[Senate Hearing 112-888]
[From the U.S. Government Publishing Office]
S. Hrg. 112-888
INNOVATIONS IN COLLEGE AFFORDABILITY
=======================================================================
HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
ON
EXAMINING INNOVATIONS IN COLLEGE AFFORDABILITY
__________
FEBRUARY 2, 2012
__________
Printed for the use of the Committee on Health, Education, Labor, and
Pensions
Available via the World Wide Web: http://www.gpo.gov/fdsys/
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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
TOM HARKIN, Iowa, Chairman
BARBARA A. MIKULSKI, Maryland MICHAEL B. ENZI, Wyoming
JEFF BINGAMAN, New Mexico LAMAR ALEXANDER, Tennessee
PATTY MURRAY, Washington RICHARD BURR, North Carolina
BERNARD SANDERS (I), Vermont JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, JR., Pennsylvania RAND PAUL, Kentucky
KAY R. HAGAN, North Carolina ORRIN G. HATCH, Utah
JEFF MERKLEY, Oregon JOHN McCAIN, Arizona
AL FRANKEN, Minnesota PAT ROBERTS, Kansas
MICHAEL F. BENNET, Colorado LISA MURKOWSKI, Alaska
SHELDON WHITEHOUSE, Rhode Island MARK KIRK, Illinois
RICHARD BLUMENTHAL, Connecticut
Daniel E. Smith, Staff Director, Chief Counsel
Pamela J. Smith, Deputy Staff Director
Frank Macchiarola, Republican Staff Director
(ii)
C O N T E N T S
__________
STATEMENTS
THURSDAY, FEBRUARY 2, 2012
Page
Committee Members
Harkin, Hon. Tom, Chairman, Committee on Health, Education,
Labor, and Pensions, opening statement......................... 1
Mikulski, Hon. Barbara A., a U.S. Senator from the State of
Maryland....................................................... 3
Burr, Hon. Richard, a U.S. Senator from the State of North
Carolina....................................................... 4
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming.. 6
Murray, Hon. Patty, a U.S. Senator from the State of Washington.. 22
Alexander, Hon. Lamar, a U.S. Senator from the State of Tennessee 23
Bennet, Hon. Michael F., a U.S. Senator from the State of
Colorado....................................................... 24
Franken, Hon. Al, a U.S. Senator from the State of Minnesota..... 27
Merkley, Hon. Jeff, a U.S. Senator from the State of Oregon...... 28
Witness--Panel I
Kanter, Martha, Under Secretary, U.S. Department of Education,
Washington, DC................................................. 7
Prepared statement........................................... 11
Witnesses--Panel II
Carey, Kevin, Education Policy Director, Education Sector,
Washington, DC................................................. 31
Prepared statement........................................... 33
Quillen, Carol E., President, Davidson College, Davidson, NC..... 38
Prepared statement........................................... 39
Mendenhall, Robert, W., Ph.D., President, Western Governors
University, Salt Lake City, UT................................. 45
Prepared statement........................................... 46
Earl, Charles N., M.A., B.A., Executive Director, Washington
State Board for Community and Technical Colleges, Olympia, WA.. 49
Prepared statement........................................... 51
ADDITIONAL MATERIAL
Statements, articles, publications, letters, etc.:
Pennsylvania Association of Private School Administration
(PAPSA).................................................... 63
Response by Carol E. Quillen to questions of:
Senator Enzi............................................. 67
Senator Hagan............................................ 68
Senator Murray........................................... 69
Response by Robert W. Mendenhall, Ph.D. to questions of:
Senator Enzi............................................. 70
Senator Hagan............................................ 71
Senator Murray........................................... 71
Response by Charles N. Earl, M.A., B.A. to questions of:
Senator Enzi............................................. 73
Senator Hagan............................................ 75
Senator Murray........................................... 76
(iii)
INNOVATIONS IN COLLEGE AFFORDABILITY
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THURSDAY, FEBRUARY 2, 2012
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
The committee met, pursuant to notice, at 10:20 a.m. in
Room SD-430, Dirksen Senate Office Building, Hon. Tom Harkin,
chairman of the committee, presiding.
Present: Senators Harkin, Enzi, Mikulski, Alexander,
Murray, Burr, Merkley, Franken, and Bennet.
Opening Statement of Senator Harkin
The Chairman. Good morning, everyone. The Committee on
Health, Education, Labor, and Pensions will come to order.
Last weekend in Iowa, I toured the Blong Technology Center
where Eastern Iowa Community College partners with local
businesses to train people in specialities, such as advanced
welding and machining. It reminded me that today's global,
knowledge-based economy is largely driven by technology, and at
least some post-secondary education is no longer an option, but
a necessity. In order to qualify for a career that pays family
supporting wages and offers opportunities for advancement, an
education beyond high school is imperative.
Today, a worker with a bachelor's degree makes 85 percent
more, on average, than a high school graduate, and is 50
percent less likely to experience unemployment. Over the course
of a lifetime, a bachelor's degree holder will make about $1.6
million more than a high school graduate, again, on average,
and this gap is expected to grow even wider. Almost two-thirds
of the job vacancies between now and 2018 will require some
post-secondary education, and about half will require an
associate's degree or better.
The message here, I think, is very clear: a college degree
or some post-secondary technical training is the key to entry
into the middle class. Another message is equally clear:
America's economic competitiveness and growth depend on a
highly educated, highly skilled workforce.
But there is a problem: lack of affordability stands as a
major barrier to college access and success for both students
and workers seeking retraining. As college costs soar and
student loan debt burdens America's workers, a college
education is moving beyond the reach of millions of Americans,
especially those from lower and middle-income families.
Between 1992 and 2004, enrollment in 4-year colleges for
low-
income students fell from 54 percent down to just 40 percent.
During the same period, enrollment for moderate income students
fell from 59 percent down to 53 percent. This is a deeply
disturbing trend that we can no longer ignore.
It is also a shocking fact that student loan debt will soon
exceed $1 trillion and has surpassed credit card debt for the
first time ever. We must be much more aggressive in looking for
ways to address runaway tuition and fees, support students with
meaningful financial assistance, and provide incentives to
States and institutions to promote college affordability.
We all know there are no easy answers to this complex
problem. There are many cost drivers and misaligned incentives
in our system of higher education both on the supply and demand
sides of the equation. In our current difficult fiscal
environment, States are retrenching on their responsibility to
adequately fund public higher education, instead, shifting the
burden onto students and their families and, I might add, the
Federal Government. Institutions are faced with rising costs,
increasing demands, and a highly competitive marketplace for
students, faculty, resources, and research dollars.
However, I must also note that they are also often
competing for things unrelated to students' academic success
such as expensive dormitories and other facilities, athletic
programs, and rankings that are based on flawed methodologies.
Clearly, we need to do more to incentivize States and schools
to bring the net price of college under control.
For this reason, I did not want our first hearing on this
topic--and this is just the first hearing--to be a review of
the current troubling state of affairs. We all know the
problems. We know that costs have outpaced inflation over the
last 30 years. The cost of a 4-year college has tripled in real
terms over the past three decades while family incomes have not
grown at all. These are troubling figures. They have had a very
real impact on middle class America.
The aim of today's hearing is to move beyond just merely
acknowledging the severity of the problem, but begin to look
for promising ways of addressing this. We want to examine
innovative approaches and promising practices that can inform
our policy discussions on affordability. We need to examine how
technology can help cut costs, expand access, deliver quality
education. We need to take a closer look at initiatives that
lead to higher efficiencies without compromising quality, such
as dual enrollment programs and accelerated learning
opportunities.
As the composition of our higher education student body
changes, and as what we used to call ``nontraditional
students'' become an ever-growing share of the enrollment, we
need to learn more about colleges and universities that
successfully serve a diverse population, and yet still produce
solid outcomes.
To that end, I applaud the President's focus on making
college affordable and accessible for all students. I certainly
agree with him that we need bold action to address the
spiraling costs of higher education and to promote college
success. This is one of those issues that affect all Americans.
More broadly, I commend the President for his steadfast
commitment to rebuilding our economy and the middle class
through smart Federal investments in our Nation's most precious
resource: our human capital.
The President has recently elevated the issue of college
affordability on the agenda by proposing a set of innovative
steps that our Nation can take to strengthen our global
competitiveness and reclaim our leadership in higher education.
So appropriately, we will begin this hearing by learning
more about the Administration's efforts from the Under
Secretary of Education, Martha Kanter.
We will then move on to a second panel of distinguished
guests from higher education institutions, systems, and policy
organizations.
I look forward to working with our distinguished Ranking
Member, Senator Enzi, and my colleagues on both sides to ensure
that a college education remains within reach of all Americans
regardless of their background.
At this point, I will leave the record open for an opening
statement by Senator Enzi. He has been detained in traffic, but
I expect him to be here shortly.
Senator Mikulski, did you have anything that you wanted to
add to this?
Senator Mikulski.
Statement of Senator Mikulski
Senator Mikulski. First of all, Senator Harkin, I would
like to thank you and President Obama for putting not only
access to higher education on the front burner, which is
crucial to the future of our country and our citizens, but also
making affordability a front burner issue.
In my own home State of Maryland, the cost of higher
education is exploding. The fact that now, at the University of
Maryland, a wonderful land grant college where the Governor
himself has pledged to hold tuition down at one of our larger
campuses, it is more than $11,000 a year, where you include
tuition, fees, room and board.
If you go to our most prestigious university, Johns
Hopkins, it is well over $50,000 with the fees, the books, and
so on because the cost is not only the tuition, students and
families must account for the fees and the books, ET cetera.
Then when you go to our vibrant, independent college
network, again, whether it is Loyola, whether it is Washington
College, it is nearly $50,000. And yet, the president of
Washington College told me it costs $60,000 to educate a
student.
We cannot keep this going. I do not know about the rest of
you, but I'm stunned that the cost of an independent college in
Maryland is more than what my first home cost me. And in many
instances this is like a mortgage, that is what the young
people are doing is taking out a mortgage, and they do not know
if they are going to have equity or whether they are going to
have just an albatross of debt. We need to get to the bottom of
this and we need to work together on affordability.
I know that there are discreet sometimes unseen or
unthought of costs at the higher education level, which can be
owning and operating labs and facilities. Labs, whether you are
doing something for nursing education or something as
sophisticated as astronomy education, labs cost a lot.
Senator Lamar Alexander, the former president of the
University of Tennessee and the former Secretary of Education,
has often talked to me about the issue of Federal and other
regulations on colleges that raise the cost. He would like to
scrub the regs to see what do we need to keep for safety and
efficacy, but rid the regs from a bygone era.
And last, Senator Harkin, you outlined some great things. I
mean, what I see are athletic directors making more than
presidents of universities. What do we value? Are we going to
produce jocks? Are we the NFL farm team, the NBA farm team, or
are we interested in increasing graduation rates and producing
students? There are a lot of issues, and we look forward to
working with you.
I will conclude by saying the community college system
offers, also, a unique situation. In many instances, the
students are already older, they already have debt from other
aspects in their life, and in many instances they are not
prepared. We are using Pell grants to pay for the 13th year of
high school. I do not want to use Pell grants for the 13th year
of high school. I do not think that is a good use of the Pell
grants.
What I am interested in is what we can do about this. We do
not want a new debt bubble in higher education. We need to have
graduation rates at a much higher level because debt without a
degree perpetuatually indentures students and we need to look
at what we can do to help our students. But remember, we are
often using our Pell grants for our most needy students to pay
for what high school did not do for them. Well, that is not
what Pell grants are for.
We have to really work together, and I really want to thank
you for digging into this and want to be a partner with you.
Thank you. Senator Alexander, I want to start looking at the
regs and see what we can do to produce graduates.
The Chairman. Thank you. Thank you, Senator Mikulski.
Senator Burr, do you want to say anything?
Statement of Senator Burr
Senator Burr. Thank you, Mr. Chairman. I would not miss the
opportunity.
Mr. Chairman, I also would like to thank you for doing this
because I think education, higher education is one of the most
important components to the future success of the next
generation.
For most developing countries, every student who attends
higher education is a first generation student, and we are
still experiencing that in the United States of America. We
have a tendency to say anything that is wrong just needs the
Federal Government to fix it. I am not sure that is the case,
but we are going to continue to try.
Senator Mikulski has some tremendous institutions in
Maryland. Well, we have some good ones in North Carolina too.
We also have a rich history of subsidizing that education, and
for that reason, many institutions are affordable.
We produce the second largest pool of graduates of higher
education annually of any State in the country other than
California. It is the No. 1 magnet of attraction for economic
development. In North Carolina is the next generation of the
cream of the crop that we attract from public and private, 2-
year and 4-year.
My fear is that if we shift the responsibility to determine
what success or affordability is to Washington, we come up with
arbitrary thresholds that sound good, like graduation rates.
Well truthfully, if we walked out today and used that as the
determining factor, we would close just about every community
college because their graduation rate, if that is solely how
you check it, is low in comparison even to some of the for-
profit institutions that Senator Harkin has held numerous
hearings on.
I would suggest to you that higher education today is a
great example of how the marketplace works. Where students have
the ability to choose the institution they want to go to, price
comes into that.
Now, I am not going to sit on the panel and tell you that I
am not alarmed at the rising cost of higher education. But an
incredible process happens when something gets overpriced;
people choose to buy something else. In the case of education,
they choose to go somewhere else.
There are many great schools today that are struggling to
transform themselves because their student population has
dropped and somebody else has the students. I personally
believe that that is a better function for the marketplace to
go through than for us to choose that we will subsidize some
segment and not others.
I do not believe government's role is to pick winners and
losers. And if we pick it among the student population, we will
eventually affect the winners and the losers in the
institutions.
Being a college football player, I find it appalling also,
Senator Mikulski, that there are coaches that make more than
presidents. There are also presidents that make way too much
money at institutions, but I think for the most part, academic
budgets and athletic budgets are separated and they are funded
totally different. So unless we are here to talk about the
contributions that alumni make to their sports programs, that
is really not a relevant point other than we both agree that
the cost is too high.
I would think that the University of North Carolina would
tell you that the success of their basketball program, which
will probably win the national championship this year, probably
has an impact on the draw academically of who chooses to go to
the University of North Carolina Chapel Hill. So there is some
benefit to it, but I agree, it should not come with money
diverted or subsidized for athletics away from academics.
I hear the Chairman is anxious for me to finish. Since I
see the Ranking Member here, I will be happy to turn it over to
him.
I am anxious to hear what our witnesses have to say today.
Their successes to the cost of higher education around this
country that do not emanate from Washington, and I hope that
the members of this committee will explore those as well as the
proposals of the President. And at the end of the day, where it
is appropriate for us to have a role, I hope we play it, and I
hope we do it in a fiscally responsible way. I thank the Chair.
The Chairman. Thank you, Senator Burr.
We are joined by our Ranking Member, Senator Enzi.
Opening Statement of Senator Enzi
Senator Enzi. Thank you, Mr. Chairman. I apologize for
being late, but the National Prayer Breakfast ran a little bit
late today. And since you were mentioning athletics, the
closing prayer was by the Heisman Trophy winner from the
national championship team Alabama.
Senator Burr. And he is overpaid as well.
[Laughter.]
Senator Enzi. Well, so far, he is not paid, but I am sure
he will be paid well.
Senator Burr. He is in the SEC, he is paid.
[Laughter.]
Senator Enzi. Ooh.
Senator Mikulski. Umpire, umpire.
Senator Enzi. That is probably a different hearing, right?
But we have been going through a series of hearings on
college costs. They have all been focused on the for-profits,
and I asked at that time that we focus on all post-secondary
institutions because I thought there was a problem across the
board, not in the same way necessarily, but I think this is a
topic well worth looking into.
Higher education has become very expensive and it is
increasingly out of reach for many students. Tuition and fees
at public institutions increased at an astonishing 89.7 percent
last year, continuing a trend that has only accelerated over
the last 10 years.
I have a chart which shows that tuition has increased
faster than inflation, and even faster than healthcare over the
past 25 years.
The President recently made a series of ambitious proposals
he believes can begin reversing this trend, which I look
forward to hearing more about today. However, if we have
learned anything in recent years, it is that the Government
cannot solve this problem. Over the past 5 years, the Federal
Government has dramatically increased Pell grants' funding and
made Federal student loans more accessible, yet tuition
continues to rise even faster, and some say it is because of
the Federal money. If out of control tuition is going to
finally be brought under control, everyone is going to have to
make significant changes.
Fortunately, not everyone is waiting for an answer from
Washington. We will hear from three witnesses who have had
success controlling costs, while ensuring their students finish
school with a diploma. It is my hope that others will take note
of what they are doing and realize it is possible to keep
tuition down while providing a first rate, quality education.
However, as we continue this conversation, we must keep in
mind that today's student is far different than when we were in
school. As noted in a recent article posted by Education
Sector, which is represented at this hearing by Kevin Carey,
three facts sum up today's college students.
First, nontraditional students actually outnumber
traditional students. Out of 19 million students enrolled in
graduate or undergraduate institutions, only 7 million students
fit the traditional role of a student going straight from high
school to university.
Second, a large portion of students attend nonselective
schools and 43 percent of undergraduates attend community
colleges.
And third, many college students do not fall between the
ages of 17 and 24. Thirty-seven percent are 25 years or older;
and 61 percent of Pell grant recipients are independent
students. These students are the future of higher education and
increasingly, these are students that institutions and aid
programs find the most challenging to serve. We have to be
certain that whatever we do to address affordability meets the
needs of both traditional and nontraditional students.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Enzi.
We have two panels today. On the first panel, we welcome
Dr. Martha Kanter, Under Secretary for the U.S. Department of
Education, back to our committee; she's been here before.
Secretary Kanter oversees post-secondary education, adult and
career technical education, Federal student aid, and five White
House initiatives.
Prior to her position in the Administration, Secretary
Kanter served as chancellor of the Foothill-De Anza Community
College District in California, and is the first community
college leader to serve in the Under Secretary's position. We
appreciate her joining us today to talk about the proposal the
President is making to address college affordability.
Secretary Kanter, your statement will be made a part of the
record in its entirety. Welcome, and please proceed.
STATEMENT OF MARTHA KANTER, UNDER SECRETARY,
U.S. DEPARTMENT OF EDUCATION, WASHINGTON, DC
Ms. Kanter. Thank you very much.
Chairman Harkin, Ranking Member Enzi, and members of the
committee, thank you for having me here to testify on what can
be done to keep college affordable, an issue that is creating a
critical need for America to become the country that we all
want: an America built to last.
Recognizing that an affordable, high quality education is
fundamental to America's future, President Obama established a
bold goal for the United States to have the highest proportion
of college graduates in the world by the year 2020. Achieving
the President's goal is essential to ensuring the basic
survival of the American promise that if you work hard, you can
do well enough to raise a family, own a home as you have said,
and put enough away for retirement.
The facts are indisputable. Earning a college degree is the
clearest path to the American Dream, and the benefits and the
security of the middle class. It is a path to higher earnings
and reducing the likelihood of unemployment, as Chairman Harkin
noted. It opens doors and provides opportunities that just are
not there to those who only finish high school.
As president and chancellor of the Foothill-De Anza
Community College District for the past 16 years before joining
the Administration, I saw firsthand how post-secondary
education opened doors for thousands of students to better jobs
and a more secure future.
I know many of you on this committee have heard similar
stories from your constituents and even from your own families.
That is why I am confident that we are all on the same page
when we talk about these issues as a shared responsibility, as
Senator Burr noted. The Government cannot do this alone. We
have got to share in this responsibility.
But while higher education has become an economic
imperative to our success on a national and, for me, on a
personal level and for many students, the President, the
Secretary, and I are concerned that without immediate action,
the price of higher education, as you all noted, will make it
an unaffordable luxury for too many students.
For many students today, in fact, nearly half of all
undergraduates affording college means starting a post-
secondary education at a community college which is often a
less expensive alternative to a traditional 4-year institution,
as you have noted.
But I can tell you that even with its more affordable
price, at the Foothill-De Anza Community College District where
I came from, over 41 percent of our students received some form
of financial aid, many of these students living below the
poverty line. Those students were able to earn degrees, which
enabled them to become the nurses that cared for us at Stanford
or El Camino Hospital, the automotive technicians that fixed
our increasingly high tech cars, the bioinformatics technicians
who contributed to the growing biotech industry in Silicon
Valley and we have noted in North Carolina, the same is true,
and look at Connecticut and other parts of the country where
this is starting to bloom. Home health aids, fiber security
technicians, these are just a few of the many careers that
higher education is preparing students to enter.
Over the last 3 years, we have come a long way with your
help to address the challenge of making some progress to keep
college affordable and accessible. With your help, we have
doubled funding for Pell grants, created the American
Opportunity Tax Credit to provide up to $10,000 to help pay for
college, and helped ease the burden on students in repaying
their college loans.
Our investments are working. The average price students and
families actually pay, that is the net price, to attend a 4-
year public institution have increased by just $170 since 2006.
At community colleges, the average price students actually paid
decreased by $840 over the same period. That is on a national
level, but if you look at individual institutions across the
country, some tuitions have skyrocketed, as you have noted, and
some have remained stable.
We need to recognize that all of us--the Federal
Government, Congress, States, institutions, and families--all
have a shared responsibility to do our part to keep college
affordable. The Federal Government cannot do this alone, as you
have all said. That is why last week, President Obama unveiled
new reforms that will promote shared responsibility to address
the college affordability challenge.
On our end, we look forward to working with you to increase
our commitment to student aid, and to make sure taxpayer
dollars are well spent.
For States, we need them to prioritize higher education
funding and pursue policies that encourage long-term
affordability, and colleges need to tighten their belt too. The
Federal Government cannot singlehandedly ensure college access,
affordability, or quality. States play a much larger role in
college affordability and quality than just providing funds.
State policies, or the lack of those policies, on high school
graduation and college admission standards, credit transfer,
articulation, and tuition setting all can contribute to rising
costs.
Today, the typical bachelor's degree recipient completes
his or her program in 5 years instead of 4. It is also taking
longer for community colleges. If we could get more college
graduates to complete their degree and certificate programs on
time, if not earlier, America could help reduce total tuition
by one-fifth for a large number of students. But when they
cannot get the classes they need because of State budget cuts,
or they cannot transfer credits, it takes longer. They lose and
our Nation loses.
The good news is that a number of States are addressing
these issues head on. However, we have yet to see this level of
reform activity on a national scale that would have States
pursue foundational reforms to improve college affordability
and quality over the long term.
That is why we are proposing a Race to the Top for college
affordability and completion framework to spur State reforms
that will reduce costs for students and promote success in
higher education. This program would incorporate the important
principles of Race to the Top, systemic reform and stakeholder
engagement. It will not, however, be a replica of the K-12
competition. Rather, it will reflect the uniqueness and
diversity of American higher education.
All institutions of higher education, even those that do
not set their tuition levels independently, have an important
role to play in keeping college affordable and providing
greater value. To do this, they must embrace the same culture
of experimentation and innovation that we see in the research
universities, and apply it to student learning and success,
identifying ways to increase quality, while reducing costs.
But we recognize that innovations are tough to implement
and evaluate. That is why we are proposing $55 million for a
First in the World fund. This program will improve higher
education by investing in applied research at colleges and
universities. It will help scale innovative and effective
strategies to boost college completion and enhance quality.
At the same time, we need to be smarter about the dollars
that we invest directly in institutions. That is why we are
proposing to reform the campus based aid programs to recognize
colleges that are succeeding in doing their part to keep
college affordable, while providing good value to students
especially those from low-income backgrounds.
Further, we need to empower families and students with
better, clearer information to help them make good decisions
when searching for and selecting a college. To do this, we will
create a College Scorecard for all degree granting institutions
that will make it easier for students and family to choose a
college that is consistent with their educational goals, career
aspirations, and best suited to their financial needs. A draft
of the Scorecard is available for public comment on the White
House Web site, and we look forward to hearing your input.
Let me conclude by circling back to what I said at the
onset. College affordability is an issue that is critical for
creating an America that is built to last. An America that is
better off because of the contributions of our students, the
contributions they will make as they live, work, and contribute
to society.
Students that I had at my college, like Sandra Lui, a
veteran of Operation Enduring Freedom and Operation Iraqi
Freedom, the eldest of four children in a first generation
family who immigrated from Burma in 1991, and struggled in a
one-room apartment with four children. Sandra served our
country for 5 years in the Navy and after completing her tour
of duty, went to college. She completed her studies at the
University of California San Diego, and now works as a chemical
engineer in Michigan.
Or the story of Emanuel Maverakis, who grew up in Los
Angeles in a neighborhood that was grappling with poverty, and
his dream was always to attend UCLA. After De Anza College, he
transferred to UCLA where he graduated summa cum laude in
microbiology and molecular genetics. He then went on to
graduate from the Harvard Medical School summa cum laude. The
first-ever student from an underrepresented group to do so, and
indeed, only 1 of 16 summa cum laude graduates in the 230-year
history of the Harvard Medical School.
These stories and thousands more, many I heard on Tuesday
at the University of Maryland Medical Campus are what I carry
with me every day. But I also carry too many stories of
students who did not complete their college education. The
support of the State, the Federal Government, the colleges
themselves, and the students contributed to the success of
these students who do graduate. Together, we can slow the
growth in college costs, but to do so, we must incentivize
State support for higher education.
We must reduce inefficiencies in our education pipeline. We
must promote applied research that expands higher education
capacity while also improving student outcomes. We must direct
campus-based aid to colleges that provide good value. And
finally, we must empower consumers to channel their demand
toward the most valuable options for them.
Mr. Chairman, Ranking Member Enzi, and members of the
committee, more students and families than ever are seeking
post-secondary education and relying on student aid to do so.
If we are to reach the President's goal of leading the world in
college attainment, we need to continue our investment in these
students. But to keep the American promise alive, we must also
embark on a more comprehensive approach to shared
responsibility for higher education access, affordability, and
quality.
We need to ensure that everyone, States and institutions of
higher education, as well as Congress and the Administration,
are doing their part to constrain college costs, provide value,
and increase college completion.
As the President has said, ``In today's global economy, a
college education is no longer just a luxury for some, but
rather, an economic imperative for all.'' Our administration
stands ready to work with members of this committee on
legislation that will implement the President's proposals that
I have talked about this morning. We also look forward to
working with States, colleges, and stakeholders on this
important agenda.
I would be happy to answer any questions you have, and
thank you for the opportunity to provide these remarks this
morning.
[The prepared statement of Dr. Kanter follows:]
Prepared Statement of Martha Kanter
Mr. Chairman and members of the committee, thank you for inviting
me to testify on the issue of college affordability--an issue that is
critical to creating an America that is built to last.
Recognizing that an affordable, high-quality college education is
fundamental to America's future, President Obama established a bold
goal for our Nation: for the United States to have the highest
proportion of college graduates in the world by 2020. The President,
the Secretary, and I deeply believe that achieving this goal is vital
if our Nation is to prosper in a global economy that is predicated on
knowledge and innovation.
Achieving the President's goal is essential to ensuring that all
our citizens share in the economic and social prosperity of our Nation.
Earning a college degree is the clearest path to the American dream and
the benefits and security of the middle class. The facts are
indisputable. College graduates not only earn substantially higher
salaries than those without degrees, but they are much less likely to
experience unemployment. The unemployment rate for college graduates is
half that of those with only a high school diploma. And the difference
in earnings is growing. Bureau of Labor Statistics data show that high
school graduates in 1979 earned about 72 cents for every dollar that
bachelor's degree holders did; today they earn just 55 cents. In fact,
the disparity today between weekly earnings for bachelor's degree
holders and high school graduates is greater than both the gender and
racial pay gaps.\1\
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\1\ http://www.bls.gov/news.release/wkyeng.t09.htm.
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The challenge before us is great. Estimates from the Georgetown
Center on Education and the Workforce show that we are projected to
produce 3 million fewer college graduates than are needed by our
economy within the next decade--a gap that could make it hard for
American employers to fill high-skill positions. Worse yet, this gap
will hamper innovations and advancements that could open up new
industries and sources of future jobs. But we can change this if we act
now. By adding an additional 20 million postsecondary-educated workers
over the next 15 years, our national level of educational attainment
would be comparable to the best-educated nations, help us meet the
economy's need for innovation, and reverse the growth of income
inequality, according to the Center.
In his recent State of the Union address, the President called for
a comprehensive approach to tackling rising college costs. He believes
that we have a shared responsibility to confront the college
affordability challenge head on, and that college affordability has
never been more important than it is now at this critical make or break
moment for the middle class. What's at stake here, he emphasized, is
the very survival of the basic American promise that if you work hard,
you can do well enough to raise a family, own a home, and put enough
away for retirement.
President Obama is calling for new reforms that will promote shared
responsibility to address the college affordability challenge. States
need to do their part to prioritize higher education funding, and
colleges should tighten their belts too. If these proposals are passed,
this will be the first time in history that the Federal Government has
tied Federal campus aid to colleges to responsible campus tuition
policies.
That is why this Administration has worked with Congress and taken
a number of steps over the last 3 years to address the challenge of
helping to keep college affordable and accessible:
We have invested more than $40 billion in Pell grants,
extending aid to 3 million more college students (over 9 million total)
and raising the maximum award to an estimated $5,635 for the 2013-14
academic year--a $905 increase since 2008. As you know, most of that
investment was paid for by increasing efficiency in our student loan
program.
We are working to make college loans more affordable
through the ``Pay as You Earn'' proposal, which enables an additional
1.6 million students to take advantage of a new option to cap student
loan payments at 10 percent of a borrower's monthly income starting as
early as this year.
We have created the American Opportunity Tax Credit, which
provides up to $10,000 for up to 4 years of education. Over 9 million
middle class and low-
income families claimed the credit last year.
This historic investment in student aid has kept the price that
families actually pay for college--the net price--essentially flat over
the last few years. Thanks to our Federal investments, the net price of
4-year public institutions has increased by just $170 since the 2006-7
academic year, while the net price of attending a community college has
actually decreased by $840 over the same period.
But this path is not fiscally sustainable. The Federal Government
cannot single-handedly ensure college affordability while ensuring
quality and promoting college access and success. The Administration,
Congress, post-secondary institutions, and, most importantly, States
must all work together to keep building on our momentum in recent years
to make an affordable college education available to all students who
want one. That is why the President laid out a framework to address
college affordability last Friday, one that recognizes this shared
responsibility.
The Obama administration will fight to preserve student access and
increase student aid, especially the maximum Federal Pell grant award,
which will be $5,635 for the 2013-14 academic year. We urge Congress to
take action this year to keep the Pell program on firm financial
footing going forward. Working with stakeholders, we can and must make
the difficult choices needed to ensure the long-term stability of this
vital program.
We have also called on Congress to make permanent the American
Opportunity Tax Credit; double the number of work-study jobs available
within 5 years; and prevent a statutory doubling of the interest rate
on subsidized Stafford student loans for 7.4 million borrowers at a
time when the economy is slowly recovering from the recession and
students are taking on increasing amounts of debt to earn their college
degrees.
States need to do their part in this shared responsibility as well.
Last year, based on total State support, including one-time Federal
stimulus dollars, 41 States cut their funding for higher education.\2\
At a time when higher education is more important than ever for our
shared future, States should not turn to higher education as a major
source for cuts whenever times get tough. Such cuts lead to tuition
spikes and higher dropout rates. Neither Federal nor State budget
challenges should be borne on the backs of students and families in the
form of higher college costs.
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\2\ http://grapevine.illinoisstate.edu/tables/FY12/Table%201.xlsx.
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race to the top--college affordability and completion
States play a much larger role in college affordability and quality
than just providing funds. State policies--or the lack of those
policies--on high school graduation and admission standards, credit
transfer, articulation and tuition setting--can contribute to rising
costs. Today, the median bachelor's degree recipient completes his or
her post-secondary education program in 5 years, instead of 4. If we
could get more college graduates to complete their degree programs on
time, if not early, we could reduce college costs by one-fifth.
The good news is that a number of States are addressing these
issues. They are revisiting how they allocate funds to better recognize
quality and results; they are developing data systems to better track
outcomes; and they are taking the tough steps to address the high rates
of remediation due to students arriving at college who are
underprepared to succeed.
However, we have yet to see activities on a national scale that
encourage States to pursue foundational reforms that address the issues
of affordability and quality over the long term.
That is why we are proposing a Race to the Top--College
Affordability and Completion framework that will spur State reforms to
reduce costs for students and promote success in higher education. This
program would provide incentives for States to make commitments to
higher education and pursue policies with long-term payoffs, such as:
Revamping the structure of State financing for higher
education to recognize and reward quality and student success.
Aligning entry and exit standards with K-12 education,
community colleges, and universities to facilitate on-time completion.
Maintaining consistent financial support for higher
education.
establish a first in the world competition
All institutions of higher education--even those that don't set
their tuition levels independently--have an important role to play in
keeping college affordable and providing greater value. To do this,
they must embrace the same culture of experimentation and innovation
that they bring to their research and apply it to student learning and
success. They need to recognize that there are ways to increase quality
while reducing costs.
But we recognize that innovations are tough to implement and
evaluate. That is why we are proposing $55 million for a First in the
World fund. This program will improve higher education by investing $55
million in applied research to enable institutions of higher education
and nonprofit organizations to develop, validate, or scale up
innovative and effective strategies that boost completion rates of
students and enhance quality education on campuses. This initiative
would provide startup funding for individual colleges, including
private colleges, for applied research projects that could lead to
long-term innovations--such as course redesign through the improved use
of technology, early college preparation activities to lessen the need
for remediation, competency-based approaches to gaining college credit,
and other ideas aimed at better student outcomes. A portion of this
funding would go toward Minority Serving Institutions (MSIs). MSIs
educate a significant share of our Nation's minority students; making
sure these students are able to access and complete degrees is critical
to our Nation's ability to reach the 2020 college completion goal.
reforming campus-based student aid
At the same time, we need to be smarter about the dollars that we
invest directly in institutions. That is why we are proposing to reform
the campus-based aid programs to recognize colleges that are succeeding
in doing their part in keeping costs low, while providing good value to
students, especially those from low-income backgrounds.
The campus-based aid that the Federal Government provides to
colleges through Federal Supplemental Educational Opportunity Grants
(SEOG), Federal Perkins loans, and Federal Work Study, is distributed
under an antiquated formula that rewards colleges for longevity, and
provides perverse incentive to raise tuition, because it results in
higher levels of financial need among students, a factor considered in
allocations. The President is proposing to change how those funds are
distributed by implementing an improved formula that shifts aid from
schools with rising tuition to those who are focused on setting
responsible tuition policy, providing good value in educating their
students, and ensuring that higher numbers of low-income students
complete their degrees and certificates. The President is also
proposing to increase the amount of campus-based aid to $10 billion
annually. The increase is primarily driven by an expansion of loans in
a revamped Federal Perkins Loan program--which is expected to come at
no net taxpayer cost.
better information for students and families
Finally, we need to empower families and students with better,
clearer information to help them make good decisions when searching
for, and selecting a college. To do this, we will create a College
Scorecard for all degree-granting institutions that will make it easier
for students and families to choose a college that is best suited to
their financial needs, and consistent with their educational goals and
career aspirations. A draft of the Scorecard is available for public
comment on the White House Web site.\3\
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\3\ http://www.whitehouse.gov/issues/education/scorecard.
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conclusion
If we can incentivize State support; reduce inefficiencies in our
K-12 and higher education pipeline in aligning education standards;
promote applied research that expands capacity or supply while also
improving student outcomes; direct campus-based aid to colleges
providing the best value; and empower consumers to channel their demand
toward the most valuable options for them, we can slow the growth in
college costs. Mr. Chairman, and members of the committee, more
students and families than ever are relying on student aid, and if we
are to reach the President's goal of leading the world in college
attainment, we need to continue our investment in these students. But
to keep the American promise alive, we must also embark on a more
comprehensive approach to share responsibility and ensure that
everyone--States and schools, as well as Congress and the
Administration--are doing their part to rein in college costs and drive
forward college completion. As the President has said, in today's
global economy, a college education is no longer just a luxury for
some, but rather an economic imperative for all. The Federal
Government, States, and colleges and universities, must all work to
promote access and affordability by reining in college costs, providing
value for American families, and ensuring that America's students and
workers can obtain and complete the education and training they need.
America must have a workforce prepared for the jobs of the 21st century
and a society that will strengthen and preserve our democracy. Our
Administration stands ready to work with members of this committee on
legislation that will implement the President's proposals discussed
this morning. We also look forward to working with States, colleges,
and stakeholders on this important agenda.
I would be happy to answer any questions you might have. Thank you.
The Chairman. Thank you very much, Secretary Kanter. We
will now start a round of 5-minute questions.
Secretary, as I said and as you also said States must do
their part. We have seen a significant shift of the burden from
States' budgets, to students and their families, and it is
shifting more to the Federal Government to pick up that loss of
revenue from States.
Can you describe some of the systemic reforms that this
Race to the Top proposal would encourage so that States would
live up to their role of having shared responsibility?
Ms. Kanter. Yes, I would be happy to. The Race to the Top,
as we envision it, is going to provide a framework that will
spur reforms to keep tuition growth down in the short term, and
support changes in the long term to improve higher education
affordability, quality, and capacity in the long run.
This first year request is $1 billion, but this is really
about a multiyear effort which is aimed at improving higher
education, affordability, and value. We are really excited that
the Administration has made historic investments in student
aid, and that has kept the price that families actually pay in
the public institutions stable over the past few years, as I
mentioned. And net price versus sticker price is just something
that we have to remember to keep in mind.
But the current path is not fiscally sustainable, so we
need Congress and the schools themselves and States, to work
together to share the responsibility. So this model would
actually leverage a modest amount of Federal dollars to enact
large scale change. It would work upon the lessons learned from
the Race to the Top that we have already offered. And it
requires up front reforms and commitments from States in
exchange for funding.
The Chairman. You say you are proposing $1 billion for this
program. Would this also include more funds, for example, for
work-study programs, more money for Perkins loans from the
Federal Government to schools that have kept their costs down
or their increase in tuition, say, to the level of inflation?
Ms. Kanter. We have proposals which are First in the World,
which I talked about, funds that would inspire innovation in
the institutions themselves. Race to the Top that is designed
to address what we hope that States will do, the activities
that some of you mentioned of States that can do a lot more on
cost. Campus-based aid, Federal aid that would be designed to
reward institutions that are providing good value, and getting
students through college, earning their certificates, earning
their degrees, and providing the work-study for students to do
just that. We know that work-study is allowing students more
often to persist in college. It is essential for success and we
want to do more of that. Finally, as I mentioned, the College
Scorecard is the last part.
There are four parts to this proposal. One directed at
States, institutions themselves, students and families with the
Scorecard. I think we can do a lot better getting simple
information collected so that students and families can make
those choices that best fit their needs, their academic
aspirations, and their financial situations.
The Chairman. Yes.
Ms. Kanter. Then the last part is the campus-based aid,
which would be more and more directed to better and better
colleges and universities. We want them to give out that money
through work-study or through supplemental educational
opportunity grants to institutions that are providing good
value to families. You know, we have over 6,000 colleges and
universities, and we can all do better.
The Chairman. When will this committee get some paper on
this that puts some meat on this proposal?
Ms. Kanter. We are looking forward to getting the budget on
February 13, and we will have a lot more details then.
I know I can tell you on Race to the Top, there is a
tremendous need, I think, as you have all said. We are paying
too much for the remedial needs of students coming from high
school. That is about a third of the students over the next 10,
20 years that will be graduating from college. We have many
Americans that are adults that want a college education for a
variety of reasons.
But we are hoping to use Race to the Top also to better
align the K-12 exit standards with the entrance standards for
college. We want those freshmen to be ready for college level
work so that they can get through. That is another barrier,
that whole remedial challenge that we need to address.
Also, driving the use of data to improve policy; we need to
do a much better job not only using the data we have, but
improving the data we have. And letting teachers and students
just like in the other institutions we have across the country
use that data to do a better job to get those students through.
In addition, and I think you will hear from some of the
other panelists, the actual State policies, the transfer
policies, the legitimacy of accepting credit from one
institution at the next institution. That can be streamlined by
helping institutions and States work together on those kinds of
policies.
The Chairman. Thank you, Secretary. Senator Enzi.
Senator Enzi. Thank you, Mr. Chairman.
I want to followup a little bit on your question, because
you asked when the paper was going to get here, not when the
budget was going to get here. There is a significant difference
because for the last 3 years, any changes made to Federal
student aid has been done through appropriations or the budget
process. And because it did not come through this committee,
there have been a lot of ad hoc changes that we have had to
make to correct problems that, I think, could have been avoided
if they had come through committee.
I am hoping that there is not a plan to circumvent this
committee, because this is where a lot of the knowledge is of
how it actually does work, and we think we can prevent some of
those unintended consequences that just come from budget and
appropriation. Although I serve on the Budget Committee and it
has not been there for the last couple of years either.
So are you going to provide us with some actual legislation
that we can do in these areas or just rely on appropriations?
Ms. Kanter. We look forward to working with members on the
committee of the best way to propose this. It may be
legislation. Obviously, we will be back to this committee and I
will have to get back to you on the specifics, but legislation
has not been introduced yet. But we look forward to all of
these proposals moving forward in the best possible way and
that we would really like your input on that.
Senator Enzi. OK. I was hopeful from the President's speech
that some of that had been prepared already.
Now there is a scheduled 3.4 percent increase in interest
rates on Federal student loans, and the Congressional Budget
Office has given us a preliminary estimate that that would cost
about $2.4 billion this year and that accumulates if it goes
beyond this year.
I am interested in how long that delay is proposed. You
have mentioned a couple of billion dollars here and a billion
dollars there. I was wondering if you had some suggestions on
where that money was going to come from.
Ms. Kanter. Yes. Our budget is going to be released, as I
said, as you know, on February 13. The President is firm in his
commitment to education funding including the higher education
funding on both the discretionary and the mandatory sides of
the budget.
We are looking forward to a proposal that will not cost
taxpayers more dollars. We will be funding these proposals, and
you will be able to look at that in the budget with a lot more
detail.
Senator Enzi. We are looking forward to it. I am on the
budget committee, and I am anxious to see where that is going
to come down.
We want to keep tuition down, but I noticed like in
California, they have had some significant reductions in State
support for the colleges. Is there going to be any provision in
there for when the States are not doing their part and driving
up the cost of the colleges? The colleges do not have any
control over that.
Ms. Kanter. I mean, that is exactly one of the pieces that
we hope could be walked through in designing a Race to the Top
that would be focused on college affordability and completion.
We cannot, as you know, restrict tuition increases. That is
not the role of government, but we want to look to the States
and provide innovation funding so they can look at the policies
that will really stabilize tuition in the long term.
We are proposing to promote and invest in colleges that
provide good value for students and taxpayers. Some of the
money is going to colleges, unfortunately, that are not
providing good value. We have a responsibility there. And to
assess value, we are proposing and what the President has said,
that we look at cost, we look at service especially to the most
needy and disadvantaged students, and outcomes like loan
repayment and college completion rates.
And you mentioned, I think, Senator Burr mentioned the
numbers and the efficacy of the numbers. To me, we have to do a
much better job with numbers, not rates. I know that in my own
campus, I watched those numbers. I looked at exactly how many
students needed remedial help, how many remedial classes I had
to offer as a community college president, how many remedial
classes I would offer as opposed to freshman English, which I
knew those students were going to go straight through. And it
was a real tragedy to have to make that decision, you know, how
many freshman English courses or freshman calculus courses
could we offer as opposed to how many remedial courses to get
students through?
One of the pieces of Race to the Top is going to look at
those barriers whether they are policy barriers in
articulation, in transfer, in curricular design and what is
offered. But we really also need to rely on the colleges, on
the colleges and universities, to tackle remediation in a much
more innovative way than we have done in my 40-year history as
a teacher. You know, a long time, I started out teaching
English in an alternative high school.
I think with this proposal, we are looking at not only what
States can do, what institutions can do, what we can do to help
consumers make good choices about value and, of course, looking
at the campus aid, looking at Pell grants. We do not want to
give Pell grants. I did not want my students to be using up
Pell grants because they were so far behind in the basic skills
that they should have gotten somewhere else, or they could get
faster with more innovative curricular redesign.
We have a lot of models across the country. We have States
that are starting to make some progress. We have great
institutions, what I call ``Islands of Excellence,'' all over
the country where I can pick up. They are doing remediation
much better than College B. Why can't we transfer those? Part
of what we want to do with this fund is look at what is working
well in the country, and be able to help others take advantage
of that. I think every educator in the country is concerned
about that.
As a teacher, that is what I worried about all the time.
How many of my students were getting through? What was the
number? How many were going through to get a certificate
whether it was a home health aide, or a nurse, or going on to
be a doctor? That is what we want everyone to think about and
really cleanup the pipeline that has so many logjams in it.
Senator Enzi. We are hoping, of course, that the high
schools will pick up some of the slack on this so that it sends
kids prepared for college, and there is not that remediation.
My time has expired.
The Chairman. Thanks, Senator.
Senator Mikulski.
Senator Mikulski. Thank you very much.
Miss Kanter, you have an excellent reputation coming from
being the chancellor of one of the largest community college
systems is in the United States. I think it was with the 45,000
students in your system. And you said a lot here today in terms
of goals. But I need actionable steps. I need a must-do list.
Like what are the three to five things you can do this year?
I am going to come back to something raised by my
colleagues when we were reauthorizing higher ed, Senator Enzi
and particularly Senator Alexander, the whole issue of
regulation. Have you, and we had a commitment which I think
would be good to get back to, Senator Alexander, that we were
going to, on a bipartisan basis, look at regulation. Because we
are concerned that over regulation leads to strangulation of
innovation at higher ed, where the money goes into regulatory
compliance rather than helping the students, or holding costs
down, or helping faculty be even better at what they do.
My question to you is, No. 1, have you looked at this issue
of getting rid of increasing regulations? No. 2, have you
particularly talked to college presidents and others to say,
``Hey,'' you know, ``We've got this escalation going on.''
There are many reasons for it, but have they themselves told
you what we could do to deal with the issue of costs?
We have three issues: cost, price, and value. But let us
focus on cost. These old regulatory issues--and I want my
colleagues to know I remembered that, and this is a good time
to come back to it. But, what did the college presidents tell
you they could do?
Ms. Kanter. Yes. OK. I can tell you first that President
Obama has directed us to scrub all of our regulations and
eliminate those that just do not make sense anymore. And I
think you said, one of you said----
Senator Mikulski. That is what he told you to do a couple
of months ago. But what have you actually been given now?
Ms. Kanter. Right. We have been reaching out----
Senator Mikulski. We always have goals in the future but
what do we have to work with now.
The time is now. I believe in the power of now.
Ms. Kanter. Right. We have reached out. I personally have
talked to over a hundred college presidents in the last month
or so, maybe even longer. I have gone to a lot of association
meetings, reaching out, and asking specifically what can we get
rid of?
Senator Mikulski. And what did they say?
Ms. Kanter. One good example is the rulemaking now that we
are involved with, teacher preparation programs. How can we
improve teacher preparation programs?
One little example of many, and we have others going
forward, but one example is that we have 440 requirements that
schools of education have to fulfill for prospective teachers.
That is insane, frankly, and it is mostly input-oriented, not
output-oriented.
I think Senator Alexander was kind of smiling a little bit
and I go back to the 1980s, to the books Trudy Banta wrote from
the University of Tennessee about outcomes, and how can we be
more responsive to the kinds of outcomes that we want for great
teachers in every classroom? That is one of many examples.
We are in a rulemaking process now on student loans, what
can we eliminate? What is the bare minimum that we need? I
think we have done a lot. We have cut out a lot of questions on
the Federal student aid form. That is a good example of trying
to simplify bureaucracy that just seems to swell.
I think you have a champion in the Department of Education
in our Secretary Arne Duncan and myself. We need to change the
regulatory environment so that it works to get students
through. That has got to be the driver. It has got to be a
student-centered focus and then institutions need to do their
part. Certainly, every State is looking at regulations all the
time to try to see, can we simplify what States are doing, and
what role does the Federal Government have in that?
We will do everything we can. We are soliciting
recommendations from the higher education community. We are
reaching out constantly to ask them, ``What can we get rid
of?'' We have to go through a rulemaking process or other kinds
of things, like legislation. There are other levers of change
we have.
But we are very interested in what the University of
Maryland thinks, what the University of California thinks, what
the Lorain County Community College in Ohio thinks.
Senator Mikulski. I will jump back in, in my 19 seconds
left. We are proud of the University of Maryland, and I think
they are cited in other testimony, and we are proud of Governor
O'Malley taking the lead in this. However, I will come back.
So you actually have been looking at this, but now with the
college, just in three sentences. Hello. Three sentences. Did
the college presidents give a must-do list? I helped move the
reauthorization of higher ed. When Senator Kennedy was so sick,
I had the job of reauthorizing that bill. And I had no finer
partners than Senator Harkin, and Senator Enzi, and Senator
Alexander. We got the job done, but God.
I think there were 600 groups that wanted to come in and
talk to me. When these 600 groups brought comments, they all
had to be peer-reviewed and it just went on and on. What should
have been a very simple process particularly with the skill set
at the table, was cumbersome because everybody had opinions,
and everybody had other opinions. And there were more groups
talking about higher ed than there were colleges in the United
States of America. I am not kidding.
Now my question to you, I have been listening, you have
been great in describing all the processes that we are talking
about. But do you have a specific list that has come out of
this, right now, that you could talk with us about as we
consider legislation?
Ms. Kanter. Well, we are going to, you know----
Senator Mikulski. Do you have it?
Ms. Kanter. We have lots of ideas and proposals. We can
talk. I published, for example----
Senator Mikulski. Miss Kanter, I cannot have a long answer
here.
Ms. Kanter. OK.
Senator Mikulski. Harkin is banging the table quietly.
Ms. Kanter. In 1 minute, I can tell you we laid out seven
steps, seven areas or States that we think would improve
student graduation, student success, and add value. I can give
you that. It is called, ``The State Toolkit for College
Completion.''
We are now, I guess, on Monday had 50 or 100 researchers
and practitioners----
Senator Mikulski. OK. I got it. I got it. I do not mean to
be brusque, OK, but we have got it.
Senator Harkin, really, if we go back to the
reauthorization of higher ed, we worked so well together here
and I think we have many good ideas, but I think we need to
look at the regulatory framework as well. Thank you very much.
The Chairman. Thank you.
Senator Burr.
Senator Burr. Secretary Kanter, thank you so much for being
here and for a lifetime commitment to educating the next
generation, and the next generation, and the next generation.
And that is really what I want to try to emphasize. This is not
just about this year's rising seniors in high school.
You said in response to a question, and again reiterated in
your written statement talking about the current path that we
are on, and I quote, ``But this path is not fiscally
sustainable.''
Ms. Kanter. Right.
Senator Burr. And in the next paragraph of your testimony
you said,
``The Obama administration will fight to preserve
student access and increase student aid, especially the
maximum Pell grant awards, which will be $5,635 for the
2013-14 academic year. We urge Congress to take action
this year to keep the Pell grant on firm financial
footings going forward.''
Let me just ask you, in the budget process last year, we
reduced the number of years of eligibility for Pell from 8 to
6, would the administration be supportive of us reducing from 6
to some number under that so that the financial stability of
Pell was more intact, and that more students would have the
availability of Pell money?
Ms. Kanter. We think the reduction that has already been
made is going to produce, hopefully, a positive outcome. Many
students, the large bulk of students finish within 6 years, but
as you know, students are working while they go to college. The
whole idea of what a full-time, first-time student is without
other responsibilities is very different.
Senator Burr. So we have to----
Ms. Kanter. I personally do not want to see further
reductions to that. I think you have made the reductions.
Congress has acted. We would like to give students a chance to
see how that is a secure window, if we can focus with these
proposals, with Race to the Top, with First in the World, on
accelerating college completion in a shorter amount of time.
That is where the higher education community, all our colleges
and universities----
Senator Burr. Well, can I take from that that there would
be no State that would have restrictions suggested to them that
would move a student through higher education in shorter than 6
years?
Ms. Kanter. Well, we cannot----
Senator Burr. We are not going to penalize a State because
they hit 6 years versus 4 years.
Ms. Kanter. I mean, what we wanted to do is encourage
States to work with institutions of higher education to
actually help students accelerate their education.
Senator Burr. I know where Senator Mikulski was. There is a
big difference between suggesting and creating an incentive----
Ms. Kanter. Right.
Senator Burr. And wishing, and penalizing somebody for not
hitting it. Is the acceptable length of time now for college
graduation now 6 years?
Ms. Kanter. Yes.
Senator Burr. OK. You talked about Race to the Top and I am
asking specifically as it relates to North Carolina. We have a
rich history of a very high, if not the highest in the country,
subsidy to our public institutions. Now, that has begun to
become less. There are some States that do not subsidize their
public education. From the way I heard you describe this new
program, States will be encouraged to participate financially
to reform certain things, and if they do it, they will be
rewarded.
Now, if North Carolina chooses to accept some of the
reforms, whether we do them currently or not, but we are in a
decline in the level of subsidy that we are currently offering,
though it may be the highest in the country, is North Carolina
going to be penalized by not being able to participate because
we, for generations, have highly subsidized higher education?
Ms. Kanter. This is exactly why we are reaching out to all
of you and to the institutions themselves. What we want to do
is create momentum to provide good value.
Senator Burr. But that is a very specific question. Would
North Carolina under how you envision Race to the Top, would
they be penalized or excluded from participating because they
were declining the level of State subsidy, even if it was the
highest in the country?
Ms. Kanter. What we want to do is incentivize States to
actually provide better value. I have a number of States who
have already moved to stabilize tuition increases. I think New
York is the latest one that has said for the public
institutions in the State, we are going to only increase
tuition in the public institutions by a small amount over the
next few years. Maryland is another example.
I think if States are making efforts to actually put in
place what we hope would be a long-term policy, set of policy
proposals to stabilize tuition over time, I think that would be
of great benefit to the student.
Senator Burr. My time is running out. Let me just make this
comment, and again, this may be a North Carolina editorial.
Public education in North Carolina has been, is, and will
continue to be affordable in comparison to other States. Will
it live within some artificial increase percentage that we
choose by the Federal Government? I doubt it. We are penalized
because historically we have maintained an affordable level for
all students to attend.
I find it incredible that we might think of a program that
would exclude or create some type of penalty on a State that
has shown tremendous support and subsidy in the past because
they may pick up a little more than everybody else because they
have held it down so tight for so long. And I might add, it
concerns me about where North Carolina might head or any other
State that falls in that category.
But it also concerns me that we pick one tiny subset of
students and say,
``We are going to target you for lower interest rates
than everybody else from a standpoint of the
affordability of what the Federal Government is going
to provide to you for higher education.''
We have a long way to go in this debate, I realize that,
and I know you are constrained today as to how much you can
share prior to the budget.
Mr. Chairman, I am anxious for that budget to come out so
that all members can look at it. This committee has shown
tremendous bipartisan willingness in the past to look beyond
maybe the politics that could be in education and should not
be, and to make the right decisions. And I think Senator
Mikulski has said that.
I hope we will take our time. We will thoroughly look at
this issue, but at the end of the day, I just want to make a
statement to my colleagues. If the policies we propose penalize
those States or institutions that have lived by what we are
trying to set up for generations, and we are going to penalize
them for it, this is very, very wrong. It is not in the best
interest of the education of future generations.
I thank the Chair for his leniency.
The Chairman. Thanks, Senator.
Senator Murray.
Statement of Senator Murray
Senator Murray. Mr. Chairman, thank you so much for having
this really important hearing about the issue of affordability
in our college institutions.
We are hearing from so many people today, high school
students and families that are really worried that they are not
going to be able to be able to go on to continue their
education. I have talked to unemployed workers who really are
having trouble making ends meet today, and they know that they
need to get further training to be able to get the skills they
need to find a job. And all this comes at a time when post-
secondary education is even more important to getting a job in
the 21st century.
This is actually an issue that hits really close to home to
me because when I was growing up, my own family faced some very
tough times. My dad got sick and had to quit work, and my mom
went back to Lake Washington Voc Tech, so she could get a job,
and put food on the table. All six brothers and sisters of mine
were able to go to college because of Pell grants, and work-
study programs, and Federal support. And because we all got
that support, my mom and all my brothers and sisters--Federal
support--we all graduated, found jobs, and we were able to give
back to our community.
I think this is really an important concept that our
country was based on, and this hearing is very important, and I
am really glad that President Obama is focused on that, this
committee is focused on that.
I do have questions, but I want to submit them in writing
so that we can move to our second panel because I know we have
some very important testimony to come.
But thank you very much for having this hearing.
The Chairman. Thank you, Senator Murray.
Senator Alexander.
Statement of Senator Alexander
Senator Alexander. Thanks, Mr. Chairman and thank you for
having the hearing. And Miss Kanter, thank you for coming. I
want to thank Senator Mikulski for her offer to renew our
effort to work on finding appropriate ways to deregulate higher
education which, I think, is a real problem.
In listening, I have a suggestion. You know, I like it. I
am one Senator who likes the Race to the Top concept, but I
think you have it headed in the wrong direction. I think we
ought to have a Race to the Top competition among Federal
agencies to see if they come up with ways to find regulations
that stop adding mandates to States that increase the cost of
government, and reduce the amount of money available for
colleges and universities. I can think of two or three, and all
of them have to do with healthcare, which I really would rather
not bring up because that healthcare has been such a partisan
issue. But let me just use those as an example without trying
to be partisan.
For example, we have about $100 million, $116 million that
we loan to students this next year in the Federal Student Loan
Program. The Department of Education borrows it at 2.8 percent,
loans it to students at 6.8 percent. Where does that profit go?
That is about $4.5 billion a year.
Ms. Kanter. There is a difference between what the
Government pays to borrow money and the interest rate that is
paid by borrowers.
Senator Alexander. No, we know what it is.
Ms. Kanter. The Government's rate----
Senator Alexander. It borrows it at 2.8 percent and it
loans it to students at 6.8 percent. And does it not use that
$4 billion to help pay for the healthcare law, and to pay for
Pell grants for other students? So is not the Federal
Government, in effect, overcharging 16 million students across
the country on their student loans?
And is it not true that if you took that $4 billion and
applied it to the average student loan, that you could lower
the interest rate payment over 10 years by about $2,200? Would
not that be a better proposal to reduce the cost of going to
college?
Ms. Kanter. I do not think it is that simple.
Senator Alexander. I believe it is.
I mean, the difference between 2.8 and 6.8 is 4, and added
together----
Ms. Kanter. That is one small piece of the----
Senator Alexander. You have $116 billion that you have
loaned out and the Congressional Budget Office has said, in
effect, that if that money were spent, if the students were not
overcharged that the loans could, the interest on the loans
would be about $2,200 less over 10 years. But let me give you a
larger example.
In Federal legislation, we have required States, and I used
to be a Governor, we have required States not to reduce their
Medicaid spending. Now, I know what happens when Governors have
budgets like that and the economy is bad. You go through the
budget, and you try to allocate the money where it goes. You
are getting down toward the end, and you have really got a
choice between Medicaid spending and higher education. And what
happens? I am sure you saw this when you were a community
college president, the Governors say, ``Well, the Federal
Government has told us we have to spend more on Medicaid,'' and
so, there is less to spend on higher education.
Now, this is not a President Obama problem all alone. This
was going on 30 years ago and I fought that 30 years ago,
Governors have fought it for 30 years. But would it not be a
good idea for the Federal Government to begin to think of ways
not to add mandates to States that soak up the money that
States normally might use to go to the community college in
Maryland, or the University of Tennessee, or the State
institutions that are now suffering such large decreases?
Ms. Kanter. Yes, I mean, we want to work with you Senator
to do just that. I will say that, you know, other proposals----
Senator Alexander. Do you know the maintenance of effort
requirement that States have? That would be a good idea, I
think.
And to stop the mandate of the healthcare law that adds
$1.2 billion to the State government that is going to require
further reductions in higher education spending in Tennessee.
Are you saying you are willing to change that?
Ms. Kanter. No. I mean, what was interesting to me to look
at the maintenance of effort in a small program, the College
Access Challenge grants that you authorized that we are in Year
3 of was that only four States could not meet that maintenance
of effort requirement. So everybody was able to meet that and
better serve students. And we have seen in the Pell grant
program, we have moved from 6 million in 2009 to 9.4 million
today, students from the lowest income families in this country
enrolled in higher education.
Senator Alexander. My time is up, but I respectfully
suggest turning the Race to the Top around, heading it in the
direction of the Federal Government. Let us look for ways to
stop Washington from adding to State costs, that soak up
dollars, that raise tuitions in California, Tennessee, Wyoming,
and all of our other States. That is the real reason tuitions
have been going up. It is a problem here in Washington, not in
the States.
The Chairman. Thank you, Senator Alexander. And now, this
would be Senator Bennet.
Statement of Senator Bennet
Senator Bennet. Thank you, Mr. Chairman, and I apologize
for being late. We had a banking committee hearing and I want
to just say I cannot think of a topic more important than the
one that you have brought to our attention today, and it
strikes at the heart of our economy in the 21st century in an
incredibly profound way. The worst the unemployment rate ever
got for people in this recession, the worst recession since the
Great Depression, who had a college degree was 4.5 percent.
That was the worst it got for people that had a college degree.
We find ourselves in a place where only 9 out of 100 kids
born into poverty can expect to get a college degree. And when
the last president became president, we led the world in the
production of college graduates; we led the world. And just 10
or 12 years later, we are 16th in the world. At a time when we
have made it harder and harder and harder for people to go to
college and get a degree which they need more and more, the
rest of the world is figuring out that they need to move their
people along.
In Denver, thanks to the generosity of some wonderful
citizens there, we started something in 2005 called the Denver
Scholarship Foundation which said that any kid who is
graduating from the Denver public schools would have the gap
filled.
And the result of that, Mr. Chairman, is there are 30
percent more graduates of Denver public schools in college
today than there were in 2005, but this affordability problem
is making it harder and harder and harder to keep them there.
This is of such concern to me and to the people that I
represent that--actually, over the last month our Senate
office, that has no responsibility for this at all, has been
having college affordability discussions all over the State. We
have been walking people through the FAFSA process, the
scholarship process, trying to demonstrate to people what
options are available. Because to me, the hardest thing you can
hear anybody say is they cannot afford to send their kid to the
best school they got into and I have heard that time and time
again over the last 3 years. Everybody is saying it.
I wanted to just go in with Senator Mikulski and her
observation about the importance of working to diminish these
regulations that confront our institutions of higher ed and our
States.
You mentioned, Madam Secretary, the teacher preparation
programs, and I am very interested in this, as you know. You
said in that context that you think we ought to be more focused
on outputs than we are on inputs. I wholeheartedly agree with
that. But I wonder whether you are applying that philosophy
generally as you do this review. Are we going to get to a place
where we begin to focus on outputs again instead of
contributing to the problem that we are seeing in our States
and in our communities?
Ms. Kanter. Yes. I mean, I do think that the national
conversation is about value, and I think the more we can look
at it, and I think many people have said, when you look at
price and you look at quality, then you look at the value to
Americans. Are people getting the value that they are paying
for, with the effort that they are making, in the design of the
institutions we have, and can they get through?
I think on the affordability side, we have a lot to do to
help Americans understand that they can afford to go to
college. And we want States with our competitions and our
proposals, actually, I should say, to reduce regulation. I
mean, every teacher, every person who wants to become a
prospective teacher has to take a Myers-Briggs test. Now, I
took a Myers-Briggs test. I know what that is, but it should
not be a requirement because what we want is great teachers.
Senator Bennet. I never took it because I was scared to
find the results, but you are right. It is crazy.
Ms. Kanter. It is an example of a 20th century----
Senator Bennet. I do not have a fancy chart like that, but
here is what is happening to college tuition versus all this
other stuff over the last 10 years, and we have to get a hold
of it somehow. This is going to require partnership at the
State and local level where this work really gets done, the
Federal Government.
I wonder with the last few seconds that I have whether you
could tell us specifically whether there are States, or
communities, or foreign countries that have figured out how to
specifically deal with this affordability problem? Are there
specific examples that you have in mind that you wish we could
get to?
Ms. Kanter. One great example is the Tennessee Technology
Centers. If you look at Tennessee and you look at the success
of those Centers in preparing students for the workforce. It is
part of the 2-year college system where students are earning
certificates to go into the workforce, that is one example.
Courses are offered every day at set times, 5 days a week. It
is affordable. They have been able to maintain that
affordability. I can talk about Indiana. I can talk about
Maryland.
In freezing tuition in Maryland for the last 4 years has
been a tremendous boon to the residents of Maryland.
The I-BEST program in Washington State, that has been a
tremendous program where we are taking students at the adult
level, low-skilled adults, getting them trained up, and then
getting them ready for not only a career, but to continue their
college education.
I think, as I said in my testimony or I think I said it in
one of the questions, we have islands of excellence. We have
States, models within States, we have programs, institutions of
higher education leading the way in a variety of places.
Unfortunately, we have 50 States and 6,000 institutions of
higher education that have got to do better because the numbers
are not there. We are losing 50 percent of students.
As you said, when you look at those data, nationally we are
losing 50 percent of students over 6 years. We are wasting Pell
money because we are not doing a better job. This is America.
We should be able to fix the remediation problem. We should be
able to have the best institutions in the country providing
value so students do not have to repeat what they should have
got in high school. Or if they come in underprepared because it
is an immigrant family, and it is an adult incident, or it is a
low-skilled adult.
I went out to Macomb Community College and saw the closing
of a plant, the replacement of that plant with robotics, and
met so many low-skilled adults in their 40s and 50 s who were
not ready to transition to another career because they needed
higher level skills. In Washington State, there are programs,
the I-BEST I mentioned, that are going to address that, but it
is not available in many other States.
It is that kind of thing that we want to do with not only
Race to the Top, but the First in the World competition, and
the other proposals with campus-based aid and so on, giving
students more work-study. But providing value so ultimately, we
are going to have more students completing college in a shorter
amount of time with the highest quality education that this
country can provide and that those students deserve.
Senator Bennet. Thank you.
The Chairman. Thanks, Senator.
Senator Franken.
Statement of Senator Franken
Senator Franken. Thank you, Mr. Chairman, for starting this
very important discussion. I would like to associate myself
with Senator Murray and Senator Bennet's comments. I got here a
little late because I was in a judiciary executive meeting.
This is a central problem. As Senator Bennet said, we were
first only a few years ago in OECD countries in the percentage
of our population that had college degrees. And now we have
fallen to 16th. I remember hearing this during an ESEA hearing.
And all of this is, by the way to me, very holistic. I mean,
this really starts with early childhood because when you are
talking about paying the cost of kids coming in to college who
are not ready to go to college, that remediation costs money as
well.
But I remember that day and Senator Sanders asking Andreas
Schleicher from the OECD if one of the reasons that we are
losing ground on this compared to other countries is the cost
of college here. And Senator Sanders said, ``How much does it
cost to go to college in Germany? '' And Andreas Schleicher
said, ``Well, it's free.'' And Senator Sanders said, ``Well, I
imagine it is like that in other countries.'' And then he said,
``How much, for example, does it cost,'' this is what Senator
Sanders said, ``In Scandinavia? '' And Andreas Schleicher said,
``In Scandinavia, they pay you to go to college.''
I just had a meeting with MnSCU, with the Minnesota State
Colleges and Universities System and their costs have stayed
very stable per student. In fact, I think they have gone down,
but the expenses have gone up.
And at the same time, I talked to the student board and
these are students who serve on the boards of MnSCU. And I
asked them, ``How many of you work 10 hours, at least, a week?
'' All of them; 20, most of them; 30, a lot of them; 40, some
of them. That is no way to go to college to work 40 hours a
week and go to college, and no wonder it takes 6 years.
To answer Senator Burr about the Pell grants, my wife's
family had a similar experience to Senator Murray's. Her father
died when she was 18 months old, mom widowed at age 29 with
five kids. All four girls went to college on combinations of
Pell grants and scholarships. Pell grant at that time paid 77
percent of a public college education; today it pays 35
percent. This is something that is of such importance as I go
around in my State.
I just want to ask one specific question and like Senator
Murray, I will probably submit some others. Miss Kanter, the
Obama administration recently proposed a financial aid shopping
sheet in the form of a universal financial aid award letter.
This letter will allow students to accurately compare financial
aid packages, and will expose the practice of providing lots of
grants in the first year, without saying the student will
receive all those loans in later years to make it look like the
package is better than it is.
This letter will enable apples to apples price shopping,
but I understand you do not have statutory authority to require
colleges to do this. I would like to work with you to fix that.
What do you need from Congress to require all schools to use a
uniform financial award letter?
Ms. Kanter. We would need legislation that would do just
that and then we go put that in place. We would look forward to
working with you on that. That is part of the President's
proposal. We have got to simplify and make it easy for families
to compare that per value. They are looking for good quality,
they are looking for value, and they are looking at cost. Cost
and quality are really the two kinds of things that we want to
do. It is too difficult now for families to compare, and they
need their total package.
When I think of all of the things in here, whether the
students, the family is getting the American Opportunity Tax
Credit, whether the family has a direct loan, whether the
family qualifies for a Pell grant, whether the family could get
a Supplemental Education Opportunity Grant. Has the State cut
disproportionately State aid so that State grants are not as
available as they might have been the year before, or the year
before?
Campuses, I know, I talked to many college and university
presidents who are raising lots of money for scholarships,
adding that in. And all of those pieces need to be really made
available as options for families to look at to see what they
could qualify as a total package.
The Scorecard will make things simpler, will allow families
to compare from this college to that college. If I want to look
at the top five that I want my child to consider, or I am an
adult and just got laid off, and I have got to go back to
school, how can I really understand what choices I have? And
then, can I go back to what the President is calling the
College Scorecard to look at value?
And we look forward to working with Congress on this. We do
not have all the answers. I think that is pretty clear from my
testimony. The States have got to do their part. It is a shared
responsibility: colleges, universities, Congress, and
ourselves. We are really excited to work on these proposals and
figure out, we have got to do better as a country.
I think, Senator Bennet, when you hold up that chart, we
cannot be 16th anymore. We have so much talent in this country,
the students that I have lost over the years, the student
success stories. We can do this in every State. We are doing
it. I mean, we have the best institutions in the country, but
again as I said, we have 6,000 of them.
We have to give families the opportunity to go to those
places where they are going to get the greatest value, get
through in the shortest amount of time, to go ahead and
contribute, make their contributions to society as you all are
doing.
Senator Franken. I look forward to working with you on that
specific matter. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Merkley.
Statement of Senator Merkley
Senator Merkley. Thank you, Mr. Chair. And thank you for
your testimony and for your emphasis on affordability and value
in programming.
I sometimes feel like we are in the middle of these
conversations about, ``How do we tweak it here or there? '' And
perhaps we do not step back and see the view from 30,000 feet
and opinions may differ on what that view is. I believe we are
spending way too much money on foreign bases and foreign wars,
and not nearly enough on education and infrastructure, and that
we need to have that conversation as well.
One hundred and twenty billion dollars a year spent in
Afghanistan. What would a third of that buy in terms of
supporting the affordability of colleges across America?
Ms. Kanter. We would get many, many more people through
college. I mean, the investing in education and the shared
responsibility, what we are envisioning in something like a
Race to the Top for affordability and completion could be done
in every State. We would not have a competition. We could have
goals for every State, I mean, revenue like that.
I think we have all been, you know, the new normal has
really shaped, I think, everything we are talking about to a
limited view. But this is our country, so if we did have more
revenue, we would look to these kinds of proposals for the
kinds of things we want to do to focus more on how we can get
more value, and how everyone can play a role.
We have three researchers, Arne Duncan brought in three
researchers from the top schools in the country talking about
student effort. What can we do to help students feel that they
can achieve? That they believe in themselves, they have the
confidence to do the mathematics. I mean, for students to have
confidence in math that happens in K-12. Many students just get
shut out. They do not get called on enough. We see it as
systemic.
I think your comments about looking at early learning, a
third of children in this country are not ready for
kindergarten. Fourth grade reading levels have stayed stagnant
for 40 years. That is a comment from the Modern Language
Association of the country, and we have half of the students
not completing college in 6 years much less 5. And we know many
students have to work. I mean, you have talked about those
working students.
I had a class of nursing students. They raised their hands
at their graduation, 40 percent of them were working full-time
while they were getting their nursing degree. I mean, they were
on fire because they were studying and working literally 18
hours a day. I did not know how they slept. I truly did not for
the students that were working full-time.
I think if we were to be fortunate to end a war, these are
the kinds of dreams we would like to see. We need to get rid of
regulation that makes no sense anymore in the 21st century. But
it is all about outcomes, it is all about value, and it is all
about giving that American student an opportunity to do the
best that he or she can.
We have a lot of work. Carnegie Mellon, I will mention, the
work in learning sciences and analytics. We have seen courses
that have accelerated student learning and success. Why
everyone in this country cannot read and we cannot really
tackle that literacy problem and use the revenue to do that to
promote better research and education. I mean, it is a long
laundry list.
Senator Merkley. I will interrupt you right there, if I
might.
Ms. Kanter. Sure.
Senator Merkley. My time will soon be gone. But as I looked
at the Administration's plan, I see a $6 billion per year cost
for keeping the interest rates lower. And I see $1 billion for
Race to the Top, so that makes $7 billion, and then
miscellaneous other things. But really, we are talking about a
$7 billion plan roughly. Is that correct?
Ms. Kanter. I think our figures for keeping the interest
rate at 3.4 percent, I think our figures are $4.5 billion. The
Race to the Top would be $1 billion a year, yes and those
dollars, you know, we will be releasing the budget on February
13.
Senator Merkley. All right, to my point then, in the
ballpark of a $6 billion plan. That is less than the numbers I
had before me. I just want to emphasize the contrast that if a
third of the savings in Afghanistan were directed toward
education that would be $40 billion that would be completely
beyond the proposal you are putting forward.
This is why I want to re-emphasize this point that we must
make choices as a nation, and that we are systematically
undermining our investment in our intellectual infrastructure
and our physical infrastructure. We are weakening this Nation
and we have to have the conversation, or we are just fiddling
around the edges. My time is now expired.
I appreciate very much the proposal you are putting
forward; appreciate it a great deal. I hope the Department of
Education and the President's team will start to talk in terms
of the grand challenge facing America if we continue to fall
behind other nations in the world are we imperiling the success
of our children. We are imperiling the success of our future
economy. We are making this Nation weaker and it is wrong for
our families and wrong for our Nation.
Thank you.
The Chairman. Thank you, Senator Merkley. Dr. Kanter, thank
you very, very much. We will now turn to our second panel.
Ms. Kanter. Thank you.
The Chairman. I am sorry we are losing some Senators,
because the second panel, I read their testimony last night,
and there are some great suggestions and insight into what is
causing prices to go up, and what could be done about it.
Nonetheless, we made it part of the record.
First, I would like to welcome our second panel. I will
introduce them as they take their seats. Mr. Kevin Carey will
start off our second panel. Mr. Carey is policy director of
Education Sector, a nonpartisan think tank in Washington, DC.
His research includes higher education reform, improving
college graduation rates, community colleges and higher
education affordability. I liked the testimony I read last
night.
Following Mr. Carey, we will hear from Dr. Carol Quillen,
president of Davidson College, an independent liberal arts
college for 1,900 students located near Charlotte, NC.
President Quillen is Davidson's 18th president and joined the
Davidson College community on August 1st.
Our next witness is Dr. Robert Mendenhall, president and
CEO of Western Governors University, a private, not-for-profit
online university that offers competency-based degrees. Dr.
Mendenhall has more than 30 years of experience in the
development and delivery of technology-based education.
Finally, we have Mr. Charlie Earl.
Charlie Earl is the executive director for the Washington
State Board for Community and Technical Colleges. Mr. Earl has
served as president of Everett Community College. He currently
serves as the chair of the National Council of State Directors
of Community Colleges.
I thank you all for joining us today. As I said, I read
your testimonies last night. I think there is some really good
stuff in there, so I am sorry that we have lost Senators here.
I know people are busy, but I want you to know that your
testimony will be made a part of the record in its entirety.
And, we have staff here, but I appreciate the insights that
each of you have given on this issue. I thought your testimony
was very, very well-written of what I read last night.
We will ask you to just give a short statement as your
statements will be made a part of the record in their entirety.
We will go from left to right. We will start with Mr. Carey.
STATEMENT OF KEVIN CAREY, EDUCATION POLICY
DIRECTOR, EDUCATION SECTOR, WASHINGTON, DC
Mr. Carey. Thank you, Chairman Harkin, Ranking Member Enzi,
and members of the committee for the opportunity to speak
today.
The price of higher education in America is spiraling out
of control. Student loan debt is at an all-time high. Many
students and families can no longer pay the college bill, and
neither can the American taxpayer. Annual Federal college aid
has ballooned by over $100 billion per year over the last
decade. Innovation is needed and quickly.
It is important to note that there are two elements of
college affordability: cost and price. Costs are what colleges
spend to educate students; prices are what students pay to
attend college. We need innovation in both cost and price to
fix the affordability problem.
Now, some colleges will tell you that there is no way to
reduce costs without harming the quality of education they
provide. This is not true. We know that colleges can reduce
costs and maintain quality because some of them are doing it
right now. Some of them are here today. Others include Virginia
Tech, which has used technology to revamp its math courses over
a decade ago, dramatically reducing costs while improving
student learning at the same time. And there are hundreds of
other colleges and universities in this country that are
applying similar techniques today.
The University of Minnesota branch campus in Rochester has
a lean student focus structure that costs a fraction of what it
takes to fund a traditional university. The University of
Maryland system recently collaborated to cut costs system-wide.
Meanwhile, Carnegie Mellon and MIT are developing high quality,
next generation, online courses that will be offered to
students around the world free of charge. These and other
examples show that colleges can cut costs and improve learning
simultaneously.
Yet, many of these innovations are not widespread and
other, more commonly used cost cutting measures like replacing
tenure track faculty with adjunct faculty have not resulted in
lower prices for students. That is because while costs are a
function of practice, prices are largely a function of policy.
And prices are the root of the affordability problem.
Now to be sure as we have talked about today, many States
have slashed higher education budgets in recent years resulting
in tuition hikes that are not the fault of colleges and
universities. Many of your colleagues in State legislatures are
passing their higher education bill onto you.
But the price problem is not merely cyclical. For 30 years,
colleges have raised prices well beyond inflation in good times
and in bad times. Why do they do this? I think the answer is
simple: because they want to and because in the current policy
environment, they can.
They want to because money is useful for buying things that
colleges care about like fame, and prestige, and so-called
better students. They can because recent economic trends have
made their product so valuable. The earnings gap between
college graduates and everyone else is growing.
College graduates were much less likely to lose their jobs
in the recent recession, and parents and students know this.
And so they scrimp, and they save, and increasingly they borrow
because, really, what other choice do they have?
We cannot change the desire of colleges to raise money from
tuition increases. Everybody wants money. What we can change is
their ability to recklessly increase tuition year after year by
implementing three policies that I would characterize as price
innovation.
One of them is about regulation and there has been a lot of
discussion about regulation this morning. I have a different
take on regulation. I do not actually think there is much
credible evidence that the cost of compliance with reasonable
regulation really is driving college costs up in this country.
I think the regulatory problem is that we are keeping low-
priced competitors out of the higher education market. Let me
give you an example.
Let us say you wanted to create a nonprofit organization,
or a for-profit organization, and all you wanted to do was
provide the world's greatest online college calculus classes.
You wanted to specialize. You were not going to offer degree
programs. You were going to be really good at one thing and
because of the economies of scale involved with technology,
once you get big enough, you could offer that course to
students at a very, very low price.
Right now, you are not allowed to use--students would not
be allowed to use their Federal financial aid money, which most
students now use to go to college in order to pay you. You
would not be allowed to offer credits that would automatically
transfer into other college systems. Those are regulations that
our existing colleges and universities are actually very much
in favor of because they keep control over who is in the system
to the accreditation process which is run by existing colleges
and universities.
I think the Federal Government could create basically a new
space where innovative competitors who are willing to offer low
prices and be accountable for quality and transparent about
what they offer, could compete and have price competition for
students.
Second, I think we need to create more transparency in the
higher education market by actively providing students,
parents, and guidance counselors with consumer information
about college prices, learning results, graduation rates, and
employment outcomes for all colleges, nonprofit, and for-
profit.
We need colleges to compete for students on value, which is
the combination of quality and price. But without better
information on quality, there can be no such competition and it
is the proper role of the Federal Government to require
colleges to report information about value.
Finally, I think we should, as Under Secretary Kanter said,
reward States that implement a comprehensive higher education
reform agenda that encourages greater college competition,
innovation, and investment in higher learning.
Thank you very much.
[The prepared statement of Mr. Carey follows:]
Prepared Statement of Kevin Carey
summary
The price of higher education in America is spiraling out of
control. Loan debt is at an all-time high and many students and
families can no longer pay the college bill. Neither can the American
taxpayer--annual Federal aid has ballooned by over $100 billion in the
last decade. Innovation is needed, and quickly.
There are two elements of college affordability: cost and price.
Costs are what colleges spend to educate students. Prices are what
students pay to attend college. We need innovation in both cost and
price to fix the affordability problem.
We know that colleges can reduce costs because some are doing so
right now. Virginia Tech used technology to revamp its math courses
over a decade ago, dramatically reducing costs while improving student
learning at the same time. Hundreds of other colleges are using similar
methods to redesign courses. The newest University of Minnesota branch
campus has a lean, student-focused cost structure. The University of
Maryland system collaborated to cut costs systemwide. Carnegie Mellon
and MIT are developing next-generation online courses that will be
offered to students around the world, free of charge. These and other
examples show that colleges can be more efficient without sacrificing
student learning.
Yet these innovations are not widespread, and other cost-cutting
measures, like the increased use of adjunct and part-time faculty, have
not resulted in lower prices for students. That's because while costs
are a function of practice, prices are a function of policy. In recent
years, State tax and budget policies have led to slashed higher
education budgets and resulting tuition hikes. But the price problem is
not merely cyclical: for 30 years, colleges have raised prices beyond
inflation in good times and bad. Colleges do this because they want to,
and because, in the current policy environment, they can.
We can't change colleges' desire for money from tuition increases,
which is useful for buying prestige and other things they covet. We can
change their ability to raise tuition, by implementing three policies
focused on price innovation:
1. Bypass the existing accreditation system, which is stacked
against innovation, and allow high-quality, low-cost entrepreneurs who
are willing to be transparent about and accountable for quality access
to the Federal financial aid system.
2. Create more transparency in the higher education market by
actively providing students, parents, and guidance counselors with
consumer information about college prices, learning results, graduation
rates, and employment outcomes.
3. Reward States that implement a comprehensive higher education
reform agenda that encourages greater college completion, innovation,
and investment in higher learning.
______
Chairman Harkin, Ranking Member Enzi, and distinguished members of
the committee, thank you for the opportunity to speak today about
innovations in college affordability. My name is Kevin Carey, and I am
the policy director of Education Sector, a non-partisan education
policy think tank based here in Washington.
The topic of today's hearing is a crucial one because, as we all
know, the price of higher education in America is spiraling out of
control. Over the past 10 years, public university tuition grew by an
average of 5.6 percent above inflation every year. As a result, student
loan debt is at an all-time high and access to college is threatened.
Students and families can't afford to pay these bills and,
increasingly, neither can the American taxpayer. Annual Federal
financial aid to higher education has increased by over $100 billion in
just the past decade. We can't just keep shoveling money into a system
that consumes resources at an ever-faster clip. Innovation is needed,
and needed badly.
I would like to start by making a distinction between two elements
of affordability: college costs and college prices. These terms are
often used interchangeably, but they actually represent very different
things. College costs are what colleges spend to educate students.
College prices are what students pay to attend school. We need
innovation in both college costs and college prices in order to fix the
affordability problem.
This will require new Federal policies that open up the higher
education market to innovative, low-cost, high-quality providers--
including organizations that look very different from traditional
colleges and universities. It means we need much more information and
transparency in the market for students and parents struggling to
choose the school that is best for them. And it demands a more active
Federal role in regulating an industry that cannot regulate itself.
Colleges like to argue that college costs cannot be seriously
restrained. Higher education is an inherently labor-intensive industry,
they say, and thus subject to the immutable laws of economics. If we
want college students to get a good education, we are told, we have no
choice but to keep writing ever-larger checks, forever.
This is nonsense.
Colleges are not--alone among all human institutions--exempt from
the need to become more efficient. Other industries have been
transformed by managerial innovation and the power of information
technology. Colleges, too, can take these opportunities to reduce
costs.
We know this because many colleges are doing it already. Some of
them are represented here today. Let me describe a few others. Virginia
Tech is one of the Nation's finest engineering schools and a leader in
technology-based innovation. In the late 1990s, it completely changed
the way students learn introductory mathematics. Instead of sitting in
a lecture hall once or twice a week, students go to a computer
laboratory that's open 24 hours a day, 7 days a week, where they work
through carefully designed problem sets that provide customized
feedback and access to video, text, and other materials. Tutors are on
staff to help students who need it. As a result, Virginia Tech has cut
its labor costs dramatically for courses like Linear Algebra and
Calculus. Crucially, student learning results stayed the same, or
improved. This is not a new experiment or obscure institution; a major
research university has been teaching this way for over a decade.
And it's not alone. The non-profit National Center for Academic
Transformation has helped hundreds of 2- and 4-year colleges use
technology to redesign their courses. Some are fully online, but most
are hybrids--a combination of technology and personal instruction. Many
of these colleges have cut their costs dramatically, in some cases by
over 50 percent. More important, student learning results have
consistently improved.
We all know there's a terrible college drop-out problem in this
country. These innovations help students pass courses that are often a
major barrier to graduation. Colleges can cut costs and improve
learning simultaneously.
Of course, technology isn't the only way to cut costs. Many
colleges and universities have been around for a long time. They've
become bloated, cumbersome, and inefficient. It's hard for
organizations like that to reform themselves. Like any industry, higher
education needs new, efficient competitors to challenge old ways of
doing business.
Recently I visited one such organization, a new branch campus of
the University of Minnesota, in Rochester. Rather than lay out a
smorgasbord of academic offerings, this university has only three
majors, all in health sciences. The brand-new, state-of-the-art
classrooms were built in renovated commercial space that used to house
a food court. Instead of building dorms, the university negotiated
group rates in apartments. There are no elaborate fitness facilities--
students work out at the ``Y.'' All the professors, including those on
the tenure track, teach undergraduates in small classes. The university
partners with local industries such as IBM and the Mayo Clinic to
provide its students with access to labs, experts, and internships. The
library has no books, just computers and wi-fi. If students like
college football, they can drive to the Twin Cities or watch TV.
All of this costs the Minnesota taxpayers a fraction of what it
takes to build and maintain a traditional university. And students are
getting a great education.
Other cost-reducing innovations have happened at the system level.
A few years ago, the University of Maryland system took a hard look at
itself. Buildings were sitting half-empty on Monday mornings and Friday
afternoons because students and professors don't like to attend class
then. Some students were taking too long to graduate. Faculty workloads
were too low and utility costs were too high. So system leaders put
their heads together and saved millions of dollars through joint
purchasing, improving classes where many students were dropping out,
and working with faculty to increase the number of credit hours
professors teach.
Meanwhile, some of the Nation's leading universities are developing
even more radical innovations.
Learning scientists at the Carnegie Mellon University Open Learning
Initiative have created sophisticated online classes that use
``cognitive tutors'' and virtual laboratories to teach subjects
including Statistics, Biology, Chemistry, and Logic. Initial studies
suggest that students learn more in these environments than in
traditional, sit-down courses.
In another example, just a few weeks ago, MIT announced the
creation of a new initiative called ``MITx,'' a next generation of
online courses designed in consultation with some of the greatest
scientists in the world.
The up-front development costs for Carnegie Mellon and MIT are not
inconsequential. The best online courses offer much more than some
lecture notes or videos on YouTube. But once the courses are developed,
it costs the university very little to serve additional students. The
more students who enroll, the lower the cost per student becomes.
And the Carnegie Mellon and MIT initiatives have more in common
than being developed by two of the world's great research universities.
They carry the same price to the student: zero. Both Open Learning
Initiative and MITx courses are free.
This shows the crucial distinction between cost and price.
There are many things colleges can do to reduce costs that they are
not doing. For every Virginia Tech using technology to cut costs and
improve learning, there are hundreds of universities teaching math the
same old way. The University of Maryland example is the exception, not
the rule.
But other cost-cutting strategies are widespread. We know, for
example, that in recent decades, colleges have been steadily replacing
expensive academic labor with cheap academic labor. In 1975, one-third
of faculty were adjunct or part-time. Today, over two-thirds of faculty
are adjunct or part-time, and these workers are often paid little
salary and no benefits. Whether or not this is a cost-cutting
innovation, it is definitely a successful cost-cutting strategy.
And yet at the very same time, college prices have been rising
dramatically. The cost of educating students is going down even as the
price students pay to be educated is going up. Why?
The answer lies with policy. Cost-reducing innovation is mostly a
matter of practice. Price-reducing innovation is mostly a matter of
policy.
Some of that policy is financial. There is no doubt that colleges
have raised their prices in recent years because States reduced their
subsidies for higher education. Some States have hacked hundreds of
millions of dollars from public university budgets, and universities
have responded by reducing access to courses and imposing dramatic
price increases on students and parents. They're counting on the fact
that families will still scrimp and save to send their children to
college--and that the Federal Government will come through with more
financial aid. Many of your colleagues in State legislatures are
passing the higher education bill to you.
In Maryland, State lawmakers rewarded the more efficient university
system with enough money to keep prices stable even as other States
were causing tuition to skyrocket. Some States are experimenting with
performance-based funding, while others are creating early college high
schools that allow at-risk students to earn college credits, for free,
before matriculation.
But overall, in a time when the Nation needs more well-educated
workers and citizens than ever, State financial trends are moving us in
the opposite direction. President Obama's proposed Race to the Top for
higher education is one way to address this problem. States need strong
incentives to maintain their commitment to higher learning.
But it's also important to note that, over the long term, college
prices have gone up in good economic times and bad. When State funding
goes down, college gets more expensive. When State funding goes up,
college gets more expensive.
Why do colleges always raise their prices? The simple answer is:
because they want to, and because they can. Most colleges are non-
profit. But that doesn't make them indifferent to money. Colleges and
universities enjoy a great deal of autonomy and they operate with
strong desires. What they desire most are fame and prestige. Both of
these can be bought.
For example, U.S. News & World Report ranks colleges by, in part,
how much money they spend per student. A college that discovered
innovative new ways to reduce costs and passed those savings on to
students in the form of reduced prices would see its ranking fall.
Unsurprisingly, nobody ever does this.
Colleges are also ranked according to their students' average SAT
scores. As a result, colleges are increasingly spending their financial
aid dollars recruiting high-scoring, well-off students, instead of
giving aid to needy students. They, too, are counting on the Federal
Government to make up the difference.
Colleges do much more than educate students. They are centers of
research and scholarship. They provide community services and sports
entertainment. They pay the salaries of administrators who are in
charge of setting prices. All of these things are expensive and can be
funded from student tuition.
This explains why colleges desire to constantly raise prices. It
doesn't explain why they get away with it. That question goes to the
peculiar market and policy environment in which colleges and
universities operate.
During their three-decade-long price-raising spree, colleges and
universities have benefited from a number of underlying economic and
demographic trends. First, the value of a college degree--what
economists call the ``wage premium''--has increased substantially. As
well-paying blue-collar and less-skilled jobs have disappeared from the
economy, the gap between what college graduates make and what everyone
else makes has widened. During the recent great recession, college
graduates were much less likely to lose their jobs and those who were
unemployed were more likely to get their jobs back.
Parents and students realize this. People keep paying ever-rising
college prices because: What other choice do they have?
Colleges have also enjoyed a surge of new students from the
children of baby boomers, a demographic bulge that has given higher
education institutions more customers than they know what do with. In
other words, the value of college is rising, demand for college is
rising, and the population of customers for college has been rising.
In a normal market, this would be an opportunity for new firms to
grab market share, particularly if existing firms are inefficient and
over-priced. But with a few exceptions, States stopped building new
public colleges and universities in the 1970s. Major new private
universities are a thing of the past. And while a number of for-profit
colleges have entered the market, they have, for the most part, not
chosen to undercut traditional colleges on price.
Nothing can change college's desire for money. What can change is
their ability to act on that desire in the form of steep tuition hikes.
There are three main ways public policy can create stronger incentives
for colleges to keep prices down--three kinds of price innovation.
The first kind of price innovation is about who gets to be a
college_or, more specifically, who gets to be a provider of higher
education.
Consider the company Straighterline. It was created by an education
entrepreneur and is located here in the Washington, DC area.
Straighterline offers online courses to students for a flat
subscription rate of $99 a month plus a one-time charge of $39 per
course, for all the courses students can take. They can enroll in
accounting, statistics, calculus, biology, and other introductory
classes. The textbooks and course materials all come from the same
major commercial publishers that regular colleges use. Individual
tutors are available, online.
Straighterline's prices are so low because, as I noted earlier,
once you make the initial investment in online course development, the
cost of serving additional students is very small. And also because
Straighterline isn't paying the sunk costs of maintaining football
stadiums, research departments, vice-provosts, and so on.
Straighterline currently serves several thousand students and is
growing. This education comes at no cost to the American taxpayer
because students aren't allowed to use Federal financial aid to take
Straighterline courses.
That's also the problem. Straighterline is a victim of higher
education regulation. Not the kind of regulation that traditional
colleges like to complain about, where they are required to disclose
basic information about themselves in exchange for billions of dollars
in Federal funds. This is the regulation that traditional colleges
cherish--regulation that protects them from competition from innovative
companies like Straighterline.
Federal financial aid like Pell grants and subsidized loans can
only be spent at accredited colleges. Who controls the accreditation
process? Existing traditional colleges and universities. What
incentives do they have to allow innovative low-cost competitors into
the market? None. What incentives do they have to keep them out? Many.
And the more expensive traditional colleges get, the bigger those
incentives grow.
Straighterline has managed to make a business by laboriously
forging partnership agreements with accredited colleges who agree to
accept their credits. But this just illustrates the absurdity of the
system.
The higher education market needs many new, high-quality, low-price
competitors to act as a counter-weight to traditional colleges and
universities bent on increasing prices forever. To be sure, students
also need consumer protection. One kind of innovative affordability
policy would open up the Federal financial aid system to low-price
entrepreneurs who are willing to be transparent about and accountable
for the quality of the services they provide. This policy would include
educators and companies who only provide individual courses. If you can
specialize by providing the world's greatest college calculus class,
and only that, why should you be excluded from the system?
This kind of experimentation could also make space for courses like
those developed by Carnegie Mellon and MIT. When it comes to
innovations in college affordability, nothing is more innovative than
``free.''
More broadly, when the Federal Government invests in education
resources, those resources should be made available to the public, for
free, under an open license. The departments of education and labor are
currently collaborating on just such an effort focused on training
workers in community colleges. These materials will be available for
educators to use and improve, and for entrepreneurs to repurpose and
sell.
The second kind of price innovation is transparency. Choosing the
right college is very difficult. It's a source of much anxiety for
students and parents, and for good reason: you can get it wrong. A bad
choice can leave students with years of lost time and mountains of
debt.
Yet there is very little reliable, comparable information available
to students about college value--the combination of quality and price.
How much do students actually learn while they're in college? What kind
of jobs do they get when they graduate? The answers to these and other
important questions are largely unknown. Markets only work well if
consumers have access to the all information they need to make smart
choices. Because the higher education market lacks this information,
many of the available choices are poor.
This, too, contributes to higher education price inflation. If
customers lack objective information about quality, they assume that
price is quality. The most expensive colleges are seen as the best
colleges, by definition. This creates further incentives for colleges
to charge higher prices, particularly at the top end of the market.
Higher education begins to resemble a luxury good. As former George
Washington University President Stephen Joel Trachtenberg once
admitted, ``You can get a Timex or a Casio for $65 or you can get a
Rolex or a Patek Philippe for $10,000. It's the same thing,'' Except
the Federal Government isn't spending vast amounts of money to help
students buy over-priced watches. And the norms and values established
at the high end trickle down through the entire system.
The Federal Government is well-positioned to improve the higher
education market by mandating the disclosure of more information. This
is a proper, limited role for the Government to play. The Securities
and Exchange Commission doesn't tell companies how to do their
business, but it does tell them to file honest quarterly earnings
reports, because without that information, the capital markets don't
work. Why should colleges and universities, which enjoy far greater
public subsidies than do publicly traded companies, not have to do the
same? If private companies can report earnings, colleges can report
their success in helping students learn and prosper.
If students and parents have more information about value, colleges
won't be able to get away with increasing prices while giving quality
short shrift. I encourage the Federal Government to create more
transparency in the higher education market by actively providing
students, parents and guidance counselors with basic consumer
information about prices, learning results, graduation rates, and
employment outcomes, for all colleges, for-profit and non-profit.
The third kind of price innovation is more direct intervention. I
know most Federal policymakers are wary of this, and rightly so. The
strength of the American higher education system lies, in part, with
its diversity and independence. Nobody wants the U.S. Department of
Education to take over our colleges and universities; it would do this
badly.
At the same time, it's simply not acceptable to continue spending
tens of billions of taxpayer dollars every year on an unaccountable
higher education system that has shown no willingness or ability to
restrain prices. The system will not change of its own accord. Vague
promises and good intentions will not suffice.
One way to move in this direction would be through competitive
grant programs that reward States that implement a comprehensive higher
education reform agenda, including boosting graduation rates,
encouraging innovation, focusing attention on student learning, and
keeping prices affordable for all students. States are and will remain
key players in higher education policy. The best should be recognized
and supported in their efforts.
In summary, college affordability is a crucial problem for the
Nation to address. The Nation's economic competitiveness and civic
character depend on giving every student who is willing to work hard
access to higher education. If current trends continue, that
opportunity will be lost for many. Something has to change, and soon.
The Chairman. Thank you, Mr. Carey. Now we go to Dr.
Quillen.
STATEMENT OF CAROL E. QUILLEN, PRESIDENT, DAVIDSON COLLEGE,
DAVIDSON, NC
Ms. Quillen. Senator Harkin, Senator Enzi, members of the
committee. On behalf of Davidson College and the National
Association of Independent Colleges and Universities, I am here
to describe an initiative called the Davidson Trust. I want to
thank you very much for the privilege of being here.
In 2007, Davidson College eliminated loans from its
financial aid packages. When a student is admitted, we meet 100
percent of that student's demonstrated financial need through a
combination of grants and employment, usually work-study. Some
students and families still choose to borrow, as it makes
financial sense for them. However, Davidson College meets
demonstrated need without loans.
This initiative, called the Davidson Trust, is a huge
financial commitment for a school without resources. As we
implemented it, we relied on the pro-education policies of
North Carolina and the Federal Government, and on gifts from
the Duke Endowment, and the Knight Foundation. We sustain the
Davidson Trust through unprecedented ongoing giving from the
Davidson College community who have made our commitment to
educational access their own.
Ensuring access to an unsurpassed education is, for us, an
ethical imperative. Davidson extends to all talented students
this invitation and this promise: we want you here. You belong
here. You can afford it. And if you enroll at Davidson, we will
do everything we can to ensure that you thrive, both while you
are at Davidson and after you graduate.
Measured in terms of admission statistics, the Davidson
Trust is working. We have maintained the highest academic
standards and students from underrepresented groups, first
generation students, and Federal Pell grant recipients have all
increased significantly.
These numbers matter, but they are not the only measures of
the success. Davidson's first year retention rate is roughly 96
percent. Our 4-year graduation rate is 88 percent, our 6-year
graduation rate is 92 percent. All have remained remarkably
consistent with the implementation of the Davidson Trust. Last
year, 6 months after graduation, roughly 95 percent of Davidson
graduates were in graduate school or employed in career-related
jobs.
The most telling indicator of our success is not our
graduation rates, or our increasingly diverse student body, or
our growing reputation as a good place for first generation
students. The most telling measure is what our graduates do in
and for their communities. We already know that the Davidson
Trust enables us to attract an ever greater number of
extraordinary young people whose talents enrich our campus and
enrich the education we offer. We look forward to, and are
grateful for, the incredible things they will do in the world.
Davidson is a small college committed to cultivating the
whole human being within a community that values unfettered
inquiries, academic rigor, personal integrity, intellectual
humility, and service to something beyond oneself. What we do
is expensive, yet we strive to bridge the privilege gap. At
Davidson College, students with means live and learn together
with students with Pell grants. And consider what our students
do.
They publish research that will help cure Alzheimer's. They
develop a leadership program for at-risk middle school girls.
They start a nonprofit organization that designs sports
programs for homeless people. They design a national registry
for bone marrow donors. They create online globally available
lessons in physics for high school teachers. They graduate
emboldened to lead and eager to serve. What we do is worth it
to those who attend Davidson and to the countless others who
benefit from their work.
Davidson is a distinctive example among a small group of
need-blind institutions with a dual commitment to access and
academic rigor. Through programs like the Davidson Trust, we
are changing the face of society's leadership and striving to
make equal opportunity real.
We welcome and need you as allies in this quest. Thank you.
[The prepared statement of Ms. Quillen follows:]
Prepared Statement of Carol E. Quillen
summary
On behalf of Davidson College and the National Association of
Independent Colleges and Universities, I am delighted and honored to
have this opportunity to share with you the success of our initiative
called The Davidson Trust. Thank you for your invitation to do so.
In 2007, with The Davidson Trust, Davidson College became the first
liberal arts college in the country to eliminate loans from its
financial aid packages. Once a student is admitted through our need-
blind admission process, we provide 100 percent of that student's
demonstrated need--defined as costs beyond what a family can pay--
through a combination of grants and campus employment. Families are not
obligated in any way to secure loans in order to pay for their
students' Davidson education. We know that some need-eligible students
still choose to borrow, because their families feel it makes financial
sense for them, and our data shows they repay these loans at a rate of
more than 97 percent--well above national averages. However, we do not
expect nor encourage families to borrow. Through the Davidson Trust,
Davidson College always meets demonstrated need without loans.
The Davidson Trust represents a huge financial commitment for the
college, which has an endowment of $500 million. While that figure
certainly is significant, it is approximately half of the average
endowment of our peer institutions.
With significant financial support from Davidson alumni, faculty,
staff, parents, students and friends--including private funders such as
The Duke Endowment and the John S. and James L. Knight Foundation--we
now are able to make a top-tier education accessible for any admitted
student, regardless of the family's financial situation.
More than one-third of annual support to Davidson is donor-directed
to The Davidson Trust, and as a result of this passionate belief in the
Trust, Davidson is able to extend an invitation and a promise to all
talented and eager students: We want you here; you can afford it; and
if you enroll at Davidson, we will do everything we can to ensure that
you thrive, while you are here and after you graduate.
Over the past 5 years, as a result of The Davidson Trust,
applications from underrepresented student groups have increased nearly
45 percent. The number of first-generation applicants has increased
nearly 54 percent. The number of students qualifying for, and
receiving, need-based aid has increased more than 33 percent, and the
number of Federal Pell grant recipients has increased by 93 percent. At
the same time, the profile of Davidson's enrolling students has not
changed as defined by traditional measures of academic preparedness.
Once enrolled, these students graduate at the same pace as our students
who come from more traditional backgrounds. In the world of higher
education at large, the graduation rate hovers around 50 percent.
Davidson's 4-year graduation rate continues to be 88 percent; and our
6-year graduation rate has remained at 92 percent.
Davidson was founded to help students develop humane instincts and
disciplined and creative minds for lives of leadership and service. Our
graduates go on to lead and to serve in their careers and in their
communities, in their volunteer activities and in the world. We are
changing the face of society's leadership--and we are doing that in no
small part because of The Davidson Trust.
______
Good morning, Chairman Harkin, Ranking Member Enzi and Senators. I
am Carol E. Quillen, president of Davidson College, and I am appearing
today on behalf of Davidson and the National Association of Independent
Colleges and Universities (NAICU), of which Davidson is a member,
although the specific views expressed today are mine alone.
NAICU serves as the unified national voice of independent higher
education. With more than 1,000 members nationwide, NAICU reflects the
diversity of private, nonprofit higher education in the United States,
including traditional liberal arts colleges, major research
universities, church- and faith-related institutions, historically
black colleges and universities, women's colleges, performing and
visual arts institutions, 2-year colleges, and schools of law,
medicine, engineering, business, and other professions.
It is my privilege to speak with you today about Davidson College
and how we are ensuring the affordability of our quality education
through our innovative program, The Davidson Trust.
In 2007 Davidson College became the first liberal arts college in
the country to eliminate loans from its financial aid packages. For all
accepted students, Davidson pledged to meet 100 percent of demonstrated
need--defined as costs beyond what a family can pay--through a
combination of grants and campus employment. Davidson, like several
other highly ranked colleges and universities, has long practiced need-
blind admission. Through our initiative, known as The Davidson Trust,
we further ensure that a student's financial aid award meets 100
percent of demonstrated need without loans. Some need-eligible students
still choose to borrow, and for some, such borrowing makes financial
sense. However, we do not expect this. Davidson always meets
demonstrated need without loans, through grants and employment, usually
campus employment of between 8-10 hours per week. Furthermore, all
available data and a repayment rate in excess of 97 percent indicate
that students who do choose to borrow money pay it back at a rate above
national averages.
The Davidson Trust builds on Davidson's longstanding leadership in
access and affordability. The minutes of an 1841 Board of Trustees
meeting state our founders' determination to keep the cost of education
``within the reach of many in our land who could not otherwise obtain
it.'' Expanding this vision, each year we now offer an unparalleled
education to hundreds of students for whom, before The Trust, even
applying to Davidson seemed unimaginable.
The Davidson Trust represents a huge financial commitment into the
future. Davidson's endowment of $500 million, though significant, is
approximately half that of the average endowment of our peer
institutions and is one-third that of some. A significant part
(approximately 58 percent) of our operating budget comes from tuition,
and our ``sticker price'' is lower than comparable institutions. Yet we
are committed to providing a second-to-none education that prepares
talented students from all backgrounds for meaningful lives of
leadership and service. We have learned to allocate our resources
efficiently while also offering the liberal arts education that best
serves students for the 21st century.
We are always striving to do more with limited resources, and
Davidson did not and cannot rely only on existing sources of revenue to
fund The Davidson Trust. Rather, our commitment was initially made
possible through the pro-education policies of North Carolina
legislators and through significant support from private foundations
and in particular through the generosity of The Duke Endowment and the
John S. and James L. Knight Foundation. The Davidson Trust is
sustained, year to year, through ongoing, visionary financial support
from Davidson alumni, faculty, staff, friends, parents and students,
all of whom have embraced our no-loans commitment and made it their
own. More than one-third of annual support to the college is donor-
directed to The Davidson Trust. To date we have raised more than $63
million in commitments to The Davidson Trust as we continue to seek
long-term funding.
And yet, The Davidson Trust is not primarily about financial aid.
It is an invitation and a promise that we extend to all talented and
eager students. To these students, The Davidson Trust says: We want you
here; you can afford it; and if you enroll at Davidson, we--the
faculty, staff, alumni, and leadership--will do everything we can to
ensure that you thrive, while you are here and after you graduate.
We make this promise as a direct extension of our foundational
commitment to service and to excellence. Davidson exists to assist
students in developing humane instincts and disciplined and creative
minds for lives of leadership and service. We create a culture of
inquiry and intellectual risk taking, where faculty and students who
love to learn create new knowledge in every classroom, every day, and
where students discover talents within themselves that they did not
know they possessed. As a result of the education and experiences we
offer, our graduates leave Davidson eager and able to fulfill their
aspirations in light of what the world most needs from them, and their
impact for good far exceeds their numbers. This impact is what
justifies a labor intensive, very expensive form of education. All
talented students deserve--and are entitled to--the opportunities we
make possible. And we as a nation need these students acting and
leading in the world. Our dual commitment to access and to educational
excellence in the interest of leadership and service enables Davidson,
though we are small, and schools like us, to meaningfully address some
of the urgent global challenges.
We believe in the promise that The Davidson Trust extends to
talented students nationwide. So, Davidson staff have traveled the
country offering a workshop, Financial Aid 101, to students, families
and high school counselors, and building partnerships with school
districts, community-based organizations and charter management
organizations like KIPP and YES Prep. We created a Center for Teaching
and Learning that provides integrated support for all students in
writing, speaking, math, science and economics. Our faculty received
grants from the Howard Hughes Medical Research Institute to create a
program, Strategies for Success, that encourages students from
underrepresented groups who express interest in math and science to
pursue research in those fields. Our residence life advisors developed
an early orientation and year-long peer mentoring program for students
of color to build community and ease the transition from home to
college. Davidson requires all first-year students to take a writing-
intensive course with each class's enrollment limited to 14 students,
where experienced faculty provide individualized instruction and all
students reach a high level of proficiency. Our commitment to our
students extends beyond graduation. Each year, Davidson alumni expand
internship and career opportunities to ensure that students smoothly
move from our liberal arts environment to impact for good in the world.
Last year, 6 months after graduation, approximately 93 percent of
Davidson graduating seniors were employed, on a fellowship or in
graduate school. This year, we anticipate an even higher percentage.
Measured in terms of admission and matriculation statistics--the
usual metrics--The Davidson Trust is working. Applications from
underrepresented groups are up: in 2007 Davidson received 743
applications from domestic students of color and 334 applications from
first-generation college students; last year we received 1,074
applications from domestic students of color and 514 applications from
first-generation college students.
Enrollment of students from underrepresented groups is up: in the
Fall of 2011, 100 domestic students of color and 39 first-generation
college students entered in the Class of 2015, compared to the 79
domestic students of color and 28 first-generation college students who
entered in the Class of 2011.
We are attracting and enrolling a greater number of students with
financial need: nearly 44 percent of the Class of 2015 qualified for
and received need-based aid, compared to approximately 33 percent of
the Class of 2011. Over the same period of time, the number of Federal
Pell grant recipients has increased from 115 to 222 (a 93 percent
increase).
We are attracting students from a greater number and wider range of
high schools, receiving applications from students at 2,152 high
schools last year, a number that has increased 6 percent over the past
5 years.
These numbers matter, but they are not the only measures of
success. In the world of higher education at large, the graduation rate
hovers around 50 percent. Davidson's 4-year graduation rate is 88
percent; and our 6-year graduation rate is 92 percent. These numbers
have remained remarkably consistent even after the implementation of
The Davidson Trust and the accompanying changes in the demographics of
our student profile. Similarly, we have maintained our rigorous
admission standards. The profile of our enrolling students has remained
unchanged as defined by traditional measures of academic preparedness.
The most telling indicator of our success is not retention and
graduation rates, or academic profile, or our increasingly diverse
applicant pool and student body, or our growing reputation as a good
place for first-generation students. The most telling measure is the
impact of our alumni--teachers, artists, bankers, consultants,
ministers, parents and entrepreneurs--who are leaders in their chosen
fields and in their communities and who give back to Davidson in record
numbers, year after year, so that all talented students, regardless of
means, can have the Davidson experience. While it is far too early to
speak precisely about the long-term impact of The Davidson Trust, we
already know that it enables us to attract truly remarkable students
whose talents enrich our campus and our community. We look forward to
and are grateful for the incredible things they will do.
Davidson is a small, residential college committed to cultivating
the whole human being within a community that values unfettered
inquiry, academic rigor, personal integrity, intellectual humility, and
service to something beyond oneself. What we do is labor-intensive,
expensive, and not scalable in conventional terms. Yet consider what
our students do. They work one-on-one with faculty on a year-long
research project that will help cure Alzheimer's; they develop a
leadership program for middle-school girls at an area school; they use
seed funds to start a composting program or design a solar-powered
cart; or they start a non-profit organization that supports schools in
Nigeria or sports programs for at-risk youth or a national registry for
bone marrow donors. What we do is worth it, to those who attend
Davidson and to the countless others who benefit from their work.
Davidson is a distinctive example among a small group of highly
selective, need-blind colleges and universities, schools that each in
its own way have long demonstrated a dual commitment to academic rigor
and access. Collectively, these schools both transform individual lives
and exert disproportionate societal impact. Through programs like The
Davidson Trust, we are changing the face of society's leadership.
Our experiences at Davidson show that thoughtfulness, dedication
and a focused effort with contributions from all--alumni, foundations,
and Federal, State, and local governments--can make an unsurpassed
education available and affordable to all talented students. Davidson
understands this as an ethical imperative as well as an urgent national
need. We welcome you as allies in this quest.
Appendix
Table 1
----------------------------------------------------------------------------------------------------------------
Class of Class of Class of Class of Class of Class of Class of
2009 2010 2011 2012 2013 2014 2015
----------------------------------------------------------------------------------------------------------------
First-Year Matriculants Need-Based
Aid
Early Decision:
Total Enrolled................... 182 176 187 186 208 222 236
No. Receiving Need-Based Aid..... 48 35 41 46 71 72 81
Percent Receiving Need-Based Aid. 26.37 19.89 21.93 24.73 34.13 32.43 34.32
Regular Decision:
Total Enrolled................... 281 288 278 296 283 279 254
No. Receiving Need-Based Aid..... 109 119 115 153 151 146 134
Percent Receiving Need-Based Aid. 38.79 41.32 41.37 51.69 53.36 52.33 52.76
Entire Class:
Total Enrolled................... 463 464 465 482 491 501 490
No. Receiving Need-Based Aid..... 157 154 156 199 222 218 215
Percent Receiving Need-Based Aid. 33.91 33.19 33.55 41.29 45.21 43.51 43.88
First-Year Need-Based Applicants
No. of Admitted Offered Need- 351 375 377 376 410 480 461
Based Aid.......................
Percent of Admitted Offered Need- 58.21 59.43 60.22 61.54 63.17 68.67 67.20
Based Aid.......................
Total No. of Enrolled First-Year 463 464 465 482 491 501 490
Students........................
No. of Enrolled and Applied Need- 228 231 243 306 309 284 285
Based Aid.......................
No. of Enrolled Receiving Need- 157 154 156 199 222 218 215
Based Aid.......................
Percent of Enrolled Receiving 33.91 33.19 33.55 41.29 45.21 43.51 43.88
Need-Based Aid..................
Average Need................. $19,379 $20,240 $21,624 $23,262 $30,715 $32,938 $33,552
----------------------------------------------------------------------------------------------------------------
Table 2
----------------------------------------------------------------------------------------------------------------
2006-7 2007-8 2008-9 2009-10 2010-11 2011-12
----------------------------------------------------------------------------------------------------------------
Direct Costs For Academic $38,784 $40,814 $42,950 $45,030 $47,029 $49,723
Year.
Need-Based Aid Per Academic
Year:
Percent Eligible for Need- 34.5 34.3 40.6 41.6 43.3 [In process)
Based Aid.
Average Need-Based Aid $19,548 $20,542 $24,121 $26,331 $28,167 [In process)
Award.
Lowest Need-Based Award.... $100 $100 $100 $1,000 $1,000 [In process)
Highest Need-Based Award... $46,680 $50,347 $47, 277 $54,017 $58,975 [In process)
Sources & Amounts of Need-
Based Grants:
Federal.................... $510,325 $695,583 $635,765 $874,108 $1,011,781 [In process)
State...................... $399,350 $474,160 $489,757 $588,454 $584,513 [In process)
Institutional.............. $9,090,905 $10,290,965 $12,559,906 $16,402,058 $19,037,110 [In process)
----------------------------------------------------------------------------------
Total.................... 10,000,580 $11,460,708 $,685,428 $17,864,620 $20,633,404 [In process)
PELL Recipients--All
Students:
All Students............... 106 115 124 171 221 222
----------------------------------------------------------------------------------------------------------------
Note: The information shown above is cumulative across all class years for all enrolled students of the above
academic years.
Table 3
----------------------------------------------------------------------------------------------------------------
Class of Class of Class of Class of Class of Class of Class of
2009 2010 2011 2012 2013 2014 2015
----------------------------------------------------------------------------------------------------------------
Ethnic Groups
Domestic Students of Color:
Applicants....................... 657 706 743 915 889 897 1074
No. Accepted..................... 185 262 247 245 250 290 286
Percent Accepted................. 28.2 37.1 33.2 26.8 28.1 32.3 26.6
No. Enrolled..................... 66 82 79 87 78 95 100
Yield Percent.................... 35.7 31.3 32.0 35.5 31.2 32.8 35.0
First Generation:
Applicants....................... 294 292 334 440 487 463 514
No. Accepted..................... 47 74 79 96 108 93 90
Percent Accepted................. 16.00 25.30 23.70 21.80 22.20 20.10 17.50
No. Enrolled..................... 24 25 28 43 58 40 39
Percent Enrolled................. 51.10 33.80 35.40 44.80 53.70 43 43
----------------------------------------------------------------------------------------------------------------
Table 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Entering Fall Cohort [percent] [percent] [percent] [percent] [percent] [percent] [percent] [percent] [percent] [percent] [percent]
--------------------------------------------------------------------------------------------------------------------------------------------------------
First-Year Student Retention
Rate By Entering Year:
Retention Rate............... 95.70 95.70 96.40 94.90 95.70 95.20 96.10 96.10 97.00 96.30 96.20
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Entering Fall Cohort [percent] [percent] [percent] [percent] [percent] [percent] [percent] [percent] [percent] [percent] [percent]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Historical Graduation Rates for
Entering First-Year Students:
4-Year Graduation Rate....... 86.30 86.50 88.20 89.80 83.80 88.80 90.10 92.10 89.20 88.70 88.00
6-Year Graduation Rate....... 90.00 89.20 89.20 91.50 87.20 91.40 92.70 94.40 91.00 90.90 91.50
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 6.--Endowment Per FTE Top Tier Liberal Arts--Colleges (as of June
30, 2011)
------------------------------------------------------------------------
------------------------------------------------------------------------
Davidson College........................................... 292,528
Median..................................................... 342,167
Note: Davidson is among the lowest of the top tier private liberal arts
colleges with respect to endowment per FTE student. The range among
the top tier as of June 30, 2011 (as reported in The Chronicle of
Higher Education) is from a high of $1,097,775 per FTE to a low of
$134,174. Davidson's endowment per FTE was $292,528.
The Chairman. Very good. Thank you very much, Dr. Quillen.
Dr. Mendenhall.
STATEMENT OF ROBERT W. MENDENHALL, Ph.D., PRESIDENT, WESTERN
GOVERNORS UNIVERSITY, SALT LAKE CITY, UT
Mr. Mendenhall. Chairman Harkin, and Ranking Member Enzi,
and members of the committee, thank you for inviting me to
testify.
I appreciate this committee shifting the discussion from
just helping students pay for college to actually making
college more affordable. And my message is that it is possible
to have high quality, affordable higher education, but it will
require new models, not just tweaking the existing system.
Many of you know of WGU. It was created by 19 Governors
specifically to use technology to rethink the way we deliver
higher education, to make it more affordable, more accessible,
and more accountable for results.
Second, to develop a model for competency-based education
that is, to measure learning rather than time, or to say it
another way, to hold learning constant and let the time vary
rather than holding time constant and letting the learning
vary.
It was created by Governors as a private nonprofit
university and it was designed to be self-sustaining on
tuition, which it is today, self-sustaining on tuition of
$6,000 for a 12-month year.
It was a true public-private partnership created by
Governors. The States put money into it, the Federal Government
contributed money to it, and corporations contributed. The
total cost to start WGU was $40 million, less than the cost of
a nice, new building on campus. And for that investment, we now
have a national university with 30,000 students growing at 30
percent a year, self-
sustaining on tuition.
Not only is it more productive as an institution through
the use of technology and a new business model, it is also more
productive for students through using competency-based
education. We know that students come to higher ed knowing
different things. We know they learn at different rates. In
fact, we each learn different subjects at different rates. And
so, we simply allow students to demonstrate what they already
know, spend their time learning what they do not know. The
result is that the average time to graduation with a bachelor's
degree is 30 months compared to 60 months nationally. Yet
employers say that our graduates are as well, or better
prepared, as those they are hiring from other universities.
States' Governors now are taking the next step in
incorporating WGU into their State systems. In the last year
and a half, we have created WGU Indiana, WGU Washington, and
more recently WGU Texas as private-labeled State universities
within the State systems.
This is a discussion about making college more affordable,
and I think we are not talking about 3 to 5 percent improvement
in college costs. McKinsey & Company did a study that suggested
that to make the President's graduation goal by 2020 will cost
$52 billion a year for the next 8 years at the current cost of
higher education, or alternatively require a 23 percent
increase in educational productivity. Real change at this level
requires brand new models.
The Center for American Progress created a report called
``Disrupting College,'' which applied the theory of disruptive
innovation to higher education. The two key things that it
suggested that are needed for real innovation is, No. 1, a
technology driver. And No. 2, a new business model.
We know that technology has changed the productivity of
virtually every industry in America except higher education. In
education, it is an add-on cost. In most cases, we use
technology within the existing business model or simply
delivering classroom education over a wire, and the costs are
just the same as they are in the classroom. The question for
this committee and for the country is: How do we encourage
rather than discourage new models in higher education?
States and Governors have done it before; public-private
partnerships have accomplished it. I have a couple of
recommendations.
The first is that the committee and Congress consider a new
financial aid demonstration project similar to the distance
education demonstration project you did in 1998. This would
allow financial aid for the kinds of new models that Kevin
talked about and that WGU represents. It would also allow us to
change the way we do student disbursements and make them more
performance-based to improve student performance. In short, we
could experiment with better ways to leverage the billions of
dollars in Federal financial aid to improve education.
Second, to remove barriers that inhibit innovation and
restrict the supply of higher education. This includes
regulations around seat time, credit hours, student-faculty
ratios, and a variety of Federal and State regulations that
limit the spread of new ideas and new models.
And finally, we need to look at policies that look beyond
traditional age students to support working adult students. We
have 37 million adults in America with some college and no
degree, and their jobs are going away. We do not make the
President's graduation goal without reaching out to these
working adults who are working full-time and allowing them to
gain an education and a better job.
Thank you very much.
[The prepared statement of Mr. Mendenhall follows:]
Prepared Statement of Robert W. Mendenhall, Ph.D.
Western Governors University (WGU) is a nonprofit, fully online
university established in 1997 by 19 U.S. governors with the goal of
using technology to develop a new model in higher education that would
be more affordable, more accessible, and responsive to workforce needs.
This new model uses technology to facilitate learning and applies
competency-based education, which measures learning rather than time.
As a result, the average time to complete a bachelor's degree at WGU is
just 30 months.
WGU offers accredited bachelor's and master's degree programs in
the four high-demand workforce areas of business, information
technology, K-12 teacher education, and health professions, including
nursing. Growing by approximately 30 percent annually, the university
has more than 30,000 students and 15,000 graduates in all 50 States and
the District of Columbia. Since 2010, three States have adopted State-
chartered versions of WGU, allowing them to increase higher education
capacity without adding ongoing impact to State budgets.
The affordability and productivity of WGU's model is evident. The
university is self-sustaining on tuition of $6,000 per year for most of
our programs, and, while other institutions are raising tuition
annually, WGU's tuition has only increased by $200 in the past 6 years.
Our Nation is facing a crisis in higher education. Today, 37
million American adults have started, but not completed, a college
degree. The Georgetown Center on Education and the Workforce tells us
that by 2018, 66 percent of new jobs will require a college degree, and
today, only 40 percent of adults have completed college. This means
that the United States needs to produce roughly 1 million more
graduates per year to ensure that we have the skilled workers we need.
According to a report published by McKinsey and Company in November
2010, to achieve this increase in degree production at the current
cost, the United States would need to increase educational funding by
$52 billion a year or increase productivity by 23 percent.
We know that we cannot increase funding for higher education at
that level, so we must find ways to make higher education more
productive and affordable. Efforts to cut costs by streamlining
administrative processes, reducing facility costs, and other savings
measures will not be enough. We must re-think the way we look at higher
education and make fundamental changes, including adopting new models
like competency-based learning.
``Disrupting College, How Disruptive Innovation Can Deliver Quality
and Affordability to Post-Secondary Education,'' published by the
Center for American Progress, discusses the application of disruptive
innovation in higher education by using technology enablers and new
business models. The report cites WGU and WGU Indiana as examples of
disruptive innovators in higher education.
As the U.S. higher education community works to increase access and
affordability, the committee and Congress need to support the
institutions that are ``disruptive innovators,'' and champion
legislation and regulations that will encourage, rather than hinder,
development of new models. We need to remove barriers that judge
institutions based on seat time, credit hours, and student-faculty
ratios.
It is time for higher education to take advantage of technology to
re-think education. We need to find ways to use it to customize
learning to individual needs, make college more relevant and meaningful
for students, increase productivity, expand access, and, most
importantly, improve quality and affordability.
______
Chairman Harkin, Ranking Member Enzi, and members of the committee,
thank you for the opportunity to testify before the committee today. I
am Dr. Robert Mendenhall, president of Western Governors University,
and I appreciate the committee's interest in considering innovations in
college affordability.
Western Governors University (WGU) is a nonprofit, fully online
university established in 1997 by a bi-partisan group of 19 U.S.
Governors. The university's mission from the start has been to improve
quality and expand access to higher education opportunities. WGU offers
accredited bachelor's and master's degree programs in the four high-
demand workforce areas of business, information technology, K-12
teacher education, and health professions, including nursing. Growing
by approximately 30 percent annually, the university has more than
30,000 students and 15,000 graduates in all 50 States and the District
of Columbia.
WGU provides high-quality education that is very affordable. The
university is self-sustaining on tuition of $6,000 per year for most of
our programs, and, while other institutions are raising tuition
annually, WGU's tuition has only increased by $200 in the past 6 years.
Today, 37 million American adults have started, but not completed,
a college degree. WGU was created to meet the needs of working adults
and other individuals who do not have access to more traditional higher
education. The average age of WGU students is 36 years old, most of our
students have families, 65 percent work full-time, and the majority
have completed some college when they enroll at WGU. In addition, 74
percent are classified as underserved (ethnic minority, low income,
rural, or first generation to complete college).
The WGU approach to learning is unique in two important ways,
resulting in increased productivity, a higher level of student support,
and shorter times to graduation. First, rather than simply delivering
classroom instruction through the Internet, WGU uses a competency-based
learning model, which measures learning rather than time. This approach
allows students to earn their degrees by demonstrating their mastery of
subject matter rather than spending time in class to accumulate credit
hours.
Required competencies for each degree program are defined in
collaboration with external program councils that are composed of
representatives from industry and higher education. By working with
these councils, we ensure that our students graduate with the knowledge
and skills employers need.
We know two important things about adult learners: they come to
college knowing different things, and they learn at different rates.
Rather than requiring all students to complete the same classes, all
lasting 4 months, WGU has created a model that allows students to move
quickly through material they already know so they can focus on what
they still need to learn. Students advance by successfully completing
assessments that measure competencies, such as exams, papers, and
performance tasks. To pass, they must earn the equivalent of a ``B''
grade or better. This model dramatically shortens the time to
graduation--the average time to complete a bachelor's degree is 30
months.
The second unique attribute of our model is the use of technology
to facilitate learning. Technology has increased the productivity of
nearly every industry except education, where it is most often an add-
on cost and not used to change or improve teaching and learning. Even
with the improvements in online learning platforms and resources, the
majority of online education is simply classroom education delivered
through the Internet, instructor-led and time-based. As a result, most
online higher education is no more affordable than traditional
education.
In contrast, WGU actually uses technology to provide interactive
instruction that allows students to learn at their own pace. Rather
than delivering lectures, our faculty, all full time, serve as mentors,
and are fully engaged in the learning process, leading discussions,
answering questions, and serving as role models for their students. WGU
does not develop course content and curriculum; faculty members
identify and qualify learning resources from the best third-party
sources in the country.
WGU is accredited by the Northwest Commission on Colleges and
Universities and the Distance Education and Training Council. The WGU
Teachers College, which offers initial teacher licensure as well as
nationally recognized math and science education programs, has earned
accreditation from the National Council for the Accreditation of
Teacher Education (NCATE). In addition, our nursing programs are
accredited by the Commission for Collegiate Nursing Education (CCNE).
In 2010, WGU partnered with Governor Mitch Daniels of Indiana to
establish WGU Indiana as ``Indiana's 8th State university.'' Creation
of WGU Indiana allowed the State to expand its higher education
capacity without adding ongoing cost and to offer an affordable option
to populations underserved by the State system. This State-chartered
version of WGU has also been adopted by Washington and, most recently,
Texas. Partnering with States in this way has resulted in dramatic
enrollment increases--more than 500 percent growth in Indiana in 18
months and 100 percent growth in Washington in 6 months.&
While we want to increase the affordability and accessibility of
higher education, we must also maintain quality. There is an ongoing
debate about the quality of online learning, but the fact is that the
quality of education is largely independent of the mode of delivery.
Just as with ``brick and mortar'' institutions, there are wide
variations in quality. Regardless of whether it is delivered in a
classroom or online, all higher education should be judged on the same
basis: educational results. That is, is it high-quality and effective
in meeting the needs of students and employers?
At WGU, we measure our success by the engagement and success of our
students. Here are some key data:
In the National Study of Student Engagement (NSSE), WGU
consistently scores above the average of all participating institutions
in areas such as the level of academic challenge, quality of academic
advising, supportive environment, and overall educational experience.
The university's 1-year retention rate is 78 percent, and
more than 80 percent of our students are in good academic standing.
On our most recent student satisfaction survey, 97 percent
reported that they are satisfied with their experience and that they
would recommend WGU.
Approximately 65 percent of graduates surveyed said they
had received a raise, promotion, or new job as result of their WGU
degree, and 97 percent said they would recommend WGU.
On our 2011 employer survey, 98 percent rated the
preparation of WGU graduates as equal to or better than graduates of
other universities; 42 percent rated it better.
We do not claim that we have achieved the perfect model for higher
education at WGU. We continue to work to refine and improve it,
focusing on affordability, but always keeping academic rigor and
student success at the forefront.
As the members of the committee know, our Nation is facing a crisis
in higher education. The Georgetown Center on Education and the
Workforce tells us that by 2018, 66 percent of new jobs will require a
college degree, and today, only 40 percent of adults have completed
college. This means that the United States needs to produce roughly one
million more graduates per year--40 percent more than we are producing
today--to ensure that we have the skilled workers we need. According to
a report published by McKinsey and Company in November 2010, to achieve
this increase in degree production at the current cost, the United
States would need to increase educational funding by $52 billion a year
or increase productivity by 23 percent.
We know that we cannot increase funding for higher education at
that level, so we must find ways to make higher education more
productive and affordable. Efforts to cut costs by streamlining
administrative processes, reducing facility costs, and other savings
measures will not be enough. We must re-think the way we look at higher
education and make fundamental changes, including adopting new models
like competency-based learning.
In a report for the Center for American Progress, ``Disrupting
College, How Disruptive Innovation Can Deliver Quality and
Affordability to Post-Secondary Education,'' Harvard Business School
Professor Clayton Christensen and the Center's Director of Post-
Secondary Education Louis Soares discuss disruptive innovation in
higher education. The report applies the principles of disruptive
innovation--using technology enablers, such as online learning, and
changing the business model--as an approach to make higher education
more affordable and accessible. WGU and WGU Indiana are cited as
examples of disruptive innovators in higher education.
As the U.S. higher education community works to increase access and
affordability, I encourage the committee and Congress to support the
institutions that are ``disruptive innovators,'' providing quality
education at a lower cost. Opponents of new models and innovative
approaches to higher education can be vocal and sometimes convincing,
but the best way to evaluate the quality and effectiveness of these
institutions is to ask their students, graduates, and faculty, as well
as the employers of their graduates.
I would also recommend that Congress consider creating a
``Demonstration Project'' for financial aid, similar to the
demonstration project for distance learning, which was created in 1998.
This project would allow, on a selected basis, waivers of current
financial aid rules to allow us to try new things and explore and
evaluate new models before implementing them nationally. A key area of
study should be the use of ``performance triggers'' for disbursing
financial aid. This project could also help determine the types of new
regulations and/or legislation needed to support competency-based
education, in other words, measuring learning rather than time.
It is vital that Congress support new, more cost-effective models
of higher education. We need our legislators to highlight and promote
new models and ensure that future legislation and regulations support,
rather than hinder, development of new models. For example, we need to
remove barriers that judge institutions based on seat time, credit
hours, and student-faculty ratios.
It is time for higher education to take advantage of technology to
re-think education. We need to find ways to use it to customize
learning to individual needs, make college more relevant and meaningful
for students, increase productivity, expand access, and, most
importantly, improve quality and affordability. I appreciate this
opportunity and look forward to working with the committee and the
Administration to advance our mutual goals of college affordability.
Thank you again for allowing me to testify before the committee today.
I look forward to answering any questions that you may have.
The Chairman. Thank you, Dr. Mendenhall.
Mr. Earl.
STATEMENT OF CHARLES N. EARL, M.A., B.A., EXECUTIVE
DIRECTOR, WASHINGTON STATE BOARD FOR COMMUNITY AND TECHNICAL
COLLEGES, OLYMPIA, WA
Mr. Earl. Chair Harkin, Senator Enzi, thanks much for
having me this morning. I very much appreciate the opportunity
to share some thoughts of what we are doing within the
community and technical colleges in the State of Washington.
As the executive director of the State system, I am
definitely honored to be in the Nation's capital and so pleased
to be part of a 2-year college system that is, indeed, building
careers and contributing so much to the economy of the State of
Washington. We are a system of 34 colleges presently. Last
year, we served 460,000 individuals in the State.
I would be remiss if I did not just start off with a thank
you to the faculty and staff of those colleges that have done
such tremendous work over the last few years during the
recession. Our enrollments are way up. Our money, the combined
State and tuition money is down in net terms, and our
educational outcomes are up. So it is a tremendous piece of
work.
I also want to thank Senator Murray for her steadfast work
over the years in support of higher education and the workforce
development system.
Like community colleges across the country, we have an
open-door admission policy that assures that every person who
can benefit from higher education has the opportunity to do so.
We strive to get students into colleges, and we work very hard
to keep them there, so that they can complete their work and
gain the advantages of higher education, regardless of their
life and financial circumstances.
Affordability. There are many elements or contributors to
affordability and so, I will just highlight a few.
First of all is institutional costs or what drives the cost
within institutions and that is primarily determined by
student-faculty ratios, as well as other employment costs. And
limitations that we have felt because of the limitations in
overall revenue structures over the last few years have indeed
limited costs, at least in the State of Washington.
The higher education system is very important to
affordability and in Washington's case, it has a very robust 2-
year to 4-year transfer system. It works very, very well. We
have contract relationships between the 2-year system and the
4-year public universities that assure slots, which basically
what that means is the promise of the State that a 2-year
college, a successful 2-year college degree will find a place
in one of the public universities, and thus enjoy the lower
tuition costs, and probably live at home while that is
occurring is a big part of the overall average cost of a
baccalaureate degree. So system cost--system structure State by
State is very important to affordability.
To move on. State support that complements Federal
financial aid support is very, very important. There are a lot
of labels for what the State of Washington does, State need
grant, opportunity grants, worker retraining, a bunch of
programs that indeed help our lower income students stay within
the colleges, and they are enjoyed also by most of those by the
universities.
Moving students further and faster, so that educational
effectiveness performance of the college or university is
critical. In Washington, we have developed a financial reward
system to our 2-year colleges for elevating the educational
throughput of their entire student bodies. And a performance
reward system that enables the colleges to earn additional
funding for which they can do additional investments in student
success appears to be quite successful. Our completions of
certificates and degrees have increased 42 percent since we
started this program 4 years ago, and that is substantially
more than the enrollments.
Dual credit program, we partner with the schools, the high
schools in Washington to enable high school juniors and seniors
to dual enroll at high school credit and college. Nineteen-
thousand Washingtonians last year earned two quarters' worth of
college credit. When you run those numbers out for what that
credit means to them for their college time, it saves those
families about $40 million bucks a year. It is a huge benefit
and goes to affordability.
Finally, the aspects of other college-going costs and not
particularly, I think, in the public colleges and universities
goes way beyond just thinking about tuition. In the Washington
2-year college system, we have recently completed the redesign
of 42 or our 81 most frequently enrolled courses with a maximum
of $30 textbook costs. Gathering and enabling students to use
information available on the Web or our faculty have actually
remade textbooks in digital formats for the students is going
to have tremendous savings for our students over years in these
frequently enrolled courses.
We are part of a 38 institution, 24-by-7 e-tutoring
program. We have been in that just 3 years now, but the hit
rates are just substantial. And that is free to students and
available, of course, all the time.
Then finally, e-learning and we now in Washington across
those 34 colleges are offering, or the students earned last
year enough credit that would have required six more colleges.
And the transportation cost savings, childcare savings, the
tremendous effectiveness, we think, for our students.
Thank you for the opportunity to comment. I look forward if
there is time for any questions.
Thank you.
[The prepared statement of Mr. Earl follows:]
Prepared Statement of Charles N. Earl, M.A., B.A.
summary
Introduction and thanks to committee.
Background on Washington's community and technical college system:
34 community and technical colleges.
Help fuel our economy--provide training; people need to
land good jobs; employers need to thrive.
Join forces with local employers to provide training in
critical areas of job growth.
Also shed programs that become less relevant for the
workforce and more resources to programs for today's and tomorrow's
jobs.
affordability
Hold tuition rates to the national average.
Utilize strong State need grants affordability.
Move students further/faster.
Hold down other college going costs.
state financial aid
State-need grant for higher education.
Opportunity grant for higher education job training for
low-income students.
Worker retraining grants.
Public/private partnership.
move students further/faster
Student Achievement Initiative performance funding.
High school/College dual credit program Running Start.
Integrated Basic Education and Skills Training (I-Best).
holding down student costs
Open Course Library limits text book costs.
eTutoring (free and 24-hour availability).
eLearning used by 25 percent of students.
______
Good morning! Chairman Harkin, Ranking Member Enzi, and members of
the committee, thank you for inviting me to join you today. I
appreciate the opportunity to discuss the innovative ways we're keeping
college affordable at Washington's community and technical colleges. I
thank Senator Murray for her steadfast support of higher education and
workforce development in Washington and nationally.
My name is Charlie Earl, and I'm the executive director of the
Washington State Board for Community and Technical Colleges. I feel
honored not only to be here with you at our Nation's capitol, but to
represent a community and technical college system that is building
careers and reinvigorating the economy in ``the other Washington.''
I'll provide some background information about Washington's
community and technical college system and then share three strategies
that help keep our community and technical colleges affordable.
We have 34 community and technical colleges in Washington. Our
colleges help fuel our economy by providing the training programs that
residents need to land good jobs, and current and future employers need
to thrive. We join forces with local employers to offer programs in
aerospace, alternative energy, business services, hospitality, health
care and sustainable agriculture--critical areas of growth for our
State. We discontinue programs that have become less relevant for the
workforce. The colleges keep a laser-sharp focus on where jobs are now,
and where they're going to be in the future. And we move students and
resources to the necessary skills and knowledge.
Like community colleges across the Nation, we have an open door
admission policy that assures that every person who can benefit from
higher education has the opportunity to enroll. We strive to get
students where they need to be regardless of their circumstances--
whether they are preparing for a 4-year university, retraining for new
careers, or trying to raise their literacy or English skills.
The avenues to education are varied, but they lead to a common
destination: a good career and a life enriched with knowledge and
skills.
Our colleges serve a predominantly working class and low-income
student population--over half of our students work and go to school,
more than a third are parents, and the median age is 26. For many of
our students, all it takes is an expensive textbook . . . a slight
tuition increase . . . an unexpected car repair . . . or a medical bill
to put them over the edge financially and force them to drop out,
drastically reducing their chances of earning a living wage in the
future. We work hard to keep them in school.
Which brings us to the issue of affordability.
Compared to other States, our tuition is average and our financial
aid investments are among the highest in the country, which makes a
community and technical college education affordable for
Washingtonians.
Washington ranks 9th in the country in the number of Pell grant
recipients who also receive State financial aid, and 4th in the country
in how much State money those students receive.
In-State students who attend a community or technical college full-
time in Washington State pay $3,542 per year. We've held tuition close
to the national average despite deep budget cuts. This has been a tough
task. Ten years ago (in 2002), the State paid 78 percent of the cost of
enrollment for community and technical college students; today that
number has slipped to 63 percent.
Our tuition remains a fraction of the amount charged at 4-year
institutions. Students who go to a community or technical college for
the first 2 years of their bachelor's degrees save tens of thousands of
dollars in tuition. In fact, 38 percent of students who graduate with a
bachelor's degree in Washington started off in a community or technical
college.
We have a strong transfer system with State universities.
Proportionality agreements with each public university ensure that the
number of slots for transfer students grows at the same rate as slots
for university freshmen.
Our system also waives tuition to help the least skilled, lowest
income students catch up on the skills they missed in high school, and
transition to college-level programs. Our ``Adult Basic Education''
students only pay $25 per term. We also waive part of the tuition for
apprenticeship programs, parenting education, and military veterans.
In addition to our tuition policies, we keep college affordable for
our students in three other ways.
1. Providing a strong network of financial aid,
2. Moving students further and faster through college, and
3. Keeping student expenses down.
Our first strategy is to provide strong financial aid for lower-
income students.
Nearly half--47 percent--of the students in our system received
some form of financial aid in the 2010-11 school year, including State
and Federal aid. Our State's largest program is the State need grant,
which supplements Federal financial aid for low-income students. In the
2011-12 school year, 29,000 community and technical college students
will receive State need grants of up to $3,256. State need grants can
be used on a wider range of expenses than Federal Pell grants, so they
play an important role in rounding-out aid for our students.
Historically, our State has placed more money into the need grant
program when tuition rises, although the program is now under stress
because of additional proposed budget cuts.
The opportunity grant is a special program that provides funding
for low-income community and technical college students to train for
high wage, high demand careers.
Unemployed adults can get a jump-start on worker retraining by
getting grants that help pay for costs until traditional financial aid
kicks in. In the second year of the recession, our worker retraining
enrollments jumped from 6,000 to 12,000 full-time students, and the
Legislature gave our system a special appropriation to meet that
demand. Today, 45 percent of our students are enrolled in workforce
training.
Washington State also offers work-study programs and academic-based
scholarships. We are one of the few States to offer ``college bound''
scholarships for low-income 8th-graders who promise to finish high
school, stay out of trouble, and keep up with their grades.
Last year, Governor Christine Gregoire forged public-private
partnerships with local industries to provide scholarships for students
to complete degrees in high demand fields like science, technology,
engineering and math.
Our second strategy uses statewide programs to move students
further and faster through college.
Simply enrolling students in school is not the true measure of
success--it's what students achieve and what they can do with their
educations that count. We've launched a performance-based funding
system that tracks student achievement in key academic milestones.
Colleges receive financial rewards for the increased academic
performance of their students. Since we started tracking data in 2007,
we've seen a 42 percent increase in certificates and degrees--not
simply because more students are enrolling in the system, but because
more students are reaching important academic milestones and building
momentum to finish.
The program is called the ``Student Achievement Initiative'' and it
is being duplicated in other States now. Colleges use their award money
to reinvest in successful practices that improve academic achievement.
We also offer a popular dual-credit program that is appropriately
named ``Running Start.'' Running Start allows high school juniors and
seniors to attend tuition-free classes at community colleges. The
students not only earn credit toward high school graduation, they also
earn credit toward an associate degree or a bachelor's degree. Last
year (2010-11), 19,000 high school students--or roughly 10 percent of
the State's junior and senior class--earned on average two full
quarters of college credit, saving families across the State $41
million in college tuition.
These types of dual-credit programs are consistent with Governor
Gregoire's ``Washington Learns'' plan, which calls for a seamless
education system from kindergarten through graduate school.
Students who are not yet ready for college-level classes--either
because they didn't finish high school or don't speak English--can come
up to speed quickly by attending an Integrated Basic Education Training
(IBEST) program. This nationally recognized program pairs basic skills
instruction with workforce training. For example, a student might learn
basic math skills while working in an automotive class. Students don't
have to wait until they're done with basic-skills classes before they
start their job-training. It's basically a ``two for one'' deal that
keeps students motivated and moving through the system more
efficiently--and saves them money.
Our IBEST students are nine times more likely to earn a college
credential than those who go through basic skills first and then enter
workforce training. We are working with the Bill & Melinda Gates
Foundation on a national dissemination project of our IBEST model.
Our third strategy is to keep costs down for students.
Many of our community and college students live on the edge
financially, so we work to help cut their expenses using technology.
For example, textbooks alone can cost students more than $1,200 per
year, so we've developed an online, open course library. Faculty and
staff teams are redesigning 81 of the highest enrolled courses with
open digital content and with open textbooks that cost students $30 or
less per course. Already, students are saving $1.3 million in textbook
costs this year, just from the lead faculty who designed the first 42
open courses. These savings already exceed the original $1.2 million
investment from the State and the Bill & Melinda Gates Foundation. Our
students could save up to $43 million per year statewide if open
textbooks are adopted for all sections of these 81 courses.
Our system also manages the Northwest eTutoring Consortium, which
has 38 member institutions in six northwest States. Students have free
access to tutoring 7 days a week, 50 weeks per year--this is above and
beyond the kind of coverage provided in most face-to-face tutoring
sessions. The consortium is the largest online, free-for-students
tutoring site in the northwest.
E-learning is another way our students save money. About 25 percent
of our students take classes completely or partially online, saving
time and travel expenses.
In closing, I would like to thank you again for this opportunity to
speak to the committee on behalf of Washington's 34 community and
technical colleges. We share your goal of providing the highest quality
education at the most affordable cost. We achieve that goal every day--
in many ways--across our State. And in doing so, we enrich our
citizens, our communities, and our economy.
The Chairman. Thank you, Mr. Earl. I thank all of you for
what I would call very provocative statements. Provocative in
the good sense, provoking thinking, provoking new kinds of
thinking and new approaches. Because I think all of you have
said that in one way or the other that the old ways may have
served a purpose during a certain time, but we have to start
thinking anew on how we approach higher education.
Mr. Carey, you raised some interesting points in your
written testimony, but did not verbalize here today. You
pointed out that a lot of these new institutions, like
StraighterLine, cannot get accreditation. And why can't they
get accreditation? Because the accreditors are supported and
paid for by the colleges they accredit. So what interest do
they have in accrediting new entities?
As you said here in your testimony,
``Who controls the accreditation process? The
existing traditional colleges and universities. What
incentive do they have to allow innovative, low-cost
competitors into the market? None. What incentives do
they have to keep them out? Many. And the more
expensive traditional colleges get, the bigger those
incentives grow.''
I sympathize with that because we have had a couple of
hearings and we have looked at some of the accreditations and
accreditors, and I always thought it was odd that accreditors
are in a position to say, ``I examine you and accredit you, but
you, the school, pay me to do that.'' That is sort of a fox-
guarding-the-hen-house kind of situation there.
I wonder if you have any further thoughts on how we might
change our accreditation system because this is vitally
important.
Mr. Carey. I think Dr. Mendenhall made a great suggestion,
which is, an alternative to changing it is to use the large
amount of Federal financial aid money, now $40 billion in Pell
grants, $100 billion in loans. You could take a very small
amount of that and use it to experiment and offer opportunities
for providers of higher education who cannot be accredited
under the normal terms to be able to educate students with
Federal money under a very strict set of conditions.
It would have to be a low-cost education. It would have to
be a high quality education. Really, much more than normal
colleges are subject to under the existing accreditation
system.
The Chairman. Aside from that, accreditation does, to some
extent I will say, assure some quality. How do you assure the
quality in these new approaches, without some kind of quality
assurance process?
Mr. Carey. I think in some cases, the accreditation system
assures quality, although many of the colleges that have been
discussed recently were all accredited, and yet were not
satisfied with their quality.
The accreditation process accredits who you are, not what
you accomplish. To be accredited, you have to look like a
traditional college, you have to have the characteristics of a
college in terms of credentials, and library books, and so on,
and so forth.
But the accreditation does not accredit outcomes, and so
that, I think, is the appropriate place to go where you can
show that your students are learning, that you can demonstrate
that, you can prove it, and you should have the opportunity to
compete on a level playing field.
I would also say, we should think about course level
accreditation. Again, you can only be accredited if you are a
college and you offer entire degree programs. But some people
in StraighterLine, in the example that I cited that you cited,
they do not offer whole degree programs. They just specialize
in certain kinds of courses.
The Chairman. Yes, I got that. This is always a bedeviling
thing too about how we are approaching this. Almost all the
testimony here, Secretary Kanter, everybody is saying that the
jobs of the future are going to need to be filled by people who
graduate from college. So we think about college in a job
context, an economic context.
When I hear that, I am always reminded of the inscription
in the library at Iowa State University. A lot of the stuff was
put there during the Depression by the artists that were hired
during the Depression. And the inscription says this, ``We come
to college not alone to prepare to make a living, but to learn
to live a life.''
There is something about a liberal college education. I am
not pointing at you, Mr. Carey, but for all of you to respond,
that there is more than just getting a job. It is understanding
life, understanding societies, understanding art and music, or
just the interplay of different forces that make up a complex
society.
How do we balance that along with the need to make a living
too? In other words, how do we look at colleges in that context
without just looking at it as a conduit to a better job?
Anybody? Dr. Quillen, you represent a liberal arts college.
Ms. Quillen. I do not think they are mutually exclusive,
Senator.
The Chairman. I do not think so either.
Ms. Quillen. I will say that I think it is important for
colleges like Davidson, highly selective, academically
rigorous, basically residential community that brings together
a small number of very talented students with faculty doing
research.
We are valuable because of the close interaction that those
two groups of people have every day, all the time so that they
are constantly questioning, and learning what it means to live
a life of inquiry, and creating new knowledge together every
day. That is one model of higher education that serves a
particular population and that is socially valuable because of
the disproportionate impact for good that those graduates have.
I do not think it is the only model, and I think one of the
things that has been, these great ideas that my fellow
panelists have expressed today indicate that there are lots of
opportunities for us to create a much more diversified, much
more efficient higher education system that could easily
embrace all of these models.
I would make only a plea for the value of that kind of
education that you describe and that is celebrated at the
University of Iowa, which is what we try to do.
The Chairman. I have some more. I have run out of time. I
have a followup question on that and also about Western
Governors, but I will turn to Senator Enzi for his round.
Senator Enzi. Thank you, Mr. Chairman. I have questions for
all of the panelists. I know I will not have time to ask them
all, but I will submit the ones that I do not get a chance to
ask in writing.
I am going to start with Western Governors, Dr. Mendenhall,
because I was at a higher education conference, a WICHE
conference when the States, which included mine, made the
announcement about Western Governors. And all of the college
presidents who were there were fascinated by it, and the first
question they asked after the announcement was over was, ``So,
how are they going to charge out-of-state tuition? '' There
were other questions that came up as a result of it too.
My question is that you mentioned that in addition to the
16 original States that you have recently added Indiana, Texas,
and Washington. Could you give some additional detail on what
motivated each of those States to form a partnership and how
did it differ with each State?
Mr. Mendenhall. Yes, thank you. Actually, each of those
States were among our founding States; they have just taken it
to another level now.
The Governors who created WGU, rather than every State
create their own virtual university, said let's create one and
share it, since it is virtual. And there is only one tuition,
not in-state and out-of-state tuition. But Governor Daniels in
Indiana started this and then it was picked up by others.
Really, how do we bring this in a bigger way to our State? How
do we incorporate it into our State strategy, into our State
plans?
What drove it in Indiana was these working adults who
essentially had limited education. Many of their jobs had
disappeared, other of their jobs were threatened, some of those
jobs were not coming back. In Indiana there is, if I recall it
correctly, about 750,000 adults with some college and no
degree. They are not well served by the traditional residential
system. They may not live close to a campus. Sixty-five percent
of our students are working full-time. There are not a lot of
classes offered at 10 o'clock at night.
This simply became, as the Governor said, a part of the
family of opportunities, part of the family of opportunities
within the State for our students, not instead of research
universities or community colleges, but an addition that would
reach an additional population.
In Washington, the legislature picked up on it rather than
the Governor, and a whole different driving force. Essentially
they needed to add capacity for transfer students from the
community colleges. So the base statistic in Washington the
year before we came was that the No. 1 transfer destination for
community college students was the University of Phoenix. And
the State thought, you know, we are not fulfilling our
obligation to provide affordable higher ed transfer
opportunities for our community college graduates. And WGU
essentially allowed them to add capacity to their State higher
ed system without impacting their State budgets.
I think it simply meets the needs of States to add
affordable capacity within their State.
Senator Enzi. Thank you. And you also mentioned in your
testimony, and when you were speaking earlier, that you have a
competency-based model. As I understand this, the students do
not have instructors, they have a mentor that guides them
through the coursework.
Could you give us some detail on how that mentor-student
relationship works? How are the mentors selected? What type of
interaction do they have with the students? And what kind of
support services are provided?
Mr. Mendenhall. Yes, we are using the technology to
facilitate the learning interactions with students, which allow
us to individualize to every student, because if it is a
professor with 30 students, then the pace of the class is at
the professor's pace. And if you buy the assumption that
students come to education knowing different things, and they
learn at different rates, then the professor's pace, no matter
how good he is, is the wrong pace for a large number of those
students.
They are able to interact with interactive technology-based
learning materials. But there is a course instructor for each
of those courses that is integrally involved in leading
discussions, answering questions, providing a role model for
the profession.
Our students actually have two mentors, so they have what
we call a student mentor that starts with them the day they
start, stays with them until they finish, and responsible to
help them succeed through their college career. And then as
they go into each course, there is a course mentor and a course
instructor that essentially is the subject matter expert in
that course.
We have added other support services over time. We
discovered that half of our students were dropping for life
reasons, having nothing to do with academics. So we added 2
years ago free life counseling for our students so they can
access a licensed counselor in every State that can help them
through issues of divorce, or health, or jobs, or whatever.
We discovered that students were not always buying the
textbook. They were trying to pass the class without the
textbook. So we have digitized the textbooks, and we are
providing them as part of the tuition.
We continue to try to innovate, to find ways to help
students be more successful in the model.
Senator Enzi. I think that textbook issue is a big one. I
had just recently looked up a governmental accounting book that
I thought I might buy and it was $250.
The Chairman. It was a textbook?
Senator Enzi. A textbook, yes. My time has expired. I will
submit questions for the rest.
The Chairman. Thank you, Senator.
Senator Franken.
Senator Franken. Thank you all for your testimony.
Dr. Mendenhall and Mr. Carey, both of you in your testimony
mentioned the need for disruptive innovation in our higher
education system. Mr. Carey, you talk about the availability of
online courses that are ineligible for credit at universities.
And Mr. Mendenhall, you are living in a world of disruptive
innovation every day.
I heard a lot of terms, performance value, talking about
accreditation. It all brings to me the question of how we
measure success, how we measure performance value. We pay a
tremendous amount of money out in Federal loans, but also in
Federal grants, including Pell grants. How do we determine how
we spend that large amount of money most effectively?
I was wondering, Mr. Carey, do you have any idea about that
because we are talking about--Dr. Quillen talked about the
tremendous graduation rates and job rates, and Dr. Mendenhall,
you also talked about outcomes. I just want to know how we
measure if we are getting that bang for our buck federally.
Mr. Carey. Thank you. I would say a few things.
First of all, if a student is not graduating, then they are
not getting much value for their education. The job market does
not give you very much partial credit for going to college, and
I think we said 37 million adults, we heard earlier today, in
America right now, who have been to college and yet have no
degree.
I definitely agree with Chairman Harkin that college is not
merely vocational and there are incalculable benefits that you
receive to your person and in your life from going to college
that cannot be measured in dollars and cents.
However, the main reason most students go to college is to
get a job, to get a better job, to succeed in the economy. I
think we can now find out what happens to students after they
leave college, what kind of careers they go into, how much
money they make. Can they pay their loans back? If the cost of
higher education is so high that it does not give you enough
earning power to pay your loans back, then I think you have to
question whether there is enough value there.
I also think there is the question of what are the right
measures for public policy purposes, and then what are the
larger ideas of value that really are properly left within the
sphere of higher education? And I think we should not be trying
to regulate the global value of a liberal arts education. I
think that would not work very well. But I do think we should
focus, for consumer protection purposes and for regulatory
purposes, on important things like graduation rates.
Given the students you have, if you enroll a lot of lower
income students, first generation students, underprepared
students, you are not going to graduate 98 percent of them.
Senator Franken. Of course.
Mr. Carey. But you might be able to graduate 60 percent of
them and that might be a really good number. Those kind of
contextual measures, I think, are important.
Senator Franken. I see Dr. Quillen smiling because she does
get those students. But you are a very selective school and
while I think what you are doing is absolutely commendable and
a great model, I do not know if it is scalable. I mean, you are
nodding, and I am just going to take that as a yes.
Ms. Quillen. Not scalable in conventional terms.
Senator Franken. Yes. Mr. Earl, and then I want to get to
one last question, so take less than a minute.
Mr. Earl. From the 2-year college system, we really have no
ultimate value than the worth of our credential. So if our
professional technical certificate and associate degree holders
are not hired, or if we get feedback they are not capable, we
are toast. And similarly with our transfers to the
universities, if our students do not perform well at the
universities, those patterns will be known, and they will not
take our students.
Senator Franken. I agree. I think we have to be tough about
that on this committee and I think we have to be tough on the
Federal Government if we really care about our value for our
dollar.
I am going to get under my time by asking a question now,
and it is really about in Minnesota, if you are getting
unemployment insurance, people receiving unemployment benefits,
Mr. Earl, can attend job training programs to get the skills
they need to get back to work.
Minnesota is also piloting a program called Right Skills
Now, which is a partnership between businesses and colleges to
get people fast track training in skills that businesses need.
And to me, this makes a lot of sense, but there are States
where this is not, where people receiving unemployment benefits
have to choose between keeping those benefits and getting
training, and I am planning to introduce a bill that would
change this.
From your perspective, would there be any problems to
allowing people who are receiving unemployment benefits to
enroll in one of your school certificate or short-term
credential programs?
Mr. Earl. No. We have a lot of unemployed people on
unemployment benefits that are in our programs. In effect, the
State of Washington has a financial aid program that bridges
the time from when they are unemployed and want to go to
school, and when the normal financial aid kicks in to make that
bridge.
There is not a direct tie. If you are unemployed, you have
to go to school, but a lot of them are.
Senator Franken. Right. Thank you, and thank you, Mr.
Chairman.
The Chairman. Thank you, Senator.
Dr. Mendenhall, the one question I wanted to ask, Senator
Franken kind of referred to it, and that is you recommended
that Congress look closely at the use of performance triggers
for dispersing financial aid. Could you get into that a little
bit more with me? What do you mean by that?
Mr. Mendenhall. Actually, I think two thoughts. I had
suggested a financial aid demonstration project, one that would
allow financial aid to be provided, on a selective basis to
those who are providing learning. It might be short of a full
degree or it is brand new models for degrees.
The distance learning program in 1998 really waived a
number of financial aid regulations so that we could figure out
how to apply financial aid to distance learning, which we then
incorporated into the 2006 reauthorization. I think something
similar to spur new models in innovation would be helpful from
the Federal Government.
The performance triggers, my thought there is really
allowing institutions financial aid flexibility waivers from
the current rules to explore different ways of distributing
financial aid to students.
Today, it is essentially an all or nothing. I mean, you
sign up for a semester, you get your financial aid whether you
do half the work or all of the work. I could see distributing
that financial aid based on completion metrics along the way.
That applies more to a competency-based model than it does to a
traditional model because we have it along the way. Students
can pass it as they go as opposed to taking all their tests at
the end of a semester.
But we believe if we had flexibility in financial aid, it
would motivate students to make greater progress and be more
successful, and my sense is that others could find innovative
ways to do the same.
The Chairman. I would like to look at some demonstration
programs like that.
Last, on the issue of student debt, setting aside Pell
grants, which is not debt, but student loans, guaranteed
student loans. I am not talking about the Perkins loans; I am
talking about the Stafford loans. As I said in my opening
statement, it has now outstripped credit card debt. Students
are graduating with humongous amounts of debt.
Now, I will make a provocative statement, but I want it
understood in the context that I am not saying it is true all
over the map; there are gradations in terms of students
borrowing money. But I wonder how many students, emancipated
students, are borrowing money for lifestyle purposes rather
than for educational purposes?
When you are young you might think,
``Hey, hey, that money, that's easy. I just fill it
out and get all that money. Wow. And guess what? I am
going to make a lot of money when I get out and I can
pay that all back.''
And they take on these huge debts not really understanding
what that means. They are not understanding that this is not
dischargeable in bankruptcy, by the way. It is around your neck
forever.
Every time I say that, people say, ``Oh, my gosh. These
students borrow this money, they need it.'' As I say, there are
gradations. I just wonder how many students are borrowing this
money for lifestyle purposes. Any thoughts?
Mr. Mendenhall. I know for our students that there are
clearly students borrowing it for lifestyle, and it appears
like free money.
The Chairman. Yes.
Mr. Mendenhall. You know, ``Someday we will pay it back.''
I could not say what percent, but it certainly exists, and I
think it contributes to increasing costs.
The Chairman. How do we clamp down on that? I think it is
bigger than what people think. I think it is a lot bigger than
what people think. I think a lot of students are borrowing
money for lifestyle purposes.
Mr. Mendenhall. I think we have a challenge in this country
in that we finance higher education with debt. And I think if
we could do more, and I know we have done some, if we could do
more to incent savings, to incent college savings, tax credits
so that people are spending their own money somehow they make
wiser decisions. The cost of tuition and the cost of education
is more important to them if it feels like their money. And too
often, I think, Federal loans do not feel like their money. It
will be someday, but they do not know that yet.
The Chairman. It seems that when I went to college, and of
course, at a State school, the idea was that you would live a
diminished lifestyle while in school, and you would sacrifice
knowing that if you got a good education, you would get a
better job, and you would have a better life later on.
I know a lot of the high school students I graduated with
when I was at college, they went out and got great jobs. Of
course, at that time you could get good jobs out of high
school. They had new cars and all that kind of stuff, and here
we were living three in a basement, scrimping by. I had no car
in college. I did not have clothes. We never took fancy trips
or anything like that. We could not afford to. But we knew that
if we sacrificed for a while that we would be better off later
on.
It seems to me that so many college students today want to
have it both ways. They want to go to college, but they do not
want to give up on any lifestyle. They want to have a really
nice lifestyle while they are in college and again, I say, I do
not know how you get on top of that. I do not know how we
restructure the loan program to make sure that they are
actually borrowing the money for tuition or for meeting
necessary college expenses rather than for lifestyle. I do not
have an answer to it, but I think it is a bigger problem than
what most people think.
Any thoughts on that?
Mr. Earl.
Mr. Earl. I have no numbers. It is recognized. I tend to
agree with you. It is worth looking at. I would just hang a
huge caution out that at least in the income demographic that
is prominent in the 2-year college system is, we need to be
very careful not to restrict the lower quintiles in the income
demographic from their ability to gain the advantages of higher
education. And we know that low-income people already are
disadvantaged from ever enjoying the benefits of higher
education. So I just throw the big cautionary note out.
The Chairman. Well said and a point well-taken. That is why
I say there are gradations in this and not just one blanket
condemnation of this at all. But it is something that I know is
happening out there.
I am going to call this to a close. Yes, Dr. Mendenhall.
Mr. Mendenhall. Just one other quick thought. You know,
most college aid has now shifted to merit-based aid as opposed
to need-based aid as colleges compete for the best students,
and rankings, and so on. And I think anything the Congress
could do to incent colleges to return to providing need-based
aid reduces the loan amounts that are required.
The Chairman. I agree with that. Any last statements, or
comments, or things that people want to make sure that we know
before I close?
Again, I just want to thank all of you for being here, and
for the great work you do every day. I know it is tough to get
away, and some of you traveled great distances.
This is an extremely important topic. This is not the last
of these hearings. This is the first, and we are going to keep
delving into this, and we are going to try to come up with some
suggestions on demonstration programs, new methodologies. But
we just cannot continue doing what we have been doing in the
past.
And I think that applies both on what I call the public
schools, public universities, nonprofit universities, community
colleges, but as I have had hearings over the last year or so
also on the for-profits too. This is a problem that spreads
across everything.
I thank you all very much for being here.
The committee will stand adjourned.
[Additional material follows.]
ADDITIONAL MATERIAL
Prepared Statement of the Pennsylvania Association
of Private School Administrators (PAPSA)
The Pennsylvania Association of Private School Administrators
represents the more than 300 for-profit career schools, colleges and
universities in the Commonwealth.
PAPSA is deeply concerned about student overborrowing. What schools
have found is that over borrowing is a big part of the loan debt
problem, especially among unsophisticated borrowers. And it is
increasing despite aggressive loan counseling.
Schools constantly report stories of students asking for all the
financial aid they are entitled to, paying their tuition and then
walking away with thousands of dollars which ends up paying for a newer
car, Christmas presents, plastic surgery, bail money or big parties
which the school usually ends up hearing about. These cash stipends can
be, in one case, as high as $24,000 for an associate degree. Despite
the best efforts of schools to curb overborrowing, the U.S. Department
of Education mandates that schools must disclose to students all the
loan money they are entitled to borrow. How can schools be responsible
for repayment when the U.S. Department of Education encourages
irresponsible overborrowing?
Overborrowing is defined in three ways by our schools:
Students transfer or move from school to school and
continue to mount debt which goes into deferment while they are
attending another college or school.
Commuter students, living at home, borrow available funds
in excess of direct school costs (tuition, fees, books) without regard
to debt consequences. While these dollars make sense for traditional
college students, they are not appropriate for commuter students. Since
schools must disclose all the loan money available to these students,
they often access these significant additional dollars with no thought
to the future.
Students also overborrow when they receive an unexpected
increase in PELL, OVR, State grant, public assistance or WIA funding.
As a result, more grant money is received than students originally
planned. But when the school counsels and encourages them to return the
excess loan money, the students almost always decline the request and
keep the extra loan amount.
The following are actual examples of student overborrowing in
Pennsylvania.
A small cosmetology school in Central Pennsylvania--In 2007-8-9,
the school had a 0 percent tuition increase and .06 percent enrollment
increase, yet overborrowing increased from 4 to 41 students (a 925
percent increase). Overborrowing loan amounts increased from $2,064 in
2007 to $68,473 in 2009 (over a 3,000 percent increase).
Chart 1. Overborrowing Loan Amounts--Cosmetology School
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Three Business school campuses in Northwestern Pennsylvania--In
2007-8-9 the school averaged a 3.8 percent total tuition increase with
a 43 percent enrollment increase, but a 152 percent increase in
overborrowing--from $234,000 to $590,000 in 2 years.
Chart 2. Overborrowing Loan Amounts--Three Business Schools
in Northwestern Pennsylvania
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
One business school campus in Central Pennsylvania--Between 2007
and 2009, the school averaged a 1.7 percent tuition increase each year
and no increase in enrollments or borrowers. Yet, overborrowing
increased by 104 percent (from 36 to 74 students) and overborrowing
dollars tripled from $100,193 in 2007 to $363,983 in 2009.
Chart 3. Overworking Loan Amounts--One Business School
in Central Pennsylvania
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Three small Pittsburgh technical schools under one ownership--While
the number of students overborrowing remained the same between 2007 and
2009, the total amount of over borrowing increased by 99 percent
($32,651 to $61,316). Although tuition increases averaged 6.2 percent a
year and enrollment increased by only 1.2 percent on average over the
period, the dollar amount of overborrowing increased as the same number
of students chose to increase their overborrowing.
Chart 4. Overborrowing Loan Amounts--Three Small Pittsburgh Technical
Schools
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Nineteen small cosmetology schools throughout Pennsylvania--
Although tuition increases averaged less than 1 percent per year for
2007 to 2008 to 2009 and the average enrollment increase was 3.8
percent a year, the number of students overborrowing increased from 757
in 2007 to 6,033 in 2009. Actual overborrowing loan dollars increased
sixfold, from $1,169,261 to $6,551,978 over the 3-year period.
Chart 5. Overborrowing Loan Amounts--Nineteen Small Cosmetology Schools
in Pennsylvania
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
A trade/technical school in Northwestern Pennsylvania--Between 2007
and 2009 the school had a 5 percent total tuition increase; a 42
percent increase in enrollment; and no change in the student
demographic. Yet, they experienced a 4,250 percent increase in
overborrowing--from $6,496 in 2007 to $255,680 in 2009. The number of
students overborrowing increased from 10 in 2007 to 180 in 2009.
Chart 6. Overborrowing Loan Amounts--Trade/Technical School in
Northwestern Pennsylvania
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
A business school in Northeastern Pennsylvania--Between 2008 and
2010, 65 percent of the students each took more than $1,000 in extra
loan stipends, averaging $5,351. Thirty-five percent took less than
$1,000. The 65 percent however, represented over 97 percent of the
total amount of loan stipends issued, or $1,480,000 of the $1,530,000
in extra stipend money.
The point in this example is the school's concern that 65 percent
of the students who borrowed more than $1,000 averaged over $5,000 in
extra stipends. The school felt the students were taking on unnecessary
expenses and would have a higher likelihood of default.
A 37 campus private group of schools in Pennsylvania and in other
States--Overborrowing increased from $17,601,189 to $34,883,339 a 101
percent increase in the private school group. Over the 3-year period,
there was a 7.6 percent tuition increase and a 41 percent increase in
enrollment.
Chart 7. Overborrowing Loan Amounts--A 37 Campus Private School Group
in Pennsylvania and Other States
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Large private college in Western Pennsylvania--Compare the previous
data to the data provided by a more expensive 2-year college in Western
Pennsylvania. Student overborrowing increased only slightly from
$1,329,854 in 2007 to $1,373,764 in 2009. The tuition increase averaged
3.5 percent a year. Enrollment between 2007 and 2009 increased an
average of 1 percent a year. There was no change in student
demographics.
Chart 8. Overborrowing Loan Amounts--Large Private College
in Western Pennsylvania
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
In this instance, tuition was above the State average in 2007 and
students were already borrowing larger amounts for all years in
question. The conclusion is clear. More expensive private colleges do
not see an increase in over borrowing since their students have
traditionally borrowed at higher levels. Relief, however, from
mandatory loan disclosure to students is needed at lower tuition
institutions.
The 3-year trend appears clear. While there were minor tuition
increases, no change in student demographics, stable or moderate
enrollment increases due to some new campuses, only over borrowing, as
was defined earlier, increased exponentially. In addition, from all
early indications the upward trend toward excess borrowing will
continue in 2010 and possibly beyond.
The problems PAPSA sees now with overborrowing will only be
exacerbated in the future by the recent gainful employment regulations
that the Department of Education has implemented. If career schools are
going to be penalized for high debt, (and currently are under cohort
default limit requirements) debt problems should be addressed at the
front-end of the loan as well by curbing over borrowing and considering
other front-end approaches.
PAPSA would like to see Congress or the U.S. Department of
Education consider additional methods beyond counseling for limiting
student borrowing. We propose Federal changes to allow an institution
to use professional judgment to decrease the loan amount approved for a
student based on the appropriateness of the budgeted items and
Satisfactory Academic Progress (SAP), as long as the loan amount fully
covers the cost of attendance (COA), as we understand COA to be
defined, and there are no other government programs that contribute to
the COA. We would be happy to provide legislative language if
requested.
Thank you.
Responses to questions of Senator Enzi, Senator Hagan,
and Senator Murray by Carol E. Quillen
senator enzi
Question 1. What challenges have you encountered in sustaining
Davidson's commitment to the Davidson Trust?
Answer 1. The Davidson Trust builds on Davidson's longstanding
leadership in access and affordability. The minutes of an 1841 Board of
Trustees meeting state our founders' determination to keep the cost of
education ``within the reach of many in our land who could not
otherwise obtain it.'' Expanding this vision, each year we now offer an
unparalleled education to hundreds of students for whom, before the
Trust, even applying to Davidson seemed unimaginable.
When Davidson's Board of Trustees established The Davidson Trust,
we knew that our aggressive investment in access (meeting 100 percent
of demonstrated need without requiring loans) would require an equally
aggressive effort to secure funding. The Davidson Trust is currently
sustained in large part through annual financial support from Davidson
alumni, faculty, staff, friends, parents, and current students. We
continue to seek long-term support. Our institutional commitment to The
Davidson Trust and to the ideal that it embodies has never wavered.
For this innovative program and others like it to succeed, Davidson
must persuade the public, whose support we need, that equal opportunity
matters, that all talented students are entitled to a transformative
education, and that our liberal arts education enables graduates to
exert impact for good far out of proportion to their numbers. Davidson
and schools like us that have demonstrated simultaneous commitments to
academic rigor, access, and service need the support of others who see
that our work is changing the face of society's leadership and making
equal opportunity real. The Trust benefits all students at Davidson--
not just those who receive financial aid.
The Davidson ``community'' has embraced these ideals. We aim now to
persuade the broader public that our work and impact merit their
investment.
senator hagan
Question 1. How do we change the mentality of ALL institutions of
higher education, to ensure that college is a realistic option for the
lowest income Americans, not just a select few?
Answer 1. Davidson is an academically demanding, residential,
liberal arts college. Because our approach to education is labor
intensive and expensive, we are small. Our commitment to access is
expressed through aggressive recruitment, need-blind admission and
offering financial aid that meets 100 percent of demonstrated need
without requiring loans. Because our endowment is roughly half the
average of our peer schools, our example suggests that institutions
like us have found or can find ways to commit simultaneously to
excellence and to access for all talented students.
Furthermore, as the HELP Committee's February 2, 2012, panel
indicates, the higher education landscape is increasingly wide-ranging
as existing and emerging institutions strive to meet the needs of a
diverse student population within a global economy. Different
institutions will express their commitment to access in vastly
different ways, and this range of options is crucial to serving all
students. Education must be a realistic option for all students
regardless of financial circumstances, yet we do not presume to
proscribe how institutions vastly different from Davidson should ensure
this access.
Please know that Davidson's commitment to access is not primarily
about financial aid. It is a promise to all talented students that they
can afford Davidson, and that if they choose to enroll, our faculty,
staff, alumni, and leadership will do everything possible to ensure
that they thrive while they are here and after they graduate. The
Davidson Trust is as much about nurturing our students once they have
enrolled and after they graduate as it is about getting them here. In
our view, providing this support is a crucial dimension of making equal
opportunity real.
Question 2. What priorities, if any do you foresee having to set
aside 5, 10 and 20 years down the road in order to honor the commitment
of The Davidson Trust?
Answer 2. Our commitment to The Davidson Trust is a dual commitment
to access and to educational excellence. The value of the Trust is
measured by the quality of the education our students receive and the
disproportionate impact for good our graduates exert in the world.
Therefore, our commitment to the Trust requires an equally vigilant
commitment to providing an unsurpassed liberal arts education. We
constantly ask how we can improve, refine, or re-imagine what we do and
how we do it. Of course, we seek to provide this education as
efficiently as possible. With an endowment and tuition rates that both
are lower than at comparable institutions, Davidson has demonstrated
that we can deliver an excellent education through efficient use of
resources and that we will be good stewards of funds raised going
forward.
Question 3. Can you tell me more about the leadership program for
at-risk middle-school girls? They are such an important demographic of
students that often need a little extra attention and support.
Answer 3. Davidson's Sigma Psi Chapter of the Alpha Kappa Alpha
Sorority, in partnership with the Junior League of Charlotte and KIPP
Charlotte, launched the Girls Leadership Program, a 10-month leadership
program for seventh- and eighth-grade girls. KIPP Charlotte is a
tuition-free, open-enrollment college preparatory middle school that
serves students who are traditionally underserved or marginalized in
education. The program draws on the award-winning Athena's Path
curriculum, which focuses on the specific needs of middle school girls,
and also incorporates a service element. Davidson's students mentor the
72 program participants and applied for a $2,000 grant to help fund the
program. The program is in its first year.
Our students embody Davidson's commitment to the values of
leadership and service in a variety of ways. The Girls Leadership
Program is but one of several outreach programs for at-risk youth
supported by our students and the staff of our Center for Civic
Engagement. I would also like to highlight three other outreach
programs sponsored by Davidson that focus on at-risk youth.
The Children's Defense Fund Freedom Schools program at Davidson
College (established in 2005) provides summer enrichment for 50
students in grades K through 8. The 6-week program fosters a love for
reading, increases self-esteem, and generates positive attitudes toward
learning. The program is grounded in a model curriculum that supports
children and families around five essential components: high quality
academic enrichment; parent and family involvement; civic engagement
and social action; intergenerational leadership development; and
nutrition, health, and mental health. Davidson College students serve
as Servant Leader Interns for the program participants.
Davidson was one of the first colleges in the Nation to become part
of the Bonner Scholars program, and has been a participant in that
program for 20 years. This is a 4-year scholarship program that centers
on a strong team of students working to bring about positive community
change through service, research and action. Our Bonner Scholars
partner with Communities in Schools to host an interactive college
visit day for approximately 50 middle school students from Charlotte
schools. Communities in Schools is the Nation's leading dropout
prevention organization.
Our Bonner Scholars and students involved in our Federal Community
Service Work Study program work with students in grades one through
five through the LEARN Works program at the Ada Jenkins Center, a
community center located in the town of Davidson. Through tutoring
services and mentoring, our students seek to inspire these children to
become lifelong learners. The LEARN Works program serves 60 students.
These programs and the innumerable other outreach efforts conducted
by our students and alumni exemplify Davidson's commitment to helping
our students lead lives of leadership and service. We estimate that 89
percent of Davidson's students participate in some sort of service
activity each year, and our students contributed over 82,693 hours of
service to the community last year.
senator murray
Question 1. What are your thoughts and plans to extend the economic
health and future of the Trust? How are you planning to advance the
institution's goals and expand the Trust for students?
Answer 1. The primary purpose of Davidson College is to assist
students in developing humane instincts and disciplined and creative
minds for lives of leadership and service. We do this by offering the
liberal arts education that best serves students for the 21st century,
a time when globalization and technology have changed the context in
which we work. In this 21st century world, communication across
disciplines and distance is easier, and information is increasingly
free. Working effectively now does require the talents we have long
stressed--critical thinking, creativity, clarity of expression, and
leadership. But it also requires technological literacy, multi-cultural
fluency, entrepreneurial problem-solving, and the ability to synthesize
vast amounts of disparate data. We need to offer our students the
opportunity to cultivate these talents. Furthermore, technology now
allows us to build our curriculum around student research and creative
work, so that, even as first-year students, they become active
producers of knowledge.
Ensuring access for all talented students to this form of education
is a direct extension of our primary purpose. It is expensive. Our dual
commitment to excellence and access can be compelling to individuals
not affiliated with the college, and we will need their support to
strengthen the promise the Trust holds out. We believe that the impact
our graduates make on the world justifies the cost of our labor-
intensive form of education. Our Nation needs these students acting and
leading in the world.
Question 2a. You mentioned at the hearing that you don't believe
the Davidson Trust approach is very scalable. Are there smaller steps
you would advise interested institutions pursue to follow your lead?
Answer 2a. As a small, residential, liberal arts college, Davidson
offers a type of education that is labor intensive, comparatively
expensive, and not scalable in conventional terms because it requires a
low student-faculty ratio and because the cost of the education we
offer exceeds our sticker-price tuition. Yet, as a group, highly
selective, need-blind schools are changing the face of society's
leadership and making equal opportunity real. Our graduation and
employment rates are very high; in an increasingly segregated America,
our residential campuses embrace kids from across the economic
spectrum; and our graduates enter the world committed to serving
something larger than themselves. The success of the Trust and of
similar efforts at schools like Davidson must be measured not only in
terms of the numbers we educate but also in terms of the
disproportionate impact we have on individual lives and on the society
that we and our graduates serve.
Question 2b. Are there successes, failures, and barriers you
experienced during the establishment and policy development of the
Trust that you can share with us?
Answer 2b. One visible measure of the success of The Davidson Trust
is the increase in the percentage of students with demonstrated
financial need who enroll at Davidson. Nearly 44 percent of the Class
of 2015 qualified for and received need-based aid, compared to
approximately 33 percent of the Class of 2011. Over the same period of
time, the number of Federal Pell grant recipients has increased from
115 to 222 (a 93 percent increase). And we are recruiting and enrolling
more domestic students of color and first-generation college students.
As successful as The Davidson Trust has been, the fact remains that
Davidson's tuition is expensive, and so one issue we face is ensuring
that Davidson remains an option for the middle class. For some middle-
class families who do not qualify for financial assistance, covering
the cost of attending Davidson is challenging. Our commitment is to
make a Davidson education accessible for all talented students. We
strive to honor this commitment by keeping our tuition low relative to
our peers and delivering our programs as efficiently as possible.
Shortly after we announced The Davidson Trust, our country entered
a recession. The economic downturn was a test of the college's
commitment to the Trust--our endowment earnings were down and our
students had increased levels of need. Other colleges and universities
backed away from the recent commitments many of them had made to no-
loan financial programs following our lead. Davidson remained committed
to its promise.
Response to Questions of Senator Enzi, Senator Hagan, and Senator
Murray
by Robert W. Mendenhall, Ph.D.
senator enzi
Question 1. Why did Indiana, Texas, and Washington simply not work
through their existing institutions of higher education? Why did they
not expand the capacity of those institutions?
Answer 1. Indiana, Washington, and Texas chose not to work through
their States' existing institutions for many of the same reasons that
WGU's founding Governors chose to create an entirely new university. It
is more difficult for existing colleges and universities, with their
established business models and academic systems, to radically change
their models. In every industry, not just higher education, true
disruptive innovation usually comes through the creation of a new
institution.
Each State had slightly different reasons for establishing State
versions of WGU, but the overriding reason for all of the States was
the fact that by creating a State-based WGU, they could add capacity
without incurring additional ongoing cost. WGU offers degree programs
that are affordable and accredited, as well as self-sustaining on
tuition of only $6,000 per year, and it would be very expensive for
each State to develop and earn accreditation for its own online,
competency-based programs.
In Indiana, a State that was deeply affected by the recession,
Governor Daniels was looking for ways to help the nearly 800,000
Hoosiers who had started but not completed college, many of whom were
working in low-paying jobs or whose jobs had been eliminated by the
recession. The Governor saw the creation of WGU Indiana as a way to
help Indiana residents to retool for the new healthcare and technology-
based jobs coming into the State. With its focus on the needs of adult
learners and its degree programs in high-demand career fields, WGU
Indiana adds another high-quality option to the State's higher
education opportunities without impacting the State's strained budget.
When WGU Indiana was launched, there were approximately 250 WGU
students in the State. Today, there are more than 2,200.
In Washington, the State legislature initiated the process of
establishing WGU Washington. The legislators were concerned about the
limited capacity of existing State institutions. This capacity shortage
was driving graduates of the State's community colleges to transfer to
expensive for-profit schools to complete their bachelor's degrees.
Endorsing WGU Washington allowed the State to offer another higher
education option for its residents. Since its launch in July 2011, WGU
Washington's enrollment has more than doubled.
Texas Governor Rick Perry, with the support of key legislators and
higher education policymakers in the State, established WGU Texas to
provide another affordable option for earning a degree. Like Indiana,
Texas has a large number of residents, more than 3.5 million, who have
started, but not completed, a college degree. Another key motivation
for the establishment of WGU Texas was to increase educational
opportunities for the large number of returning veterans in the State.
The university's learning model is ideal for individuals who have
gained competencies through their military service.
senator hagan
Question 1. The Education Trust, a research and advocacy group that
I am sure you all are familiar with, released a report last summer
titled ``Priced Out: How the Wrong Financial Aid Policies Hurt Low-
Income Students.'' The report examined tuition and graduation rates at
nearly 1,200 4-year colleges. Out of these 1,200 institutions, only 5
were determined to be servicing low-income students well. I am proud to
say that one of these five schools was the University of North Carolina
Greensboro. Additionally, we have several schools, private and public,
committed to ensuring that students, no matter what their economic
background may be, have the option to receive a college education.
How do we change the mentality of ALL institutions of higher
education, to ensure that college is a realistic option for the lowest
income Americans, not just a select few?
Answer 1. One of the major challenges comes from the fact that
educational prestige is determined by rankings like those published by
U.S. News & World Report, which are focused on selectivity (how few
students an institution admits) and low student-to-faculty ratios.
Using these criteria as measures of quality actually drives costs up
and access down.
The United States needs to find a way to recognize and reward
institutions for reducing costs and expanding access to higher
education, particularly access for low-income Americans. The majority
of U.S. institutions of higher education are focused on providing
quality education, and overall, they do this very well. However, to
make college affordable for all Americans, we must find ways to
significantly increase the productivity of our colleges and
universities without sacrificing quality. Efforts to cut costs by
streamlining administrative processes, reducing facility costs, and
other simple savings measures will not be enough. We must re-think the
way we look at higher education and make fundamental changes, including
adopting new models.
In almost every other industry, new technology has resulted in
improved productivity and lower overall cost, but in higher education,
technology has largely been treated as an additional cost. This needs
to change, and to make this change, we have to be open to new methods
for teaching and learning. From the university's inception, a key
element of the WGU mission has been to help promote new learning models
in U.S. higher education. As the university continues to grow and
demonstrate the efficacy of our competency-based model, we hope to
encourage other institutions to consider models similar to ours.
senator murray
Question 1a. Dr. Mendenhall, you have received accolades for your
work to improve student educational experiences. I have always believed
it is important to make education accessible to all students, so I
commend you for your efforts to improve distance education
opportunities.
Please talk about the work that went into developing WGU's
competency-based learning model.
Answer 1a. When our founding Governors conceived WGU in the mid-
1990s, their objective was to find ways to use technology to improve
the productivity and accessibility of higher education. They chose to
create a new model for higher education, one that would address the
needs of adult learners. We know two things about adult learners: they
come to college knowing different things, and they learn at different
rates. Rather than requiring these adult learners to spend 4 months in
each class, regardless of their prior education and experience, the
founders wanted to create a model that would allow students to earn
their degrees based on learning, not time. The competency-based model
created for WGU allows students to move quickly through material they
already know so they can focus on what they still need to learn. As a
result, students have the opportunity to accelerate, saving time and
money--the average time to complete a bachelor's degree at WGU is 30
months.
Another key objective in the development of WGU was to ensure that
degree programs address the needs of employers. For each degree
program, WGU established external program councils, composed of
representatives from industry and higher education, to develop required
competencies. By creating these program councils, WGU has ensured that
its students graduate with the knowledge and skills employers need. In
addition to establishing competencies when new degree programs are
created, WGU uses program councils to conduct regular reviews, ensuring
that the programs are up-to-date and continue to address employer
needs.
It is also important to note that WGU's model was structured from
the beginning to use technology to facilitate learning. While most
online universities simply use technology to distribute classroom
education--classes led by an instructor with a fixed schedule and
syllabus--WGU's model significantly changes the role of the faculty.
Technology provides interactive instruction that allows students to
learn at their own pace, and the role of the faculty has shifted to
that of ``a guide on the side'' rather than the traditional ``sage on
the stage.'' Grading for WGU courses is done by a separate team of
evaluators. WGU faculty members serve as mentors whose sole focus is to
provide individualized support and guidance to students.
Question 1b. Is the model reviewed and revised if new data and
research is released?
Answer 1b. From its inception, WGU has used data to identify what
is working well and what needs to be adjusted in its model. Over the
years, WGU has made a number of changes and revisions based on data
that measure student/graduate success and satisfaction, employer
satisfaction, and student engagement. For example, we have developed
and adjusted the role of our faculty mentors, changed and upgraded our
student support services, and modified many of our learning resources
and assessments. As a result, in the past 4 years, WGU's 1-year
retention rate has increased from 64 percent to 78 percent and the
percentage of students achieving satisfactory academic progress has
increased from 69 percent to 83 percent. We will continue to use data
to guide improvements to our model, using student outcomes as the
primary indicator of success.
Question 2. When you mentioned that WGU students receive a higher
level of support, what do you mean by this? Are you referring to
support in terms of staff, financially, or both?
Answer 2. WGU students do receive a higher level of faculty
support. Our mentors work with each student one-on-one, meeting by
telephone at least every other week, and communicating much more often
through e-mail and online chats. In addition, students have the
individualized support of course mentors, subject matter experts who
can answer questions, lead online group discussions, and even provide
tutoring if needed. Our scores on the National Study of Student
Engagement (NSSE), which are above the average of all institutions in
areas such as level of academic challenge, quality of academic
advising, supportive environment, and overall educational experience,
demonstrate that our students believe they receive a higher level of
support.
With regard to financial support, WGU works closely with our
students to help ensure that if they borrow money to attend college,
they borrow only what they need. Our default rate, which is currently
4.9 percent, is comparable to that of many traditional universities. In
addition, we award need-based scholarships--since July 1, 2010, we have
awarded nearly $7 million.
Question 3. How do you think the WGU model can be scaled up at
other institutions across the country? What would be the barriers to
developing similar institutions?
Answer 3. A few institutions are considering adopting parts of the
WGU model--particularly our mentoring and the use of technology to
facilitate learning. However, current business models and academic
traditions make it difficult for existing institutions to really
transform themselves. For example, to implement significant aspects of
the WGU model, these institutions would need to change faculty roles as
well as academic calendars.
In ``Disrupting College,'' Harvard's Clayton M. Christensen
describes the issues associated with trying to insert disruptive
innovations into existing business models:
``Plugging a disruptive innovation into an existing business
model never results in transformation of the model; instead,
the existing model co-opts the innovation to sustain how it
operates. What this means is that, generally speaking, the
disruption of higher education at public universities will
likely need to be managed at the level of State systems of
higher education, not at the level of the individual
institutions, which will struggle to evolve. And if private
universities are able to navigate this disruptive transition,
they will have to do so by creating autonomous business
units.''
To develop an entirely new institution like WGU is possible. The
primary barrier is likely to be the time and expense required for any
startup--staffing, systems, and programs--as well as earning
accreditation. The approximate cost to bring WGU to its break-even
point was $40 million. Over the past 20 years, every new institution
has been for-profit, largely because of capital costs. However, for-
profit institutions have different drivers that do not incentivize them
to keep costs to students low.
______
State Board for Community & Technical Colleges (SBCTC),
Olympia, WA,
February 29, 2012.
Hon. Tom Harkin,
731 Hart Senate Office Building,
Washington, DC 20510.
Hon. Mike Enzi,
379A Senate Russell Office Building,
Washington, DC 20501.
Dear Chairman Harkin, Ranking Member Enzi, and members of the
Committee on Health, Education, Labor, and Pensions, it was an honor
testifying before you on February 2 about the innovative ways we're
working to keep college affordable at Washington's community and
technical colleges. Here are our responses to the insightful questions
of HELP committee members.
I welcome any opportunity to discuss this important issue with you.
Please contact me if you need further information. Your observations
and questions add to the national dialog about the vital role of
community and technical colleges in America's economic recovery. Thank
you.
Sincerely,
Charles N. Earl.
______
Responses to Questions of Senator Enzi, Senator Hagan,
and Senator Murray by Charles N. Earl, M.A., B.A.
senator enzi
Questiion 1. What types of partnerships have you forged with
private industry in Washington? I'm particularly interested in hearing
about what Walla Walla Community College is doing that has attracted so
much national praise.
Answer 1. In Washington State and across the Nation, community and
technical colleges forge partnerships with local land regional business
leaders and their employees to offer top-notch, job-relevant programs.
Our colleges join forces with local chambers of commerce, business and
labor organizations, workforce development councils, and businesses of
every size and type that make up their communities.
Through Washington's Job Skills program, for example, colleges work
directly with employers to provide short-term training customized for a
specific employer. This dollar-for-dollar matching grant helps
businesses build and retain a quality workforce. Employees in the
program learn marketable skills that lead to raises and promotions;
businesses gain skilled employees who need less on-the-job training and
who sharpen the businesses' competitive edge. In 2010-11, Washington
State community and technical colleges and local businesses
participated in 34 Job Skills partnerships.
Community and technical colleges serve small businesses in
partnership with the U.S. Small Business Administration. Seven colleges
host Small Business Development Centers that provide advice, training
and research to new and existing firms.
Many of our community and technical colleges also partner with both
union and non-union training organizations to provide apprenticeship
programs. Students get on-the-job training from journey-level craft
persons or trade professionals, and receive supplemental classroom
instruction from the colleges. In 2010, these programs served 13,790
apprentices.
Importantly, every college professional-technical education program
has an advisory committee made up of leaders, workers, and labor
representatives in the field of study. These committees keep college
leaders and faculty up-to-date on industry and workforce needs,
employment forecasts, industry trends, and new technologies and
equipment. Faculty members consult industry for ``on the ground''
skills and experience, and then use their knowledge to build and update
curricula.
Following are a few examples of the partnerships in Washington
State.
Walla Walla Community College: Walla Walla Community
College is an excellent example of how college-business partnerships
grow regional economies from the ground up. In December, Walla Walla
Community College was named one of the top five community colleges in
the Nation by the Aspen Institute. The college was named a ``finalist
with distinction'' for developing visionary programs that create jobs
and boost economic development. The college was also recognized for
achieving graduation and transfer rates that are much higher than the
national average.
President VanAusdle of Walla Walla Community College often refers
to the ``Walla Walla way''--a set of values focused on innovation,
entrepreneurship and partnership with the local community. The college
looks through an ``economic lens,'' developing programs in current and
future high-demand fields and solving economic challenges.
For example, Walla Walla hosts a $6.8 million Water and
Environmental Center funded by the U.S. Department of Commerce, Pacific
Power Blue Sky Renewable Energy, Port of Walla Walla, Walla Walla
County, and the Confederated Tribes of the Umatilla Indian Reservation.
The center formed an alliance in the community on a contentious issue
statewide--how to use water and still protect watersheds for the
benefit of people, farms, fish and wildlife. The center brought
together State and local governments, tribal leaders, businesses,
environmental organizations, and farmers to reach an agreement. By
protecting the local watershed, the alliance is creating jobs,
protecting salmon and steelhead runs, and supporting sustainable
agriculture. Students are trained for careers in the local water and
environmental workforce, including wind-energy technology.
Walla Walla Community College also created a Center for Enology and
Viticulture, an economic driver for the local wine and tourism
industry. Additionally, the college has a longstanding partnership with
the John Deere Company to provide heavy equipment training for
agribusiness.
Bellingham Technical College obtained $95,000 in Federal
funding to develop a targeted training program for potential new
employees for Heath Tecna, a local aerospace company. The college
secured the funding through a partnership with 10 organizations: Heath
Tecna, Northwest Workforce Council, Washington State Department of
Commerce, Northwest Economic Council, Impact Washington,Worksource
Whatcom Career Center, Washington State Employment Security Department,
Manpower, Kelly Services, and the Bellingham Waterfront Innovation
Partnership. This program is an essential part of a larger effort
projected to create 400 new jobs and bring $40 million in new export
business to Whatcom County.
Edmonds Community College operates the Washington
Aerospace Training and Research Center at Paine Field. Opened in 2010,
the center is built to create career opportunities in the aerospace
industry. Students learn skills for entry-level I aerospace jobs in 12
weeks. From the time the center opened in 2010 to September 2011, 357
students had graduated and 324 of those students interviewed with local
employers. Two-hundred and thirty two graduates reported to work as
union aircraft assembly workers.
Bellevue College's district includes the headquarters of
Microsoft and many other high-tech companies. The college is home to
the Center of Excellence in Information and Computing Technology, a
statewide resource for information technology education and training,
best practices, industry trends, and career events. ``Centers of
Excellence'' are lead colleges that focus on building job skills for
strategic industry sectors--like information, aerospace, and
international trade. The Centers of Excellence develop industry-
specific curricula and share it throughout the State system so colleges
avoid duplicating efforts and employers have one place to go for
curricula redesign. Bellevue College also has a strong connection to
local healthcare employers, which provides the bedrock for academic and
professional development programs in the region.
Question 2. In what ways are you responding to declining State
funding?
Answer 2. State funding for Washington's community and technical
colleges has dropped sharply in the past few years because of declining
State revenues. Since 2009, State funding for community and technical
colleges has fallen by 22 percent.
Community and technical colleges have weathered the cuts by
reducing costs, squeezing every savings out of an already efficient
system, and--regretfully--shifting more of the burden on students in
the form of tuition increases.
Efficiencies include:
Statewide purchases of technology for education delivery
and online meetings.
Thirty-two shared professional and technical programs
among colleges. These shared programs typically have one institution
delivering course content to multiple colleges.
Hybrid classes, which involve a mix of online and
classroom instruction. Colleges maximize limited classroom space and
students make fewer trips to campus.
A robust e-tutoring consortium for colleges and their
students to share tutors across courses and institutions 7 days a week.
A nationally recognized, performance-based funding system
that rewards colleges when more students reach key academic milestones,
including the completion of certificates and degrees.
Ten ``Centers of Excellence,'' including: Information and
Computing Technology; Clean Energy; Aerospace and Advanced Materials
Manufacturing; Education; International Trade, Transportation and
Logistics; Homeland Security; Construction; Marine Manufacturing and
Technology; Agriculture; and Allied Health. (Please see ``Bellevue
College'' section for a description of Centers for Excellence.)
Washington is ranked 4th in the Nation in productivity (performance
relative to funding) by the National Commission of Higher Education
Management Systems. While efficiencies help save money, they cannot
replace lost State funding. Between June 2009 and June 2011, colleges
cut:
250 exempt positions (10 percent), including 70
administrators and 181 professional technical personnel.
150 classified positions (3 percent).
75 full-time faculty (2 percent).
The colleges first cut administrative costs to shield students as
much as possible; however, students are now feeling the impact of
reduced course offerings, long waiting lists for classes, and higher
tuition. Individual courses and entire programs have been eliminated.
Loss of State funding has also put more of the financial burden on
students. Tuition has increased nearly 30 percent since 2008--from
$2,730 to $3,542 for a full-time student. Washington State has a strong
network of financial aid for students, but that network is fraying with
each cycle of budget reductions.
senator hagan
Question 1. The Education Trust, a research and advocacy group that
I am sure you all are familiar with, released a report last summer
titled ``Priced Out: How the Wrong Financial Aid Policies Hurt Low-
Income Students.'' The report examined tuition and graduation rates at
nearly 1,200 4-year colleges. Out of these 1,200 institutions, only 5
were determined to be servicing low-income students well. I am proud to
say that one of these five schools was the University of North Carolina
Greensboro. Additionally, we have several schools, private and public,
committed to ensuring that students no matter what their economic
background may be, have the option to receive a college education. How
do we change the mentality of ALL institutions of higher education, to
ensure that college is a realistic option for the lowest income
Americans, not just a select few?
Answer 1. According to the Education Trust report, only 5 out of
1,200 4-year colleges and universities serve low-income students well.
The report also found that low-income students' families contribute 72
percent to 100 percent of their household income each year for one
child to attend a university-after grant aid. Middle-income and higher
income families, on the other hand, pay a much lower percentage of
their household incomes--27 percent and 14 percent respectively. The
criteria used to examine college low-income enrollment patterns
included:
Percentage of enrolled low-income students that is equal
to or greater than national low-income population (30 percent).
Family household contribution to college after grant aid
which should be no more than a middle-class family contribution (27
percent).
Graduate rates of at least 50 percent.
As a community and technical college State director, I admit to
some level of bias in this response. Community and technical colleges
embody the type of change needed in America's higher education system.
We provide an affordable option for citizens to train or retrain for
careers, earn work-relevant certificates and degrees, and complete the
first 2 years of a 4-year degree at a much lower cost. Importantly,
community and technical colleges offer Basic Skills programs, which are
a major entry point to college education for low-income students.
(Basic Skills programs include English as a second language, adult
literacy, and high school completion.)
America's community and technical colleges serve more than 7.4
million certificate and degree seeking students. We serve a larger
proportion of low-income students and students of color than other
institutions. Nationally, community and technical colleges serve
students who are:
Older--average age of 28 years.
First generation to attend college--42 percent.
Ethnically diverse--45 percent people of color.
Working while attending college--80 percent work while
attending college full-time.
In Washington State, about half of the community and technical
college students are low income and receive financial aid. These low-
income students have minimal estimated family contribution as
determined by the Free Application for Federal Student Aid (FAFSA) and
qualify for Pell grants. Washington State is able to support students
beyond the Pell grant with a State Need grant. The student aid award
from both Federal and State sources typically covers 75 percent of
students' total cost of attendance, which includes tuition and fees,
books, supplies, transportation, and living expenses. The remaining 25
percent is made up with employment earnings and student loans.
Approaches to consider:
Increase enrollment capacity at community and technical
colleges. This will automatically expand higher education opportunities
for low-income students because the colleges offer a high quality
education at a fraction of the cost of 4-year institutions.
Increase higher education and financial aid funding, and
reverse the trend of shifting education costs onto students. With
revenue downturns and cuts in State funding, higher education is moving
from a public investment made ``for the good of the all'' to a purchase
by the select few who can afford it. Preserving and increasing
financial aid is a critical way to increase degrees for low-income and
underrepresented populations.
Change financial aid policies that specifically hinder
community and technical college students. Financial aid guidelines
assume that all college students are 18-year-old high school graduates
who have taken all of the correct college preparation courses, and who
are attending a university with the expectation of graduating in 4
years. This type of student is quickly becoming the exception.
Financial aid policies must support pre-college education for returning
adult students. New Pell grant eligibility rules require a GED or high
school diploma, eliminate the ``ability to benefit'' option, and
shorten the number of quarters allowed for students to receive aid.
These changes make it especially difficult for a returning adult
student to attend a community or technical college. We would appreciate
the opportunity to work with you to modify the rules and level the
playing field for community and technical college students.
Provide an admissions guarantee for students who transfer
from a community or technical college to a 4-year college or
university. In Washington State, we have a direct transfer agreement
with all public 4-year colleges and universities. The agreement
guarantees transfer students who attain an associate degree will enter
the transfer institution at the junior level.
Encourage faculty and administrators to see the potential
of all students to earn a certificate or degree, and implement teaching
strategies to accommodate non-
traditional learners. Washington State has more than 170 Integrated
Basic Education Skills Training programs (I-BEST) and 39 accelerated
learning pilot programs that integrate pre-college English and Math
into job skill programs. Students enrolled in these programs are nine
times more likely to earn a college credential than students enrolled
in traditional pre-college courses.
A 4-year degree is becoming increasingly out-of-reach for middle-
income American families. Community and technical colleges offer an
affordable option for students of all economic backgrounds to achieve
the first 2 years of their 4-year degrees.
senator murray
Question 1. In your testimony, you discuss the increased
challenges that community and technical colleges have faced over the
past decade in light of tightening State budgets. Could you provide
your insight on how expanded partnerships and collaborations with other
organizations and institutions could help make college tuition more
affordable for students?
Answer 1. Local colleges form valuable partnerships to reduce
student costs, including raising funds for local scholarships, working
with local employers on employee tuition reimbursement, and contracting
with regional workforce investment boards on financial aid for
unemployed adults. As a State system of community and technical
colleges, we're able to collaborate with government agencies, employer
groups, and colleges statewide to bring cost-savings to students at all
34 community and technical colleges.
K-12/Running Start: Washington's Running Start program
allows high school juniors and seniors to attend tuition-free classes
at community colleges. The students not only earn credit toward high
school graduation, they also earn credit toward an associate degree or
a bachelor's degree. Last year (2010-11), 19,000 high school students--
or roughly 10 percent of the State's junior and senior class--earned on
average two full quarters of college credit, saving families across the
State $41 million in college tuition.
Open textbooks: The Open Course Library is a collection of
expertly developed educational materials for 42 of the State's highest-
enrolled college courses. The materials--including textbooks, syllabi,
activities, readings, assessments--cost $30 or less per student and are
freely available online under an open license for use by the State's 34
public community and technical colleges, 4-year colleges and
universities, and anyone else worldwide. The project is set to expand
to 81 courses by 2013. The course content and open textbooks were
designed and selected by small groups of expert faculty but are
available for adoption by their faculty colleagues throughout the State
college system and across the Nation. We expect textbook savings for
students to grow by millions of dollars each year as more faculty test
and adopt these open textbooks.
State agencies: The State Board for Community and
Technical Colleges (SBCTC) and other State agencies collaborate to
leverage college funds for people who use Federal and State income
support while they are unemployed. SBCTC has a single, $20 million
statewide contract with the State Department of Social and Health
Services to provide education and training for TANF recipients
(Temporary Assistance for Needy Families), so that the recipients can
gain credentials and job skills to become employed. Through a
collaboration with the State Employment Security Department, adults who
receive unemployment benefits are referred to colleges for retraining
programs and tuition and book assistance worth $40 million.
State Chamber of Commerce: SBCTC has a modest contract
with the Association of Washington Business to build partnerships
between colleges and employers. Last year, we held focus groups with
business leaders in five regions around the State to identify
expectations, opportunities, and potential partnerships with local
businesses. Business leaders expressed a strong desire to expand
college partnerships to increase the supply of skilled workers. We are
now organizing regional employment summits to identify skill gaps in
specific regions and to inventory available training resources. We are
confident this effort will yield more loaned employees, faculty and
student internships, equipment and technology exchanges, contract
training, and employer-paid tuition assistance.
These partnerships provide resources for many of our citizens;
however, none can take the place of Federal and State investment in our
colleges, citizens and workers.
We appreciate your continued interest in Washington State's
community and technical colleges, and your dedication to improving
prosperity in America through higher education.
[Whereupon, at 12:40 p.m., the hearing was adjourned.]