,000,
of which tuition is about $3,400. But it is a very competitive
school. The average SAT is over 1,200. And they have, I think,
46,000, 47,000 students going there.
So they entered into a matriculation agreement with the
local community college, called Valencia Community College,
where you can go to Valencia literally full-time for $1,500 a
year. And after you get your Associate's Degree, after 2 years,
you are guaranteed, 100 percent, admission into, specifically,
University of Central Florida. So it is a very cost-efficient
way to get your 4-year degree and save a place for you in a
very competitive school.
Is that the type of matriculation agreement you are talking
about? And what is your view of these agreements in general?
Mr. Pressnell. Well, that, I think, is a very good model.
And I think that what we find--anything that institutions can
do to ease the transition from a 2-year institution to a 4-year
institution should be done. And I think that each institution
has the ability to assess what their strengths are and what
program correlations that they have with existing community
colleges in their area.
And in many cases, the institutions are trying to work out
partnerships. Four-year institutions tend to have more spaces
at the junior, senior level.
Mr. Keller. Because of certain kids dropping out after the
first, second year?
Mr. Pressnell. Sometimes that occurs.
One program, or one issue, that we have tried to address at
the Advisory Committee in particular, which is who I am
representing today, is that we need to also make sure that not
only is there course-level and degree congruency in transfer,
but there has also got to be some financial support for those
students. Because once they again are at a 2-year institution
maybe paying $1,500 a year and then they transfer into an
institution where the costs are considerably higher, as we look
at low-and moderate-income families, there have to be some
financial incentives there for them to make it.
So not just academic, but also this financial transition.
Mr. Keller. Okay.
All right. Let me move on just a bit.
Mr. Boyle, you want to increase the deductibility of
college tuition from $4,000 to $12,000. Is that right?
Mr. Boyle. Yes.
Mr. Keller. Are you concerned at all about the eligibility?
For example, right now to get the $4,000 deduction, if you are
single, you have to make $65,000 or less, and if you are
married, $130,000 or less.
Do you think that is sufficient? Or should that be raised
to accommodate more middle-class folks? Or what is your opinion
on that?
Mr. Boyle. We actually believe that the limit should be
eliminated, that the deduction should be available to all
taxpayers, that in terms of sending a signal about the
importance of higher education, that just as the mortgage
interest deduction is available to all, so should an investment
in higher education.
And the $65,000 limit, particularly for single-income
single parents is extremely low, that they are caught in a true
middle-class-squeeze situation, where they are not eligible for
financial aid yet not able to deduct the cost of college.
Mr. Keller. Right. And I don't disagree with you on
anything you just said. But have you looked at what the price
tag might be for that, or seen that CBO score for that?
Mr. Boyle. I looked at it about 3 years ago when we put a
petition on our Web site to that effect, but I can't recall it
off the top of my head.
Mr. Keller. The reason I asked you is I had a bill called
the Family Friendly Employer Act, and it was pretty simple and
supported by just about all the Republicans and Democrats on
the Ways and Means Committee.
It essentially said, right now an employer can put his
employee through college and deduct $5,200 a year, but he can't
put his employee's child through college. And this says, put
your employee--or the child. And the reason is, if you are a
hotel owner, the maid or janitor may not want to go to college
but the 17-year-old kid might want to.
Mr. Boyle. Yes.
Mr. Keller. And it is a very narrow thing.
And the number I got back from CBO was so sky-high, they
just assume every employer in the whole country will do it, and
they will do the max. And it just died because of that.
And so, that is one of the challenges we have when we face
very meritorious proposals like the Family Friendly Employer
Act or the proposal you just made. And we struggle with ways to
get around that.
Do you have any wisdom as to how we might make our best
case to finally get some incentives in place that will help
more low-and middle-income kids go to college?
Mr. Boyle. Well, I think it is stressing the importance of
college as compared to some of the other deductions that are in
the tax code.
I mean, the one I like to speak about, that was in my
written testimony, is, if the tax code is supposed to be
reflective of our society's values, how can we look at
ourselves in the mirror when you can deduct $100,000 for the
cost of a luxury SUV used for business purposes and you can
deduct only $4,000 for the cost of a college education?
Mr. Keller. Well, thank you.
And, Mr. Chairman, my time is expired.
Chairman Hinojosa. Thank you.
I want to add that when you have your proposed legislation
costed, you said that they figured that everyone would take
advantage of it and the cost was prohibitive. What if they were
to redo the calculations and take a look at the low-income,
moderate-income students or students from low-income and
moderate-income families and see if possibly your idea might
increase accessibility to higher education?
And using the fact that many of our prisons are filled with
minority men and women coming from that group of low-income,
moderate-income, that it would probably reduce those numbers
and thus improve the economy of our country and especially
improve the quality of life of their families.
Would you give that some consideration?
Mr. Keller. Well, I absolutely would. I am a practical man.
And 90 percent of a loaf is better than no loaf at all. And
right now I have no loaf. So I think that the whole target you
are trying to reach is low-and moderate-income families. And
so, if we could somehow narrow it to limit the CBO scores, that
is something I would be very receptive and willing to do.
Chairman Hinojosa. Thank you.
At this time, I would like to recognize the gentleman from
Virginia, Congressman Robert Scott.
Mr. Scott. Thank you, Mr. Chairman.
Mr. Boyle, let me follow up on that last question. If we
had some new money on the table, would it make more sense to
spend it on deductions or increasing Pell grants?
Mr. Boyle. Well, I guess, the way the question is posed, I
think it should be probably 60-40: 60 percent toward increasing
Pell grants and then 40 percent made available for ability to
increase deductions.
Mr. Scott. Okay.
Mr. Martin, do you know how many low-income students fail
to go to college because they just can't afford it?
Mr. Martin. There have been different estimates, Mr. Scott.
The Advisory Committee recently had come out with a report that
said there was more than 1 million a year that are qualified
and not able to go because of this. There are some estimates
higher than that, some lower. But it is an awful lot of them.
And let me say that, again, to answer your question that
you asked Mr. Boyle, I would put the money into Pell grants
because, for many of the low-income students, these are not
people that necessarily are going to benefit with that
deduction. And I understand the other part of it. But I think
we have a real crisis in this country with low-income people.
And we cannot afford not to put them first on the pecking
order.
Mr. Scott. Well, let me ask the other two panelists on the
question, whether we had some more money to spend, would it be
in deductions or increase the Pell grants.
Mr. Pressnell. Yes, Mr. Scott, Dr. Martin indicated that
the Advisory Committee had issued a report that 1.4 million to
2.4 million students are going to be lost in this decade. That,
by the way, are students who took and completed Algebra II and/
or Trigonometry. So these are highly college-qualified
students.
Mr. Scott. Yes.
Mr. Pressnell. I believe that if the federal government
wants to issue a transformative difference in our society in
terms of breaking the cycle of poverty, reducing dependency on
other federally funded welfare programs, the money needs to go
into the Pell grant program so that low-and moderate-income
families can have access into higher education.
Mr. Scott. Thank you.
Mr. Swarthout. I concur. It ought to be our priority, it
ought to be Congress's priority, it ought to be our society's
priority to ensure that all students, regardless of their
financial background, have access to college.
The Pell grant is a time-tested program that is the best
way of guaranteeing that fundamental promise to all students.
And I would recommend that be the priority.
Mr. Scott. Thank you.
Talking about people that have lost financial aid, about
200,000 have lost it because of the drug convictions. Does
anyone have a comment on whether or not we ought to continue
the prohibition against financial aid to those who have drug
convictions?
Mr. Martin. Mr. Scott, let me say that--and I know there
was some modification of that. Mr. Souder, who is a member of
this subcommittee, had made some modifications to change that,
so it is just during the time that the individual is receiving
student aid. That is a welcome change and clarification. It
narrows it somewhat.
Personally, I would say that, if I had to choose, I would
like to eliminate it, because I think, in many cases, it is not
significant. But the least I would do is I would at least have
the process by which the time the student is sentenced, or the
individual sentenced, depending on the severity of the case, I
would allow the judge and the individual to make that choice of
whether or not that this should go away, not just across the
board.
Because there are huge differences. I am not trying to
protect people that are out there that are peddling, selling
drugs that are really the criminals. But unfortunately there
are some in our society who have experimented with something,
small amounts or something, and the cost of this is they have
messed their lives up forever.
And sometimes I think if we could help them and get a hand
up and realize the difference, it might be worthwhile.
Mr. Scott. Thank you.
Mr. Pressnell. Mr. Scott, taking a slightly different
perspective, these additional questions on the FASFA just add
to the complexity of the process for students applying for
financial aid, such as the selective service question and the
drug question.
The Advisory Committee has taken the position that the
FASFA needs to be as streamlined as absolutely possible, so
that it does address the proper administration of the aid
program. So the Advisory Committee's position is that those
questions be removed from the form.
Mr. Scott. Thank you.
On the contingent payment plan, what is a reasonable
percentage of income on a contingent repayment for students
paying back student loans on a contingent?
Mr. Swarthout. Sure. The best study on this came out last
year from an economist, Sandy Baum. And she said that some
amount of income should be protected, anything about $18,000,
$19,000, equivalent to 150 percent of poverty.
A recent graduate who has that income needs to devote most
of that to housing and food and transportation, but that, above
that, it would be reasonable to expect about 15 percent of what
she called discretionary income, which would be above about
$19,000, in her estimation, which would make sure that you are
protecting people who are with the lowest income and targeting
your subsidy to the students with the most need, people
entering public service careers, teachers who start with low-
income, rather than helping students who graduated and are
lucky enough to have more lucrative income.
So I would use that as a litmus test.
Mr. Scott. My time is just about up. I wanted to get in one
more question, and that is whether or not students ought to be
able to refinance their loans any time they want, rather than
getting stuck and locked in.
You can redo a mortgage whenever you want. Is there any
reason you can't have multiple refinancing of student loans?
Mr. Martin. Well, this has been an interesting topic. And
the question is, when you do that at certain times, it
obviously can be very costly. And if we had all the resources
we need, I would say absolutely.
I would say if you are going to allow the multiple
refinancing on these, I would at least look at means testing of
who qualifies, because if people are out there making lots of
money, very successful from their degrees--and there are a lot
of these people that are simply going out and doing that, you
are turning around and asking the taxpayers to help continue
subsidies that you have already received because you have got
your loan. They have already had the benefits of that. You are
out there.
I understand for lower-income people or people that are
struggling, public-interest kinds of jobs and stuff, aren't
making much, yes, because of the debt thing. I think there are
other ways that we could deal with restructuring, such as what
Luke has mentioned here with some repayment options to give
people better relief by restructuring the programs.
The likelihood of people that have to go out and refinance
all the time would be greatly reduced.
Chairman Hinojosa. At this time, I would like to yield time
to the gentlewoman from California, Congresswoman Davis.
Mrs. Davis of California. Thank you, Mr. Chairman.
Thank you to all of you for being here. I know that you had
an opportunity to cover some of the financial literacy areas.
But I just wanted to see if you have any particular
suggestions.
And, Mr. Boyle, heading up the parents group, how do we
educate parents better? Are there some avenues out there that
haven't been addressed very well? Do you think schools have
some best practices that you have seen? Or is that a whole
other area that we need to work harder and better in?
Mr. Boyle. Well, I think in the area, as referenced
earlier, of public and private partnership, this is one that
lends itself well to that.
I think the Jumpstart Group Coalition has nearly every
major financial service company as part of it. And every year
when they present their programs, there is no shortage of
wonderful programs going on across the country. Yet it still
doesn't seem to make a dent into the issue.
So I think it is investing those programs into areas and
reaching families who aren't necessarily just their customers
but who are potential customers and could benefit from that
information.
Also I think there is something to be said for better
training of college counselors at the high school level so that
they can better address financial questions of parents,
specifically as it relates to paying for college.
I think the situation right now is most of them are trained
on the academic side in how to get into college, but paying for
it is certainly part of the equation. Many families can't get
those questions answered and then often are turning to outside,
sometimes very expensive, resources in order to get the answers
to the questions that they need.
Mr. Pressnell. If I might, the Advisory Committee is
currently involved in an Innovative Pathways study. And a part
of that study is actually looking at early information and what
is appropriate information at various levels. And so, you know,
not the same information is applicable to all age groups.
But we are looking at--the University of Virginia has a
model right now, that they are taking some of their best and
brightest recent graduates and placing them alongside
counselors in high schools for the sole purpose of encouraging
students to go to college and how to navigate the financial aid
system. So that is one thing we have seen.
The other is that we are looking at, are there other
federal communication and state communication avenues that we
need to piggyback upon, for instance, federally means-tested
programs, free school lunches and so forth. Why not at that
early age communicate to families, communicate to the student
there is financial aid available for you to go to college and
enter into the assumption, ``Where are you going to go, and by
the way, there is money available for you,'' early on?
So the Advisory Committee is in the midst of a study that
is looking at appropriate information for appropriate folks
clear up through independent adults and parents as well.
Mrs. Davis of California. Yes, okay.
Mr. Martin. Ms. Davis, let me also say that last year--I
mean, the last Congress, Congressman Akaka had introduced a
financial literacy bill. And we, as an association, had
endorsed that and so on. Unfortunately it never became law, but
I thought it was a good model as a starting place.
But I think the Advisory Committee is on the right track of
doing it. Part of the problem is getting the information that
is appropriate to the families that need it. And we need to
find other delivery vehicles.
I mean, I know it sounds silly, but, you know, when I open
up my mail with a bill or something, there is always some
little brochure or something in there. Why don't we start
putting things in there to help families make some good
decisions?
I mean, you want to ask some people to be good citizens?
Let's go out and ask some of these corporations that stuff it
with all the other advertisements in my bill, let's ask them to
put something worthwhile that might make a difference in this
country.
Mrs. Davis of California. Yes. I appreciate that. Thank
you. We have tried to think of ways of making--I know you have
addressed the FASFA as well and whether even in the tax form
people should automatically be told that they qualify and they
may have to answer some additional questions.
But at least the financial questions are essentially done.
And people don't have to go back and go into a fetal position,
as you mentioned earlier, in order to, you know, have so much
anxiety around this. And I think that that is one of the
concerns that we have.
One of the pieces of information that perhaps you don't
have to go into great detail right now, but trying to clarify
for people: What do these private, or so-called unregulated,
loans look like? What greater impact in terms of the debt that
students will incur as a result of that? How the comparison is,
just so people have, I think, that understanding would be
helpful.
And the other thing is just, do you have a sense of what
breaks down--students take out these loans. But they also use
credit cards. Do you know what percentage of what the debt that
they actually incur comes from credit card debt that they feel
that they need to incur? And everybody encourages them to do
that, of course. Is that a very large percentage of it? Or is
it a smaller percentage really and not a significant?
Mr. Martin. It is a growing percentage of people that are
using credit cards to help finance this. And, yes, there have
been some studies, and I will be happy to make certain that we
can get you that information. You know, it is a serious concern
in terms of this.
I also would say on the market, I think the other thing
that is amazing to me--and you talked about the private loans
and they are not as favorable. It is amazing to me how many
cases we have uncovered of people taking out private loans
without going first and exhausting their eligibility for the
federal programs.
And I think a lot of that is due to the aggressive
marketing that goes directly from some of these providers of
these loans directly to families and such. And they are giving
them this because of slick marketing material. They are not
making it clear that, in fact, families are eligible for other
kinds of loans and so on.
And I hope that that is something in the regulations that
we deal with here soon that we can address, so that families
are at least aware of those options.
Mr. Swarthout. And if I might follow up on the point about
private loans, I think one of the things that we have seen in
the stories over the last month is the proliferation of
misinformation around private loans. And these are loans that
are determined, unlike federally guaranteed loans, based on
your credit score, whether you have a credit-worthy co-signer.
Frequently they are advertised by ``rates as low as.''
``Rates as low as'' is not a particularly instructive way of
educating a consumer. If 1 percent of students get the ``as low
as'' rate but the bulk of--you know, and that might be 7
percent--but there are a whole bunch of students up at 15
percent, we are doing students as consumers and families a
disservice by failing to force greater clarity in this process,
not the least of which so that they can be compared across to
federal loans, where, as Dallas mentioned, there are still a
disturbingly large number of students who do not max out on
their Stafford loans before taking out private loans.
Mr. Boyle. And part of it is the timing issue. Today, May
1st, is the day when students, you know, across the country
have to inform a school that they are planning to attend. And
they have only received those acceptances in the last 30 days,
for the most part. And so, the family, if they haven't focused
on how to meet the cost of college, suddenly has this time
crunch, and that is when these direct mail pieces are hitting
them.
They are looking for a way, ``How do I find the money? My
goodness, it is going to cost X amount.'' And they are
responding to that need. It is almost like, you know, you are
coming toward your mortgage closing date and, you know, you are
scrambling to put together the finances.
Closing date for going to school is really today, and it
puts a tremendous amount of pressure on families to make a
decision quickly.
Mr. Pressnell. But the private label loans are, you know,
having an increasing role in higher education finance largely
because federal and state financial aid programs have not kept
pace.
And we just have had a slight increase in the Pell. The
increase in the loan limits has been a long time coming. And
the freshman loan amount is still significantly low, 26, 25,
and has been there for many, many, many years.
And so, as these programs remain stagnant, there are other
solutions that come in to fill the gap.
Mrs. Davis of California. Right, and that don't necessarily
represent the true cost to the students as well.
Mr. Pressnell. True.
Mrs. Davis of California. Yes.
Thank you, Mr. Chairman.
Chairman Hinojosa. I want to make some closing remarks and
say that last week I had six students from my congressional
district in south Texas come visit Washington and visited me in
my office. All six of them were Hispanic. Five were young women
and one was a young man, all graduating seniors who had scored
over 1,250 on their SAT scores and were helped to come to the
Northeast to visit about six or seven colleges and universities
and see if they could select one to attend.
And after spending a couple of hours with them over lunch
and in my office, I asked each one of them to tell me what was
the key to the success that they had experienced in scoring so
high and being able to have an opportunity to select a college
to attend. And one by one answered, ``It was my mother who was
very involved with me in elementary school and all the way
through high school.'' The second one, it was the mother. The
third one said, ``It was my mother and father.'' The answers
were the same for all six.
And it leads me, then, to what Buck McKeon's group, which
included me, went to China to visit some of the universities
with the greatest number of engineering graduates in that
country. And we asked over and over at each university some of
the students, ``Why do you think that you all have been so
successful in international competition and scored first or
second almost every one of the last 10 years?'' And again,
their response was that they had parents and grandparents who
had spent a lot of time with them to get them to the point that
they are at those universities.
So I conclude by saying that parental involvement, together
with Judy Biggert's recommendation on savings, is definitely a
start.
And when we look at the groups that are shown in Dr.
Pressnell's report and testimony, the academic barriers, the
low-income and moderate-income group are the ones that I
believe Congress is and should be looking at finding ways to
get that parental involvement, rewards for starting a savings
account, like they do in China, which is 5 percent of every
check or salary that is paid to their family, and then to
follow that with incentives that would hopefully get those
individuals, those young men and women and, in some cases,
adults, as was presented by one of the questions that was asked
by one of the members on the Democratic side.
And that is that there has to be Ways and Means Committee
involvement helping us reach that affordability answer to the
puzzle, and that there will have to be ways in which we can
possibly give subsidized housing to those who qualify for the
Pell grants or are listed in the low-income and moderate-income
so that they can live on campus in subsidized housing, rental
housing, apartments or dormitories, so that we can shorten the
number of years for graduation, instead of 6 to 10, as I asked
earlier, and reduce it to 4 to 5, and thus have less debt than
the way that we are doing it now.
So having said that, I want to thank each of the
presenters, the witnesses, and say that it was very helpful.
And we will make all of your remarks and questions and answers
part of the record.
As previously ordered, members will have 14 days to submit
additional materials for the hearing record. Any member who
wishes to submit follow-up questions in writing to the
witnesses should coordinate with majority staff within the
requisite time.
Without objection, this hearing is adjourned.
[The prepared statement of Mr. Altmire folows:]
Prepared Statement of Hon. Jason Altmire, a Representative in Congress
From the State of Pennsylvania
Thank you, Mr. Chairman, for holding this important hearing on the
financial barriers that students and their families confront trying to
pay for a college education.
In the current global economy earning a bachelors degree is
becoming a prerequisite for being able to find stable and rewarding
employment. However, just as earning a bachelors degree has become more
important than ever, going to college has become more expensive than
ever.
The rising cost of attending college is forcing millions of
students to graduate with massive amounts of debt and many more are
deciding to forego college altogether. The average student graduating
from college this year will have accumulated $19,000 in debt by
graduation day. I find this to be unacceptable.
The 110th Congress has already taken several important steps to
make college more affordable. This includes raising the maximum Pell
Grant award for the first time in four years and passing the College
Student Relief Act (H.R. 5) to reduce the interest rate on subsidized
student loans from 6.8% to 3.4% over the next five years.
These were critical first steps and I look forward to hearing more
about the next steps Congress can take to increase college
affordability for all students and their families.
Thank you again, Mr. Chairman, for holding this important hearing.
I yield back the balance of my time.
______
[Whereupon, at 3:15 p.m., the subcommittee was adjourned.]