[Senate Hearing 108-376]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-376
 
PROMOTING ACCESS TO POSTSECONDARY EDUCATION: ISSUES FOR REAUTHORIZATION 
                      OF THE HIGHER EDUCATION ACT
=======================================================================



                                HEARING

                               BEFORE THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                                   ON

      EXAMINING ACCESS TO POSTSECONDARY EDUCATION IN RELATION TO 
 REAUTHORIZING THE HIGHER EDUCATION ACT, FOCUSING ON THE RELATIONSHIP 
       AMONG QUALITY, EFFICIENCY, AND ACCESS TO HIGHER EDUCATION

                               __________

                            OCTOBER 16, 2003

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions




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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                  JUDD GREGG, New Hampshire, Chairman

BILL FRIST, Tennessee                EDWARD M. KENNEDY, Massachusetts
MICHAEL B. ENZI, Wyoming             CHRISTOPHER J. DODD, Connecticut
LAMAR ALEXANDER, Tennessee           TOM HARKIN, Iowa
CHRISTOPHER S. BOND, Missouri        BARBARA A. MIKULSKI, Maryland
MIKE DeWINE, Ohio                    JAMES M. JEFFORDS (I), Vermont
PAT ROBERTS, Kansas                  JEFF BINGAMAN, New Mexico
JEFF SESSIONS, Alabama               PATTY MURRAY, Washington
JOHN ENSIGN, Nevada                  JACK REED, Rhode Island
LINDSEY O. GRAHAM, South Carolina    JOHN EDWARDS, North Carolina
JOHN W. WARNER, Virginia             HILLARY RODHAM CLINTON, New York

                  Sharon R. Soderstrom, Staff Director
      J. Michael Myers, Minority Staff Director and Chief Counsel

                                  (ii)











                            C O N T E N T S

                               __________

                               STATEMENTS

                            OCTOBER 16, 2003

                                                                   Page
Gregg, Hon. Judd, a U.S. Senator from the State of New Hampshire.     1
Alexander, Hon. Lamar, a U.S. Senator from the State of Tennessee     5
Waldner, George W., President, York College of Pennsylvania, York 
  PA; Jamie P. Merisotis, President, The Institute for Higher 
  Education Policy, Washington, DC; Shane Hollett, Executive 
  Director, Ohio College Access Network, Cleveland, OH; and Troy 
  Lambert, student, University of Maryland, College Park, MD.....     8

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    George W. Waldner............................................    33
    Jamie P. Merisotis...........................................    35
    Shane Hollett................................................    40
    Troy Lambert.................................................    42
    Hector Garza.................................................    44
    Letter to Health, Education, Labor, and Pensions, dated Oct. 
      16, 2003, from David L. Warren.............................    46
    American Association of Community Colleges...................    47
    American Council on Education................................    51

                                 (iii)

  














PROMOTING ACCESS TO POSTSECONDARY EDUCATION: ISSUES FOR REAUTHORIZATION 
                      OF THE HIGHER EDUCATION ACT

                              ----------                              


                       THURSDAY, OCTOBER 16, 2003

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:58 a.m., in 
room SD-430, Dirksen Senate Office Building, Senator Gregg 
(chairman of the committee) presiding.
    Present: Senators Gregg, Enzi, Alexander, Reed, and 
Clinton.

                   Opening Statement of Senator Gregg

    The Chairman. We are going to start the hearing since 
everybody is here except for some of my colleagues, and I 
understand that some are coming, some are not. There is a lot 
going on today with the floor activity. So I think I will give 
my opening statement now, and then it will be 10 o'clock, and 
we can start the hearing.
    Today's hearing will explore an issue of great importance 
to students and families throughout the Nation, and that is 
promoting access to higher education. A college education is 
now the key to a good job for millions of Americans, and it is 
key to the competitiveness of our Nation generally.
    Over the course of a lifetime, the average college graduate 
earns about $1 million more than someone who has not had the 
chance to attend college. Our Nation's productivity and the 
quality of life that benefits us are tremendously affected by 
our capacity to have people pursue higher education.
    In addition to the efforts of students, their families, 
State governments and institutions themselves, the Federal 
Government clearly has a significant role in higher education. 
The recent record of Federal Government participation I believe 
has been a good one.
    For example, the Pell Grant maximum has increased 64 
percent, and since 1996, the actual funding for Pell Grants has 
increased by over 148 percent. There are now 1.4 million more 
Pell recipients today than there were in 1996, a 39 percent 
increase.
    Today the student loan interest rate is the lowest it has 
ever been. The Stafford loan interest rate stands at 3.42 
percent. These low interest rates have made it easier for 
millions of students to go to college and to pay back the loans 
that they have used to pursue their college education.
    The upcoming reauthorization of the Higher Education Act is 
a core piece of legislation which we have to address in this 
committee and which the Congress has to address, and it needs 
to work on the issues of how we make education more affordable 
and more accessible to Americans.
    Of course, whether someone has access to college depends on 
many factors, not just Federal assistance. Important factors 
are the level of tuition and the fees set by colleges. 
According to the latest figures from CRS released earlier this 
month, tuition and fees have increased by about two-and-a-half 
times the rate of inflation over the last 20 years. That is a 
staggering rate of increase when you consider the relationship 
with the other activities in American society.
    We have seen these increases in good times, and we have 
seen these increases in bad times. It seems that there is 
nothing that can control the dramatic increase in the rate of 
cost both at public and private institutions. For example, the 
average tuition and fees charged by public 4-year colleges 
increased by 9.6 percent during the 2002-03 academic. Private 
4-year colleges increased by 5.8 percent, and 2-year public 
institutions increased by 7.9 percent.
    Students and their parents experience sticker shock as 
tuition continues to climb, which only discourages students 
from pursuing a postsecondary education and thus undermines our 
competitiveness as a nation and our capacity to give these 
students a better lifestyle.
    According to the Advisory Committee on Student Financial 
Assistance, cost factors have contributed to a situation in 
which 22 percent of college-qualified high school graduates 
today will not attend college at all. This is really 
unacceptable. While tuition goes up and up, and more and more 
students are priced out of a college education, colleges seem 
to be unable to achieve efficiencies in the delivery of 
education.
    A recent New York Times article described how many colleges 
are locked in an arms race to provide questionable perks that 
will lure students to their schools. Some of these perks 
included things like golf course simulators, water parks, and 
hot tubs.
    Cost control efficiencies and productivity are absolutely 
critical if colleges are going to be able to maintain a 
reasonable pricing structure that American students can afford.
    Today we are going to hear from four witnesses who have a 
unique and special perspective on how we should approach the 
affordability of higher education and access. We are very 
fortunate to have these witnesses with us, beginning with Dr. 
George Waldner, who is the president of York College in 
Pennsylvania, which has an exceptional track record for 
maintaining reasonable prices in education. He has set a new 
standard and a standard which hopefully, other schools will 
consider emulating, and we are looking forward to hearing from 
him today to discuss how York College has accomplished these 
goals.
    We are also joined by Jamie Merisotis, who is founder and 
president of the Institute of Higher Education Policy here in 
Washington, and he has addressed numerous issues in the area of 
higher education during his career, including higher education 
financing, student demographics, minority-serving institutions, 
technology-based learning, and government policies, and he has 
some very interesting ideas in the area of how we make higher 
education more accessible.
    We are also joined by Shane Hollett, who is executive 
director of the Ohio College Access Network, which is a very 
unique and creative approach to how we develop community-based 
college access programs supported by public-private 
partnerships. This is an idea which I think we want to expand 
on, and we are looking forward to hearing from him.
    We are also joined by Troy Lambert, who is a student at the 
University of Maryland who has a very compelling story about 
overcoming obstacles so that he could obtain his college 
education. He is the first member of his family to go to 
college, and he will graduate this year, and we are excited to 
hear from Troy and learn about his experiences.
    So we are going to proceed now. We are joined by Senator 
Alexander, who is interested in education, having been the 
Secretary of Education, but also through many, many other 
activities that are well-known, and I will yield to Senator 
Alexander if you want to make an opening statement.
    [The prepared statement of Senator Gregg follows:]

                  Prepared Statement of Senator Gregg

    Today's hearing will explore an issue of great importance 
to students, families, and the nation--promoting greater access 
to higher education. A college education is now the key to a 
good job for millions of Americans. Over the course of a 
lifetime, the average college graduate earns about $1 million 
more than someone with only a high school diploma. Our nation's 
productivity and quality of life benefit tremendously from 
having large numbers of college graduates.
    In addition to the efforts of students and their families, 
state governments, and institutions themselves, the federal 
government clearly has a role to play in promoting access. Its 
recent record has, in my view, been a good one. Since 1996 the 
Pell Grant maximum has increased 64%, total Pell appropriations 
have increased by $7.3 billion (148%), and the number of Pell 
Grant recipients has increased by 1.4 million, or 39%. In 
addition, today's student loan interest rates are at all-time 
lows. The Stafford loan interest rate, available under both the 
FFEL and Direct Loan programs, stands at 3.42%--the lowest it 
has ever been. These low interest rates have made it easier for 
millions of students to take advantage of postsecondary 
educational opportunities.
    The upcoming reauthorization of the Higher Education Act 
(HEA) presents Congress with an opportunity to build on these 
achievements, and improve the student aid programs so that they 
will continue to serve our nation's college students into the 
future. Of course, whether someone has access to a college 
education depends on many factors, not just federal financial 
assistance. One important factor is the level of tuition and 
fees set by colleges.
    According to the latest figures from the Congressional 
Research Service, released earlier this month, tuition and fees 
have increased at about 2.5 times the rate of inflation over 
the last 20 years. We have seen these increases in good times 
and bad, for both public and private institutions. Recent 
trends indicate this problem is only getting worse. According 
to the College Board, for the 2002-2003 academic year, the 
average tuition and fees charged by institutions increased by 
9.6% at public four-year colleges, 5.8% at private four-year 
colleges, and 7.9% at two-year public institutions. Students 
and their parents experience ``sticker shock'' as tuition 
continues to climb, which only discourages students from 
pursuing a postsecondary education. According to the Advisory 
Committee on Student Financial Assistance, cost factors have 
contributed to a situation in which 22% of college-qualified 
high school graduates today will not attend any college at all.
    While tuition goes up and up, and more and more students 
are priced out of a college education, colleges seem unable to 
achieve efficiencies in the delivery of education. For example, 
a recent article in the New York Times reported that many 
colleges are locked in an arms race to provide questionable 
perks that will lure students. Some of these perks include hot 
tubs, a golf course simulator, and a water park. The article 
quotes an analyst from Moody's higher education rating team as 
saying that these perks are driving up the cost of education: 
``[B]y catering to students they're trying to court away from 
other schools, they're making their product more expensive.'' 
Clearly, there is a need for American higher education to 
refocus on the essentials, not the frills. Achieving greater 
efficiency needs to become a priority for colleges, so that a 
quality postsecondary education is available to everyone.
    Fortunately, there are examples of institutions that have 
done this. Today, we have a college president, Dr. George 
Waldner, representing once such institution--York College of 
Pennsylvania. I look forward to hearing about his experiences 
and ideas on this issue. We also have Jamie Merisotis, of the 
Institute for Higher Education Policy here in Washington. He 
too has ideas about the appropriate role of the federal 
government in this area.
    Past efforts to address this issue have not had their 
intended effect. This reauthorization affords us the 
opportunity to take another look at what the appropriate role 
of the Federal Government is in promoting reasonable tuition 
levels and efficiency in higher education.
    Access is also a function of how prepared a student is to 
attend and pay for college. As with financial aid, promoting 
early awareness of what it takes to go to college is a 
collaborative effort among students and their families, 
government, and the private sector. Of course, the federal 
government has two programs that focus on these issues, the 
TRIO and GEARUP programs.
    Perhaps less well known are the growing number of private 
and community-based programs that promote early awareness. 
Today, we will hear from one witness, Shane Hollett of the Ohio 
College Access Network, about some of these programs, and the 
lessons we can learn from them about promoting access to a 
quality postsecondary education.
    Finally, an additional barrier to access is the complicated 
nature of the process by which students apply for federal 
student aid. As the National Dialogue on Student Financial Aid, 
convened by the College Board, recently reported: ``[E]vidence 
suggests that the degree of complication in applying for aid 
leads to reduced access, especially for first-generation 
college students. Increased simplicity in our aid system would 
likely result in significant increases in enrollment rates for 
students from low-income backgrounds.''
    The process of applying for federal financial aid has 
developed over many years, and changing it may not be easy. But 
we owe it to those first-generation and low-income students to 
do something to ease this burden. I look forward to hearing the 
witnesses' thoughts on this subject as well.
    This hearing represents the beginning of the HEA 
reauthorization process here in the Senate. As we move toward 
reauthorization, it is my hope that we can work in a bipartisan 
way to promote access to postsecondary education. I look 
forward to working with my colleagues on both sides toward this 
goal.

                 Opening Statement of Senator Alexander

    Senator Alexander. Thank you, Senator Gregg.
    I appreciate the chairman scheduling this hearing as a way 
of helping us look ahead to the reauthorization of the Higher 
Education Act. He and I share a background as Governors, and 
Governors find that they have a lot to do with higher education 
as time goes on.
    I would like to make these statements, and I will do them 
briefly, and then I look forward to listening to what each of 
you has to say.
    First, one of the greatest success stories of the Federal 
Government has been its relationship with higher education. We 
have done that in basically two ways. One, we have given a lot 
of money to research, most of that to the great research 
universities that we have in America, and as a result, we have 
not only some of the greatest research universities, we have 
almost all of them. We have done that in an orderly way, by and 
large the grants are peer-reviewed, and that has been a great 
success. That research has improved our health care and, since 
World War II, has helped to create about half of all of our new 
jobs in science and technology.
    The other great success story of the relationship between 
the Federal Government and colleges and universities where the 
Federal Government is helping to pay the bill for college 
students. And we have done that in a unique way ever since 
World War II. We have given the money to the students and let 
them choose the college. That started out at a time when, at 
the end of World War II, maybe 5 percent of Americans were 
college graduates, 80 percent of students attended private 
colleges and universities. Among the other effects of Federal 
aid to education which started with the GI bill and then 
through the Pell Grants and the loans that we have today, about 
80 percent of our institutions are public, 20 percent private. 
So it has greatly strengthened our public institutions and has 
created enormous opportunity for Americans and has helped to 
fund many of the best universities in the world.
    The reason I go into all that is because my general 
disposition is this system is a model I would like us to think 
about trying it other places. If allowing the money to follow 
the students to the schools of their choice is a good idea to 
create the best colleges in the world, why don't we try it 
every now and then with creating the best schools in the world?
    So I am going to be skeptical of ideas that create major 
new Federal restrictions on how the Federal Government gives 
its available money to higher education. I like the idea of 
giving it to the students and letting it follow them to the 
schools of their choice.
    The second thing I would like to mention is that there is 
plenty to talk about and, Mr. Chairman, I would like to put 
into the record if I may an article that appeared on August 24 
around the country by Joel Trachtenberg, one of America's 
veteran university presidents, entitled, ``A Case for Year-
Around Education.''
    The chairman and I were talking about that idea yesterday 
on the Senate floor, and we can talk about this later, perhaps, 
during the testimony. Mr. Trachtenberg points out that 
universities typically operate for slightly more than half the 
year, generally, two 14-week semesters, and suggests that at 
George Washington University where he was president, if there 
were a year-around calendar, they could have at least 1,000 
more students, yet fewer students on the campus at any given 
time, and they might offer degrees in 3 years. That would be 
one way to reduce costs and make better use of available funds.
    I hope we hear this morning, and I know we will, about 
distance learning and whether the restrictions that we have on 
distance learning in the Federal laws are still appropriate. I 
hope to hear more about community colleges, which I think are 
our secret weapon because of their flexibility for students.
    We will have our fight over how much to spend--we always do 
that--but we all want to spend more, and we have spent a lot 
more. About half our college students, Mr. Chairman, have their 
bills paid for in part by Federal grants or Federal loans. And 
I hope that sometime in this discussion, we can talk about 
simplifying the application for Federal assistance. I tried to 
do that as Secretary of Education, I am afraid without much 
success. Maybe I can have more success here.
    So I thank the chairman for hosting this--and one other 
thought, Mr. Chairman, as we schedule our hearings. We are all 
concerned about quality, and there are real difficulties with 
trying to think of ways to impose quality from Washington. But 
we might take a look at those agencies which are the gatekeeper 
for quality for us, which are the accrediting institutions 
around America. They have a life and death sentence hanging 
over an educational institution; if an institution is not 
accredited, the students cannot attend with Federal grants or 
loans. That is a terrific problem, and I think part of our 
responsibility is to make sure those accrediting institutions 
are properly functioning and perhaps hearing from them their 
suggestions, and maybe we have some suggestions for them. So 
maybe that would be part of our hearings over the next several 
months.
    Thank you for having the hearing, and I thank the witnesses 
for coming and look forward to what you have to say.
    The Chairman. Thank you, Senator.
    [The prepared statement of Senator Kennedy follows:]

                 Prepared Statement of Senator Kennedy

    I commend our Chairman, Senator Gregg, for calling this 
important hearing as we begin our consideration of the 
Reauthorization of the Higher Education Act. I look forward to 
all of our hearings on this important topic.
    We all agree on the importance of access to higher 
education. We know the importance of this bill. Nearly 60% of 
all college students today rely on these programs, and we can't 
let them down.
    Overall, the most effective way to improve access to 
college is to strengthen K-12 education so that more students 
are graduating from high school with the foundation they need 
for college. We began the education reform debate in the No 
Child Left Behind Act, and we need to continue that debate in 
this reauthorization, to make sure that students in schools are 
taking high quality academic courses with qualified teachers, 
and are also receiving effective information about college 
selection and financial aid. It is disturbing to hear of the 
many students arriving in college who must take remedial 
courses before they can even begin to work toward their college 
degree.
    It is critical in this reauthorization to renew our 
commitment to need-based aid. Over the past 20 years, we have 
seen a total reversal of the grant-loan ratio. Nearly 60% of 
the current federal investment in higher education is now in 
the form of loans, and only 40% in grants. In that same 20 
years, the buying power of the Pell grant, the cornerstone of 
need-based aid, has increased by only 8%, while college costs 
have soared. We need to make sure that students in need who 
have worked hard to get to college will have the financial 
support to complete college, without an impossibly heavy burden 
of debt that distorts their choices of careers and even their 
choices of college.
    We know that hard-working middle class families are making 
greater sacrifices than ever before, so that their children can 
attend college. For families who must rely on loans to make the 
dream of college a reality, we owe them the best federal loan 
program possible. That means making sure they are offered the 
lowest rates on college loans and the highest benefits when 
they begin repayment.
    The college application process often gets attention, but a 
long-neglected problem we need to deal with more effectively in 
this reauthorization is college retention and college 
graduation rates. Overall, only 51% of students in the current 
four-year college curriculum manage to graduate in six years. 
For minorities, the figure is worse. We need a reauthorization 
that helps level the playing field.
    A graduate of a four year college today earns an average of 
$22,000 a year more than a person with only a high school 
diploma. That's a $1 million dollar difference in lifetime 
earnings, a disparity like that in our society today is unfair 
and unacceptable.
    Just as Social Security is a promise to every senior 
citizen, we should make ``Education Security'' a promise to 
every student. If you work hard, if you finish high school, if 
you are admitted to a college, we should guarantee that you can 
afford the cost of the four years it takes to earn a college 
degree. Surely, we can say it and mean it today--cost should 
never again be a disqualification for college.
    I join in welcoming our distinguished witnesses today, and 
I look forward to their testimony. This reauthorization will be 
one of the major achievements of this Congress, and I'm very 
hopeful that it will be a major bipartisan achievement as well.
    The Chairman. Now let us hear from the witnesses. We will 
start with Dr. Waldner and move left to right from my 
standpoint, right to left from your standpoint.
    We look forward to hearing your input, Dr. Waldner.

  STATEMENTS OF GEORGE W. WALDNER, PRESIDENT, YORK COLLEGE OF 
  PENNSYLVANIA, YORK, PA; JAMIE P. MERISOTIS, PRESIDENT, THE 
 INSTITUTE FOR HIGHER EDUCATION POLICY, WASHINGTON, DC; SHANE 
   HOLLETT, EXECUTIVE DIRECTOR, OHIO COLLEGE ACCESS NETWORK, 
    CLEVELAND, OH; AND TROY LAMBERT, STUDENT, UNIVERSITY OF 
                   MARYLAND, COLLEGE PARK, MD

    Mr. Waldner. Good morning, Mr. Chairman, and good morning, 
Senator Alexander. I am pleased to have the opportunity to be 
here today to discuss with you an important issue in the field 
of higher education, namely, the relationship among quality, 
efficiency, and access.
    I feel qualified to speak on this subject because my 
institution has managed for many years to combine attention to 
quality with careful cost control and, by doing so, to become 
an outstanding value in higher education.
    We are an independent college. Tuition for this academic 
year is $8,000. The comprehensive package including tuition 
fees and room and board comes to $14,500 for the year.
    We are priced at about 60 percent of the charges levied by 
comparable independent colleges and at about the same price as 
State-related colleges and universities in Pennsylvania, which 
are subsidized about $4,500 per student.
    But value has two parts--price and quality. York College is 
in the top third of the U.S. News ranking of Northern 
universities, a ranking based purely on program quality. We are 
in the directories titled ``The Best Middle Atlantic Colleges: 
98 Great Schools to Consider,'' as well as ``Barron's Best 
Buys'' and others.
    Jay Mathews of The Washington Post included York College in 
his list of ``20 Undiscovered Gems'' in his April 2003 article 
in The Washington Post Magazine. York College, at $14,500, was 
number 10 on the list of 20. The number nine college charges 
$33,710; number 11, $29,750.
    I believe York College represents access to high quality at 
a price within the reach of most American families when 
combined with Federal, State, and institutional aid programs.
    Efficiency is not a dirty word at York College, but 
efficiency is viewed as a suspect concept in most of American 
higher education. Why is that the case?
    In the normal course of institutional life in academia, 
there is a constant and passionate focus on qualitative 
improvement. That is clearly desirable and highly consistent 
with the overall mission of higher education. What is much less 
prevalent, however, is the concomitant, vigorously advocated 
concern to attain educational quality in a highly cost-
efficient way.
    There is an apparent tendency among members of the academy 
to believe that any effort to control or to reduce costs will 
necessarily take a more than proportionate toll in terms of 
program quality.
    In short, there is a denial of the concept of efficiency--
the ability to produce a desired outcome with a minimum of 
expense and waste. This attitude makes the championing of cost 
control on college campuses a lonely and unpopular crusade, the 
dreary business of deans and chief financial officers.
    It is important, however, for college communities as a 
whole to adopt a positive, proactive approach to cost control 
in order to preserve access to higher education opportunities 
for all qualified students. Federal and State financial aid and 
subsidies as well as institutional aid, though essential for 
student access, must receive more of a helping hand from those 
who are directly engaged in operating higher education 
institutions.
    I was pleased to be a member in 1997-1998 of the National 
Commission on the Cost of Higher Education. The Commission put 
forward as its first recommendation, and I quote, ``That 
academic institutions intensify their efforts to control costs 
and increases institutional productivity.'' The Commission then 
went on to make a series of recommendations on how to implement 
its call for enhanced cost control.
    The first implementing recommendation was: ``Individual 
institutions, acting with technical support from appropriate 
higher education associations, should conduct efficiency self-
reviews to identify cost-saving steps that are relevant to 
institutional mission and quality improvement.''
    Sine 1998, good foundational steps have been accomplished 
to enable institutions of higher education to carry out in a 
meaningful way the Commission's challenge. In particular, the 
National Association of College and University Business 
Officers, acting as part of a consortium of national higher 
education organizations, has developed an approach to the 
analysis of college costs which is adaptable to the wide 
variety of higher education institutions. The approach or model 
has been field-tested and is ready for widespread use.
    My basic idea is that a ``quality-efficiency task force'' 
should be formed at each institution. Its members should 
include faculty, administrators, students, trustees, parents, 
alumni, and business community leaders. The group should 
develop data on institutional costs in comparison with the 
costs at peer institutions. And may I emphasize the notion of 
``peer institutions'' is crucial here, because it is simply not 
helpful to compare costs at dissimilar types of institutions.
    Every college and university has a self-selected group of 
peer institutions that it uses for comparisons and benchmarking 
for salaries, admission standards, etc. The idea is to use the 
same peer group for its analysis of operating costs. Such an 
analysis should identify areas where a given institution 
underperforms its peers, that is, operates more expensively to 
produce a similar result. These areas should then be targeted 
for in-depth analysis for cost reduction opportunities.
    It is necessary to add at this point that college 
communities usually focus on areas other than instruction when 
searching for cost savings. Again, the tendency is to assume 
without investigation that any attempt to enhance instructional 
productivity will have devastating effects on program quality.
    Yet at most institutions, instruction is where most of the 
expenditures are. It is thus where most of the cost savings are 
likely to be discovered. Over the years, I have developed a 
``quality instruction efficiency index,'' which I append at the 
end of my testimony, that seeks to find the golden mean between 
excessive and insufficient expenditures in the delivery of 
instruction. The areas of focus are the faculty-student ratio, 
semester hours of required teaching per academic year, 
utilization of part-time faculty, maximum section size and 
minimum section size.
    Only by careful analysis and control of these instructional 
features can most colleges and universities find substantial 
cost savings. The major savings are not to be found in pooled 
purchasing, outsourcing, or inter-library loan, although these 
areas should be reviewed for savings, too.
    Given the follow-up on the National Cost Commission's 
recommendations accomplished since the last reauthorization, an 
appropriate role for the Federal Government in the context of 
the current reauthorization would be to require colleges and 
universities to confirm that they are conducting such 
efficiency self-reviews and are developing action steps for 
attaining greater efficiency. The tools for this sort of 
exercise are in being; the public interest in cost control to 
preserve access is clear.
    Colleges and universities must now move forward decisively 
with greater cost control efforts, or else face highly 
interventionist and probably counterproductive governmental 
measures in the not-too-distant future.
    Thank you.
    The Chairman. Thank you very much, Dr. Waldner. Your 
testimony is very specific, and very useful. I appreciate that.
    [The prepared statement of Mr. Waldner may be found in 
additional material.]
    The Chairman. Mr. Merisotis?
    Mr. Merisotis. Mr. Chairman, Senator Alexander, thank you 
very much for the opportunity to appear before you.
    As president of the Institute for Higher Education Policy 
for the last decade, I have had the opportunity to devote a 
considerable amount of time and analytic resources to the 
questions that confront this committee with regard to the 
reauthorization of the Higher Education Act. I hope that our 
independent, nonpartisan perspective will be helpful as you 
sort through the array of issues and concerns regarding this 
crucial law.
    As Senator Alexander noted, improving access to higher 
education continues to be one of the most important 
contributions that the Federal Government can make to our 
national well-being. The simple fact remains that increasing 
educational opportunities for all Americans results in 
tremendous public, private, social, and economic benefits.
    I recognize that the Nation faces an uncertain economic 
future, one that places constraints on policy discussions such 
as these, but I hope you will not lose sight of the long-term 
effects that your investments will have on the Nation.
    While greater investment is clearly needed, I do not 
believe that more funding is the only thing that is needed. My 
testimony offers a broad set of ideas to promote access to 
postsecondary education, and I would like to briefly summarize 
those in four points.
    First, I urge you to invest in need-based student aid as 
the best and most important way to promote access to 
postsecondary education. The maximum Pell Grant today pays for 
about one-half of the average price of attending a public 4-
year institution compared to 1980, even taking into account the 
funding increases of the last few years. Increased support for 
the Pell Grant program therefore should be a centerpiece of 
your efforts to enhance the programs and policies of the Higher 
Education Act.
    At the same time, I know that you are facing increasing 
pressures to simultaneously increase loan limits while also 
reducing the potential negative effects of increasing student 
debt. One way to meet these seemingly divergent goals is to 
increase loan limits modestly, especially for first- and 
second-year students, while also developing new opportunities 
for loan forgiveness.
    While I have been skeptical of current loan forgiveness 
policies because of their limited size and scope, I believe 
that a larger-scale loan forgiveness program tied specifically 
to areas of national need, especially areas where there is an 
underrepresentation of minorities and low-income populations, 
such as science, math, minority health and teaching, could make 
a real difference in reducing debt while also increasing 
opportunity.
    Second, I urge you to reject attempts to control rising 
prices through penalties that will harm both institutions and 
students but consider incentives to promote institutional 
innovation and sound financial management.
    Rising prices are a legitimate concern for students and 
families, especially those from the lowest income levels, but 
rising prices are part of a complex array of factors and 
processes that reflect a diversity of institutions and 
perspectives. While I believe many institutions and States can 
and should do more, it is clear that no one-size-fits-all 
solution will work across the Nation. This is one reason why I 
think that Federal attempts to control the prices charged by 
institutions are unwise and potentially destabilizing. In my 
view, Federal price controls represent an unprecedented attempt 
to regulate a competitive market, one that would require a 
fairly large bureaucratic machinery to monitor the pricing 
behavior of institutions and overrule the decisions of 
independent boards of trustees, State legislatures, and 
coordinating boards.
    The fact remains that efforts to penalize institutions for 
prices above some federally-determined level would need to use 
a big enough stick to cause a change in behavior. The only 
stick large enough would be the need-based student aid 
programs. So attempts to penalize institutions would instead 
have a negative effect on the very students for whom the 
programs were designed to help.
    On the other hand, there are ways in which you could create 
positive incentives for institutions to do a better job of 
managing their financial operations and controlling costs, such 
as through a FIPSE-type competitive grant program that 
encourages institutional innovation, and through greater 
transparency of information. It also would be possible to 
create incentives via the Federal campus-based student aid 
programs. Since these programs are more closely linked to 
institutional decisionmaking, it may be worth considering 
certain performance bonus criteria under these programs--for 
example, institutional allocations could be enhanced via a 
supplement for institutions that improve or maintain their cost 
efficiency.
    Third, I urge you to strengthen the capacities of minority-
serving institutions, or MSIs, to educate the Nation's emerging 
majority populations. Given that these institutions represent 
the fastest growth in the Nation in terms of enrollments, MSIs 
should be recognized as a key target of support under the 
Higher Education Act.
    I believe that several important steps could be taken 
during this reauthorization to strengthen MSIs, including 
expanding the scope and authorization levels of Titles III and 
V, investing in technology capacities to ensure that all 
graduates will be able to use technology effectively, 
developing new graduate-level opportunities to train future 
faculty and senior institutional leaders, and expanding support 
for international education at MSIs under Title VI.
    Finally, I urge you to consider a new concept in this 
reauthorization, and that is to encourage private sector 
investment in aid to students. While private scholarship never 
will, nor should, in my opinion, be seen as an alternative to 
Federal financial assistance, it should be recognized as one of 
the key partners working to support students. I therefore ask 
that you examine ways to stimulate even greater response from 
local communities, corporations, foundations, and individual 
donors.
    One specific way to do this is via the LEAP program, which 
could leverage a much greater amount of aid for students if it 
were used to stimulate not just State dollars for student aid 
but significantly increase private sector aid as well. The 
current LEAP legislation could be modified to reward those 
States where a significant increase in private scholarship aid 
is leveraged by the State.
    In conclusion, I believe that promoting access to higher 
education remains one of the most critical responsibilities of 
the Federal Government in ensuring the Nation's public, 
private, social and economic stability and prosperity. Efforts 
such as those that I have outlined here could go a long way 
toward improving student access to higher education and 
fulfilling the American dream of a college education.
    Thank you very much for this opportunity.
    The Chairman. Thank you very much, Mr. Merisotis. That is 
very useful. I appreciate the specifics.
    [The prepared statement of Mr. Merisotis may be found in 
additional material.]
    The Chairman. Mr. Hollett?
    Mr. Hollett. Mr. Chairman, Senator Alexander, first of all, 
I thank you for holding the Senate's first major hearing on 
reauthorization of the Higher Education Act and for extending 
this opportunity to the Ohio College Access Network.
    As a first-generation college graduate, I am honored to 
appear before you today to discuss an initiative that is key to 
helping many students get to college who would not otherwise 
go. The Ohio College Access Network, as we know it called OCAN, 
was founded in 1999 by KnowledgeWorks Foundation in 
collaboration with the Ohio Board of Regents and the Ohio 
Department of Education. We work to establish college access 
programs across Ohio.
    College access programs are community-based, nonprofit 
organizations established to increase the number of students 
who pursue education beyond high school by providing hands-on 
guidance and financial support.
    OCAN is the Nation's first and only Statewide coordinating 
body for college access programs. We have grown from 11 
programs in 1999 to 33 today. Our growth has been fueled by the 
support of Governor Bob Taft, who challenged OCAN to double the 
number of programs and provided the financial means to do so. 
Because of the Governor's access initiative, OCAN programs now 
serve nearly 300 of Ohio's 612 school districts.
    I was the first in my family to go to college. My parents 
did not graduate high school, but I went to college because 
they expected me to do it, and they believed I could do it. 
Unfortunately, many children do not have parents who believe 
they can or should go on to some form of education beyond high 
school. These young men and women become convinced they cannot 
go, they are not smart enough, or it is too expensive.
    There are many barriers to going to college, and allow me 
at this point to use the word ``college'' to cover all forms of 
accredited education beyond high school. In OCAN's experience, 
cost and lack of information are the major reasons why young 
men and women do not go to college. And the second--
information--is what OCAN is all about. Our college access 
programs provide the information that families need to 
understand and believe that a college education for their 
children is possible and to help them secure the money needed 
to pay for that college education.
    Let me share a couple of examples of what we do. In 
Zanesville, OH, there was a young woman from a single-parent 
family who wanted to go to college but was afraid to go to her 
high school guidance counselor because she believed her family 
secret would be revealed. The family secret--her mother was 
dying of AIDS, and she was convinced the illness would be 
revealed when she completed the FAFSA in the counselor's 
office; plus she thought she was too poor to go to college.
    The college access advisor working in her school learned of 
her plight, approached the student and asked her to visit the 
access program on a Saturday to protect her privacy. After 
months of private counseling, that young woman was admitted to 
Muskingum College and is now a sophomore getting straight A's.
    The second example--and this is from personal experience--
in Cleveland, I met a young man who was recommended to 
Cleveland Scholarship Programs for guidance and counseling. He 
came from a broken home. His father was in jail, his mother was 
on drugs, and he was living with his grandmother. He was just 
an average student, but there was something about him, 
something that made me believe that given the chance, he would 
do well.
    Cleveland Scholarship Programs provided him with 
scholarship support and helped him enter Morehouse University. 
He graduated with honors in physics and then was accepted 
directly into Case Western Reserve University's doctoral 
program in molecular biology and physics.
    These two examples show what college access programs can do 
for Ohio. OCAN, with the support of Governor Bob Taft, built 12 
new programs over the past year. Building those programs has 
reinforced our belief that increased information and financial 
support are the keys to opening the doors of higher education 
for all students.
    The reauthorization of the Higher Education Act offers us 
the opportunity to address the growing needs for college access 
programs across the country. Specifically, I ask that the 
committee consider the following principles.
    First, cost and lack of information are the biggest 
barriers to going to college. Families need the services of 
college access programs to provide hands-on guidance and the 
information about all aspects of the college application 
process.
    Second, successful community-based college access programs 
are built through public-private partnerships, collaborations 
that involve all within the community and do not presume that 
government support is the only source of program revenue. 
Community-based college access efforts need your support.
    Third, building college access programs is slow and time-
consuming. OCAN's national counterpart, the National College 
Access Network, receives inquiries every day from communities 
across the country that see the need to help their kids get to 
college. We must provide support to these grassroots efforts 
with the financial wherewithal and know-how to start serving 
these students.
    And finally, something that Senator Alexander mentioned in 
his opening remarks--we need to make it easier to apply for 
financial aid. We must simplify the FAFSA and make it more 
user-friendly.
    Thank you for offering the opportunity to explain the work 
of and need for college access programs in Ohio and across the 
Nation.
    One final thought, and this comes from personal experience. 
Tomorrow, a child will wake up somewhere, a child who wants to 
dream but does not know how, a child who needs to dream but 
does not understand why, a child who needs to believe but does 
not have any believers. If we do not believe in that child, who 
will?
    Thank you.
    The Chairman. Thank you, Mr. Hollett. I appreciate that.
    [The prepared statement of Mr. Hollett may be found in 
additional material.]
    The Chairman. Mr. Lambert?
    Mr. Lambert. Good morning, Mr. Chairman, Senator Alexander, 
and members of the committee.
    My name is Troy Lambert, and I am presently in my fourth 
year at the University of Maryland, College Park. I am 
anticipating graduating next year, majoring in geography with a 
citation in geographical information science. My current plans 
are to pursue employment working with global positioning 
systems.
    I am very pleased to testify this morning at this hearing 
on student financial assistance, because without Federal 
student aid, as well as support of the Federal TRIO programs, I 
would not be in college today.
    I am a graduate of Friendly High School in Prince George's 
County, MD. I am the sixth of seven children, and next year, I 
am confident that I will become the first in my family to 
receive a bachelor's degree. My father works for the Water and 
Sewer Authority in the District of Columbia, and my mother 
works for a small information technology and engineering firm.
    Last year, I received $2,350 in Pell, $1,625 in University 
of Maryland grants and scholarships, $600 in SEOG, $1,800 in 
work-study, and $5,500 in Stafford loans.
    I live at home with my parents and also work 26 to 30 hours 
each week as a security officer. Typically during the week, I 
work from 6 a.m. until noon, take the metro to the university 
and finish classes between 4:30 and 7:30 p.m. Last year, Pell, 
SEOG, and university assistance covered all my tuition and 
fees. This allowed me to assist with expenses at home. This 
year, the university increased tuition 13 percent, and due to 
this increase and the lateness of my aid application, I have to 
cover more tuition with loans and my earnings.
    This morning I would like to address two topics from my own 
experience related to student financial aid and access to 
higher education--one, the importance of providing information 
about attending college and financial aid to low-income and 
first-generation students, and two, obstacles to retention and 
graduation for low-income students.
    Although I graduated with a 4.0 average from high school, I 
was not regularly admissible to the University of Maryland 
because of my SAT scores. My family moved while I was in high 
school, and no one at school was able to help me sort out my 
postsecondary options.
    Members of my church helped me find the University of 
Maryland's Educational Opportunity Center, a Federal TRIO 
program. Staff at the EOC discussed my choices with my family 
and me and assisted me in securing admission to the University 
of Maryland through the Academic Achievement Program. The 
Academic Achievement Program is another university initiative 
partially supported through the TRIO Student Support Services 
Program.
    I do not think the needs that my family and I had for 
information and assistance about college are unique. The cost 
of 1 year of my undergraduate education at the University of 
Maryland is several months of my parents' total income. Today, 
without financial aid, a typical low-income family would have 
to spend about 62 percent of the family's annual income to send 
one child to college for 1 year.
    While 82 percent of students from families in the top 
income quartile continue on to college, only 55 percent of 
students in the bottom quartile do so. Moreover, because of the 
costs, of students from families with income below $25,000 who 
do go to college, only about half go on to begin at a 4-year 
institution as compared to students from families with incomes 
above $25,000.
    After I enrolled in college, there were still issues with 
my financial aid. Three times while attending college, I have 
encountered serious problems in understanding what I need to do 
to continue to receive adequate aid--first, when I became 
overcommitted in terms of work; a second time, when my mother 
was diagnosed with cancer last year, my family responsibilities 
increased; and again this year, when the university increased 
tuition. In each instance, the Student Support Services TRIO 
Program office, working closely with the university's financial 
aid office, helped me through a situation that could have 
resulted in my withdrawing from the university.
    In my own college experience, I have encountered at least 
three sets of obstacles that challenged my commitment to remain 
in school and graduate. The most serious was last year when my 
mother was diagnosed with breast cancer. Although she is 
presently doing well, the costs of her medical care placed a 
real burden on our family's resources, and we accumulated 
substantial debt. I am now contributing part of my earnings to 
help my family pay those bills.
    In addition to family pressures, academic pressures also 
caused me to consider dropping out. When I first came to the 
university, I intended to major in computer engineering but had 
problems with physics as well as some of the advanced 
mathematics courses. Because of the Academic Achievement 
Program's summer transitional program and the tutoring and 
counseling it provided during the academic year, I was 
encouraged to stay in school and graduate.
    A final problem that could have resulted in my dropping out 
of college was the extent to which I was working in my 
sophomore year. I realized that I could not maintain my grades 
and work the number of hours that I was working.
    The factors I saw in my own life are reflected in national 
figures. First-generation students are 64 percent more likely 
to leave school without a degree than children of college 
graduates. Without loans, I could not have stayed in college, 
but I have deliberately avoided loans when I could and chose to 
work to help pay for my education and help my family. When I 
graduate, I do not want to be in debt over my head.
    Senators, I know you will give the issue of the impact of 
large loans and low-income students' decision to attend and 
stay in college a great deal of thought.
    Senators, I appreciate your giving the hopes and struggles 
of students like me your thoughts and attention.
    Thank you.
    [The prepared statement of Mr. Lambert may be found in 
additional material.]
    The Chairman. Thank you, Mr. Lambert. You are really an 
extraordinary role model for a lot of people, and I hope we can 
get your story out, because what you have done is very 
impressive, and I am glad to hear that your mother is doing 
better.
    Mr. Lambert. Thank you.
    The Chairman. Let me actually ask you a question on that. 
You mentioned that--and I think it is exactly the way you 
should approach it--you do not want to leave college with a lot 
of major loans. And you also mentioned that low-income students 
end up with more significant loans and as a result end up 
dropping out.
    Do you think there should be some relationship between 
forgiveness of loans and completion of college?
    Mr. Lambert. Yes, I do. I believe that if someone is 
working really hard to learn more so they can do better and 
prosper, they should be able to get a lien so they do not have 
to pay so much and so there will not so much pressure on them 
while they are in school and while they are finishing school.
    The Chairman. Do you think it would be an incentive if we 
had higher loan forgiveness as people receive degrees?
    Mr. Lambert. Yes.
    The Chairman. Thank you.
    Dr. Waldner, you made the point on creating these 
``quality-efficiency task forces'' from college to college. How 
receptive do you think faculty is going to be to a quality-
efficiency task force? I sensed, in my experience as Governor, 
that the biggest resistance to efficiency--not necessarily 
quality, but certain efficiency--was faculty and that the whole 
concept of becoming a professor in a university is that you are 
choosing a lifestyle that does not necessarily tie efficiency 
to your goals.
    And you make a legitimate point that it is the 
instructional costs where the money is, and I have never been 
able to get my hands around how you create more efficiency and 
productivity in instructional costs. Do you really think these 
quality-efficiency task forces would be accepted and be 
efficient, or is there some other way we can address that 
issue?
    Mr. Waldner. I have been in higher education since 1973, 
and I taught for nearly 12 years. I was a department chair, I 
was active in the academic senate, and so on. I believe that if 
the college president were to form such a task force and ask 
the president of the academic senate to nominate three or four 
members of the faculty who would serve on it, the response 
would be affirmative.
    I think the self-interest is obvious, but by the same 
token, I think most faculty members take their sense of 
responsibility to the community seriously, and I think they 
would serve on such a task force.
    I think it is very important that the task force include 
members from outside the college community so that the inner 
workings and the perhaps unexamined assumptions that 
characterize many academic institutions will be subjected to 
some perspectives that are unusual in that context.
    The Chairman. Do you think it should be a condition of 
receiving Federal funds that colleges have these sort of 
comparative task forces?
    Mr. Waldner. I am not a legislative technician, but the 
idea that I had is simply that if an institution wishes to 
participate in the Federal programs, they have to confirm--the 
president would have to sign, as the president signs the audit 
report--that yes, we have an efficiency self-review task force 
on our campus, we are using the NACUBO template to compare our 
costs to peer institutions, and we in fact are generating cost-
saving steps to take as a result of that. I think that to 
confirm that would be not particularly intrusive or onerous for 
an institution, and I believe it would have some impact.
    The Chairman. Mr. Merisotis and Mr. Hollett, both of you 
focused on what I will call transparency--getting information 
out but also having the information to get out. To what extent 
should we require transparency on issues of hours that 
professors teach, number of TAs teaching courses, things like 
that, that make the decision process and also drive the cost 
function?
    Mr. Merisotis. Well, from my perspective, the question is 
what is the legitimate Federal interest, so I want to know more 
about what that information would have to do with what would be 
expected of the institutions vis-a-vis the Federal programs.
    I am in favor of more transparency particularly as it 
relates to the financing side of the equation, the revenues and 
expenditures of institutions. What institutions are doing to 
improve their efficiency, as Dr. Waldner has talked about, I 
think is interesting.
    It is not clear to me what Federal interest in faculty 
productivity, which I think is what you are talking about, 
might be, so I am not sure that that is the kind of 
information.
    The Chairman. In fact, a direct function of cost is faculty 
productivity, isn't it?
    Mr. Merisotis. Well, there are many factors associated with 
cost, so my question is do we want to look at factors 
associated with State investment in institutions, which is the 
primary driver of rising prices; in public institutions, it is 
declining State support. Do we want to look at factors 
associated with investment in need-based financial aid on the 
part of the institutions, which is a big reason for price 
increases in private institutions?
    My point is simply that it is a complex equation, and I do 
not want to simply add a huge reporting burden for 
institutions--sort of throw it up against the wall and see what 
sticks. I would rather look at what are the factors, what is 
the information that we really need to make decisions at a 
Federal level about the programs and policies that exist.
    The Chairman. Do you have any comment on that, Mr. Hollett?
    Mr. Hollett. No. That is not our area of expertise. Our 
focus is to explain to families, especially low-income 
families, how it is possible to go to college, and then we work 
closely with them, as in the case of this gentleman's family, 
to find them the means to pay for it. Expenses are rising. But 
I am not an expert to comment on the transparency issue.
    The Chairman. Do you have a specific proposal for how we 
could simplify the forms?
    Mr. Hollett. I have a few ideas. I think it would take a 
couple of hours.
    The Chairman. Well, we would be interested in specific 
proposals on how we could simplify the forms.
    Senator Alexander?
    Senator Alexander. Thank you, Mr. Chairman.
    I have two questions. Let me follow up on the chairman's 
question. Would any of you volunteer, or would your 
associations volunteer, to rewrite the application forms?
    Mr. Hollett. Yes.
    Senator Alexander. I will talk this over with Senator 
Gregg, but it would seem to me that if the colleges and 
universities and admissions offices and those who deal with 
students and families on a regular basis would form a small 
group and come back to us and say ``We have gone through this, 
and we can put this in plain English, and we can cut out two-
thirds of the pages, and we can accomplish the same things,'' I 
for one would be happy to arrange meetings with the Department 
of Education and whomever is appropriate as long as we do it 
all in the appropriate way. There is bound to be a way for the 
larger higher education community to take its experience and 
come back to us and say, ``Here is a much simpler way to do 
this.'' There are a number of great writers in the English 
departments around the country, and simplifiers. I am very 
serious about this. It is hard for the U.S. Senate and staff to 
do that well because that is not what we do every day, and it 
is hard for the Department of Education to do it--I know that 
because I was there. That leaves you as the best possibility 
for helping us get that done.
    Mr. Hollett. Senator Alexander, one thing we should 
remember in the simplification process--and I think it is the 
challenge that we always face--we take college-educated 
individuals and simplify a process for noncollege-educated 
individuals. Some of the individuals who need to be involved in 
this process are Mr. Lambert's parents and low-income 
individuals to say ``Can you really understand what we are 
putting in this document?''
    Senator Alexander. Well, I would assume that that is what 
you would do. I would be glad to give you some suggestions 
about how to do it, but what I am suggesting is to use your 
management expertise and your day-to-day expertise and, with 
whatever association it is appropriate, to do it, to test it, 
to come back to us and say, ``We can cut two-thirds out, we can 
make it readable, and here are our suggestions.'' And my guess 
is that if you were to do that, it would suggest to us some 
changes that might have to be made in regulations and in the 
laws--but now is the time to do that, and the sooner we get 
that, the better, Mr. Chairman.
    The Chairman. If the Senator would yield, I think the 
Senator is onto an excellent thought. I suspect this room is 
filled with a number of folks who represent various groups who 
are interested in this area, and I would simply say that the 
door is open and we are soliciting ideas. However you want to 
coordinate and pull together a simplified form, we would be 
interested in your doing that.
    Senator Alexander. Thank you, Mr. Chairman.
    My second question--let me go back to Mr. Trachtenberg's 
article. I noticed that no one of the four of you mentioned 
anything about year-around education as a way to cut costs. It 
seems to me to be by far the most obvious way to do it.
    Just to restate: ``Universities typically operate for 
slightly more than half the year, generally two 14-week 
semesters. We barely use our facilities at all for 3 months of 
the year. This practice seems to me wastes time that we could 
use for instruction and undervalues our facilities, which 
stands idle, and it costs us money. We could actually enroll 
more students and earn more tuition if we operated more of the 
year. Imagine that, instead of two 14-week semesters each 
academic year, we had three trimesters with, of course, 
appropriate vacations between them.''
    ``At George Washington University,'' as I mentioned 
earlier, ``President Trachtenberg says they could have at least 
a thousand students, yet have few students on campus at any one 
time, offer degrees in 3 years instead of 4.''
    I know that in many State universities, it is the rule that 
it takes 5 years to get a degree, sometimes 6 years. There are 
a variety of reasons for that in addition to football weekends. 
One is that they are busy, and you cannot get the right course, 
so it wastes everybody's time to have to take an extra semester 
a year just to get a single course.
    I am reluctant to change the Federal law to encourage that 
or influence it, but one way that occurred to me was to make 
the Pell Grant worth more at institutions that operate all year 
long. That would mean that if your college did not want to do 
that, it was free to do it, it would still have the Pell Grant, 
but if some institutions wanted to specialize in operating 
three semesters instead of two, which would require really 
different faculty attitudes and a different culture on the 
campus--these are big changes, I know that--then those 
universities would be free to do that, and there might be a 
little bit of an incentive, because the Pell Grant students 
they attract might be worth more, and it would be a way to 
provide lower-cost education to lower-income students who bring 
with them Pell Grants.
    I wonder if you have any comments on those ideas.
    Mr. Merisotis. The model that you are talking about already 
exists. It exists in community colleges and many 4-year 
teaching institutions.
    Senator Alexander. How many community colleges are there?
    Mr. Merisotis. The number of community colleges in the 
country is over 1,000.
    Senator Alexander. How many other 4-year institutions are 
there?
    Mr. Merisotis. I do not know the exact number of 4-year 
institutions, but there are probably 2,000 4-year institutions 
in this country.
    Senator Alexander. Yes, so we have 2,000 that we can work 
on.
    Mr. Merisotis. Yes--no, no. I am saying community colleges, 
and then there are 4-year teaching institutions which are the 
majority. George Washington University, private liberal arts 
colleges, institutions that function on that traditional model 
are probably the minority. I am not opposed to your 
recommendation, but I simply want to point out that many 
institutions already do that.
    The idea of the kind of Pell Grant bonus that you are 
talking about would probably benefit many institutions----
    Senator Alexander. Wait just a minute, Mr. Merisotis. Many 
community colleges do that.
    Mr. Merisotis. Yes.
    Senator Alexander. I do not know of many 4-year colleges 
that do that. University of Memphis, Middle Tennessee State 
University, University of Tennessee all have 20,000, 25,000 
students, and they do not do that.
    Mr. Merisotis. In many States, they do. In California and 
Massachusetts I can think of, New Jersey, Florida, many of the 
public 4-year institutions----
    Senator Alexander. They have three semesters, and they have 
as many semesters----
    Mr. Merisotis. And rolling admissions and rolling----
    Senator Alexander. So the summertime is as full and busy as 
the----
    Mr. Merisotis. No, not necessarily. Some are, some are not.
    Senator Alexander. Yes, I know. I think, unless things have 
radically changed, that most are not. Is that not right?
    Mr. Merisotis. I think in the 4-year sector, you are 
probably right that the majority are. My point was simply that 
there are institutions already doing that, and we should try to 
encourage more of that.
    Senator Alexander. What would be the best way to encourage 
it?
    Mr. Merisotis. At the Federal--I am hesitant to recommend 
Federal involvement in this, because again, I am not sure what 
the Federal interest is in promoting it, so I am not sure that 
there are incentives. I am talking about the Pell Grant----
    Senator Alexander. I am worried if you say that to Senator 
Gregg's question. That is really a ridiculous statement for you 
to make that there is no Federal interest in our finding ways 
to spend the dollars that we have in a way that will educate at 
a university like George Washington University 1,000 more 
students a year at a lower cost.
    Mr. Merisotis. No. I am all for that----
    Senator Alexander. That is a major Federal interest. The 
whole hearing is about cost, access, and quality, and that idea 
covers all three. So that is the Federal interest. It is the 
subject of the hearing.
    Mr. Merisotis. Fair enough. My point is simply that I am 
trying to understand what the mechanism is that the Federal 
Government would have to do that, and I guess that is your 
question to me.
    Senator Alexander. It is.
    Mr. Merisotis. And I am not sure what the mechanism is, 
because you need to have a big enough lever in order to 
influence their behavior.
    The Pell Grant bonus idea that you have I think would have 
an effect of rewarding institutions that already do that, so I 
am not sure that you are going to change behavior through that 
incentive.
    Again, I want to come back--I am not opposed to your idea. 
I just do not understand what the lever would be that would be 
big enough in order to make it happen. That is all.
    Senator Alexander. Thank you, Mr. Chairman.
    The Chairman. Senator Reed?
    Senator Reed. Thank you very much, Mr. Chairman, and thanks 
for holding this hearing. I am sure it is one of many that we 
will have on the Higher Education Act as we go forward, but 
this is a very important way to start off.
    Thank you all, gentlemen, for your excellent testimony.
    Mr. Hollett, in the Ohio Access Network, can you talk about 
the way that you have encouraged foundations and businesses to 
participate with you?
    Mr. Hollett. Thank you for asking that question, Senator 
Reed. When we go into a community, one of the first things we 
do with the leaders who step forward to build a college access 
program is ask them to do a self-assessment and to determine 
what services are available in the community and what sources 
of income are involved in the community. And through Governor 
Taft's access initiative, we have a grants program, and we 
provide the community with a planning grant in which they bring 
community leaders together to meet and determine the needs of 
the community and how they are going to address those college 
access needs.
    The successful programs that we have from the start must 
have private support and involvement. Some of the most 
successful programs have been put together involving community 
foundations, because quite often, community foundations become 
the source for scholarships, and once the community foundation 
becomes involved in an access program, it is available to 
educate its donors about supporting a college access program 
and giving it the operating support to go forward.
    So Governor Bob Taft has been generous in providing start-
up funds, but the understanding going forward is that this 
money is to start the program, and then the programs learn to 
fund-raise themselves. We teach them those skills, and the only 
way you become self-sufficient is to involve businesses and 
foundations, private and community foundations.
    We involve business because it is important for business to 
have educated employees. So one of the first things we need to 
do is find out the employees that businesses need in their 
communities and get that issue on the table as part of the 
development of the college access program. So it is a 
partnership right from the start.
    In some of the communities that have struggled with that, 
the program struggles with it, so if you do not get the private 
component, you just cannot rely on State or Federal funding for 
continuous support.
    Senator Reed. Can you comment on the Federal programs like 
TRIO and GearUp and LEAP--how do you integrate those into your 
operations?
    Mr. Hollett. We are partnering with TRIO and GearUp 
programs. In fact, we have two programs, one in Cleveland and 
one in Ironton, which is the southernmost port of Ohio. They 
are joint college access and GearUp programs, and this year for 
the first time, we had a joint OCAN-GearUp conference; next 
year, it will involve TRIO programs. They are all forms of 
college access, and they are all successful in their arenas.
    Senator Reed. And Mr. Lambert spoke about the impact of 
TRIO, which was not only edifying but inspiring as well. And 
your reaction, Mr. Hollett, is that those programs are working 
well and should be reinforced?
    Mr. Hollett. Yes, because they offer the element of hands-
on guidance and encouragement, and as I mentioned in my 
testimony, I went to college because my parents understood the 
need, and they pushed me. A lot of young men and women do not 
have those parents who push them. So those programs, the TRIO, 
GearUP, and college access programs come in as many ways as 
surrogate parents and cheerleaders to get kids through college.
    Senator Reed. Good.
    Mr. Merisotis, your testimony highlights the role that LEAP 
plays, particularly as States devote decreasing resources to 
higher education because of their budget problems. One of the 
problems that we have here is getting sufficient resources into 
LEAP to get over the big hurdle so that we can provide 
incentives and be more creative.
    Can you comment on the LEAP program in terms of its role 
and what we could do to make it better?
    Mr. Merisotis. First, I think LEAP and its predecessor, 
SSIG, have been a success. They have leveraged States to create 
and build their State student aid programs. Right now, the 
States are facing an extraordinary time of fiscal stringency, 
and a lot of States are having difficulty investing in their 
need-based aid programs. LEAP is a modest investment, so I 
think the mechanism of encouraging States to maintain their 
contributions continues to be an incentive at least in smaller 
States, States that I think really need to have more leverage 
from the Federal Government in order to make that possible.
    So in terms of suggestions for leveraging more out of the 
States in terms of State-based aid, I think that it is a 
challenge. I was in Massachusetts on Tuesday speaking before 
the Board of Higher Education, and in Massachusetts in the last 
year in the public institutions, tuitions in the community 
colleges have increased by about 15 percent and in the State 
colleges and the UMass system, over 20 percent in the last 
year.
    Maintaining investment in State student aid to match those 
tuition increases is extremely difficult given the kind of 
billion-dollar State funding deficit that the State is facing, 
so it is difficult to know how much more to leverage or how 
much blood to get from the stone.
    My suggestion was simply that there is another vehicle 
through LEAP that we could get to, and that is private 
community-based scholarship efforts which States could work on, 
working with those private scholarship-based organizations to 
generate more fundraising at the grassroots local level so that 
there would be more private scholarship aid coming into the 
system.
    I think we miss an opportunity to get more private sector 
investment in higher education by not using some modest 
leveraging, and LEAP might be the mechanism to do that.
    Senator Reed. But your point, I think, and my point, too, 
since I am a major supporter of LEAP, is that it is a program 
that functions very well and very efficiently, and if we put 
more resources at the Federal level--leverage goes both ways, 
not only leverage to the States but leveraging the 
appropriators--if we put more money into the LEAP program, it 
would likely provide more support for students who are going to 
college today.
    Mr. Merisotis. It is hard not to see LEAP as a success, 
either historically or contemporarily. Many States had no need-
based State aid programs at all before the creation of SSIG or 
LEAP, and today we see, as I see, many States continuing to use 
that leverage of what are really modest Federal resources to 
keep, particularly in the State legislatures, the feed to the 
fire on keeping those investments moving ahead.
    Senator Reed. Thank you.
    Dr. Waldner, finally, on a quick point, we have talked 
about efficiencies in terms of instruction. That raises the 
question of full-time versus part-time instruction. Do you have 
any comments on that? Is that a way in which we can see more 
efficiency, and what is the record so far from your 
perspective?
    Mr. Waldner. I think the tendency in higher education is to 
presume that utilization of part-time faculty necessarily means 
a diminution on quality. Again, I think that that is not 
necessarily the case. I think part-time faculty, if carefully 
selected and evaluated, particularly in fields that have a 
direct application--for example, using a person who is an 
auditor in the real world to teach auditing as a part-time 
faculty in an accounting program is certainly not a diminution 
in quality; having a high school principal teach an education 
course about educational administration is certainly not a 
diminution in quality.
    So I think the tendency to say that part-time equals 
reduction in quality is simply not necessarily true. Part-time 
faculty must be selected with care and evaluated and 
compensated appropriately, and if they are, they can be an 
asset to the program rather than a drag on it in qualitative 
terms.
    Senator Reed. Thank you, Dr. Waldner.
    Thank you all very much, and Mr. Lambert, thank you for 
your testimony; it was excellent.
    Mr. Lambert. Thank you.
    Senator Reed. Thank you, Mr. Chairman.
    The Chairman. Senator Enzi?
    Senator Enzi. Thank you, Mr. Chairman. I appreciate you 
holding this hearing, and I appreciate the testimony of each of 
the presenters.
    I would ask consent that a full statement be included in 
the record at the appropriate place.
    The Chairman. Of course.
    [The prepared statement of Senator Enzi follows:]

                   Prepared Statement of Senator Enzi

    Mr. Chairman, there are few issues that we will take up as 
a Committee that are as important or that have more long range 
implications for our society than today's topic access to a 
higher education. A good education has a well earned reputation 
as the best investment we can make in our children's and our 
own future. It is vital we continue to do everything we can to 
ensure our higher education system remains healthy and 
productive.
    As we will learn today, the value of a good education 
cannot be overstated. Study after study has demonstrated the 
positive effects of higher education. Those who graduate from 
an institution of higher education with a two or four year 
degree can expect to earn significantly more each year than 
those who have a high school diploma or its equivalent.
    In fact, studies consistently show that each year of higher 
education translates roughly to a 9 percent increase in an 
individual's wage earnings. That's a better rate of return than 
you can earn on most investments, and by comparison, it is a 
very low risk one. That also holds true in Wyoming, where wages 
are often less competitive than in other states.
    Higher wages are associated with a better quality of life, 
not just for college graduates, but for their children as well. 
Children of parents who are college graduates are significantly 
more likely to attend college themselves. That puts the next 
generation on the same path to greater opportunity and 
financial success. Higher education is one of the best ways to 
help families avoid poverty in the long term, because it 
becomes a family tradition that continues to pay off for 
generations.
    All of these benefits are contingent on an individual being 
able to attend a college or university, however. Congress has 
been, and by reauthorizing the Higher Education Act will 
remain, a consistent partner in the promotion of higher 
education, and we have helped millions to attend college every 
year who might not have had the opportunity without our 
support.
    As a Senator from Wyoming, and the father of a daughter who 
is very involved in our state's education system, I see the 
question of access to higher education differently than most. 
Many people don't know this, but with only nine institutions of 
higher education, Wyoming has fewer than any state except 
Alaska, and we're only ahead of them by one. Of those we do 
have, only one is a four year university. Our network of 
community colleges, state university, and tribal colleges 
covers a lot of ground, but there are dozens of communities in 
Wyoming that are several miles, sometimes hundreds of miles, 
from the nearest institution of higher education.
    That's one of the reasons I introduced legislation earlier 
this year that would make it easier for students living in 
rural areas to attend college through distance learning 
programs. As I've stated, for many potential students in 
Wyoming, paying for college is only part of the solution. 
Getting there is just as important.
    As the Senate and this Committee move forward with 
reauthorizing the Higher Education Act, I hope that we will 
take into consideration all of the factors affecting access to 
higher education and take whatever action we can to ensure it 
is available to as many of our young adults as possible. Simply 
put, a higher education opens the door to a better way of life. 
While that door remains locked for far too many of our nation's 
children, the legislation we take up today has the potential to 
provide many of them with the key. Thank you, Mr. Chairman.
    Senator Enzi. Mr. Hollett, in your testimony, you State the 
importance of creating college access programs in rural areas. 
I represent a very rural State so I am particularly interested 
to find out what works in those areas. In fact, Wyoming is the 
sixth largest State but the least populated of the entire 
Nation. I have one county that has 2,300 people, and it is the 
size of Delaware. So we have some real distance issues.
    Could you comment on how Congress might make the 
appropriate outreach to rural areas for college access 
programs?
    Mr. Hollett. Thank you, Senator Enzi, for that question.
    That is a challenge in Ohio. The original programs were 
built in large urban centers--Cleveland, Columbus, and 
Cincinnati, and my area of travel over the past year has been 
into Appalachian Ohio, which is rural, very hilly area.
    The challenge you face in rural communities is that, one, 
they are small and, as you mentioned, large geographical area, 
small population. The success for a college access program in a 
region such as that--and it is an approach we are doing in 
Ohio--is to develop areas of excellence where you would take 
one of the larger communities to provide the college access 
services and create a network of individuals who would go out 
and work in the high schools to serve the students who need the 
hands-on experience. It has to be partnered with strong 
Internet support and also an 800 call number so that these 
parents do not have to go into one spot to get the services.
    If I had my wish, we would be able to support centers of 
excellence in rural communities that would be built on that. 
You would have a community with a physical location, a resource 
center, where individuals could come into town, get the hands-
on counseling, the computers, the books they need, but at the 
same time, you would make sure that all the high schools within 
that greater geographical community would have an advisor whose 
job it is to work with families and students to help them fill 
out all the forms, raise the money to pay for college, and then 
to go to college.
    It is not impossible--it is more difficult, but it is 
feasible.
    Senator Enzi. Thank you. We have a little difference in 
size of communities, too. Our largest community is 52,752 
people, and it goes down rapidly----
    The Chairman. I thought it increased--didn't you have a 
grandchild? [Laughter.]
    Senator Enzi. You are right.
    Mr. Hollett. The communities that we serve, Senator, range 
anywhere--we have a program in a community of 3,500 people that 
serves a county. I am going to Defiance, OH to look at a 
program that will serve five counties because it is an 
agricultural community, and the size of Defiance is 10,000.
    Senator Enzi. You mentioned the partnership with the 
National College Access Network. There are several of us who do 
not have an official partnership with that organization, and 
given the importance of parent involvement in student 
preparation for college in the issue of access, how can 
Congress help ensure that rural communities have access to the 
same information that other States with those types of networks 
have?
    Mr. Hollett. Provide funding for the National College 
Access Network to reach out to the 50 States in this country 
and to partner with community colleges, nonprofit 
organizations, to start a college access network in each 
community.
    We have models of excellence across this country who are 
members of the National College Access Network. OCAN is one of 
them, but there are different forms of access that can be 
provided to different States based on their geography and their 
population density or sparsity.
    So I would ask that your office contact the National 
College Access Network. The phone number if you would like it--
--
    Senator Enzi. Please.
    Mr. Hollett [continuing]. Is 216-241-6122, and we will be 
happy--I would love to come and visit your State, Senator.
    Senator Enzi. We would love to have you come. We will work 
on some arrangements for that. Thank you.
    President Merisotis, you discussed technology and learning 
briefly, and I know the institute included distance learning in 
the report you mentioned as well. What role do you see distance 
learning playing in the field of higher education?
    Mr. Merisotis. I have been impressed with the way that 
distance learning has really been used as an innovation in 
higher education in the last few years. Way back in the late 
1990's, in the go-go times, we really thought that distance 
education was going to eclipse traditional higher education in 
some ways. But reality has a funny way of catching up with you, 
and what we found was that in fact, technology is being used as 
a teaching and learning tool in many integrated ways. So I 
think the use of technology in higher education is one of the 
most interesting and important things that we have seen change, 
and I think it is going to result in an improvement in 
efficiency of delivery and an enhancement in terms of the 
accessibility of higher education in this country.
    But it is a complicated enterprise. We used to think that 
there would be huge growth in wholly online-based degrees, and 
in fact there has been a modest increase in that but not as 
much as we had anticipated.
    What typically happens is you have a college student, say, 
at a 4-year institution, and they are going to take one or two 
courses via distance means because it offers convenience, 
because it offers them some other opportunities that they would 
not otherwise have, and I think that is exciting and is 
something that we are going to continue to see advance.
    With respect to the Federal law, there was something that I 
was pleased with in the 1998 Higher Education Amendments, which 
was the creation of something called the Distance Education 
Demonstration Program, which was an attempt to try to look at 
deregulating some of the efforts that impede more distance-
based education.
    What I do not understand about the demonstration program is 
that I have never seen a comprehensive assessment of what 
happened in those 100 or so institutions that participated in 
that program, and I believe they owe you a report, so I am 
curious to know why that is, because as we are moving into this 
reauthorization, there is a sort of natural question, which is 
what could we do to stimulate more appropriate investments in 
distance education, and I do not think you have been provided 
with the right kinds of information in order to be able to make 
that judgment.
    The critical question is the so-called 50 percent rule, and 
under the 50 percent rule, institutions that participated in 
the demonstration program were exempted from the 50 percent 
rule. But I just do not know to what extent it worked or did 
not work in the Distance Education Demonstration Program.
    So I am a technology enthusiast. I think technology creates 
tremendous opportunities in this country. Senator Allen 
championed this bill to support investment in technology at 
minority-serving institutions that passed the Senate 
unanimously, S. 196. Those kinds of investments I think are 
terrific. What I want to make sure of is that the investments 
are appropriate and do not have unintended negative effects, so 
I want to be cautious about how we proceed.
    Senator Enzi. I suspect that future hearings will cover 
some of those reports or lack of them.
    Mr. Waldner, since you have taken up the role of president 
of York College, and as the accountant in the Senate, I am 
fascinated with how you have successfully focused on 
controlling costs, has competition with other institutions 
influenced those efforts? Are you aware of other colleges or 
universities that are using a model similar to what you have 
been using to control costs?
    Mr. Waldner. I can think of three or four around the 
country that would be highly similar to York College in the way 
they go about structuring their educational programs, but not a 
large number, no. I think there is a need for more colleges to 
take the efficiency issue more seriously than they have in the 
past.
    Senator Enzi. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    I have just one last question which is really the $12 
billion question, which is what we spend on Pell Grants. We 
seem to be in a situation where we are chasing our own tail, 
where every time we raise Pell Grants and we raise the capacity 
of students to get loans, tuition jumps. As a result, the 
students do not benefit. We do not get more students who can 
take advantage of it; we do not get more students getting 
education for the dollars that they are getting through the 
Pell Grants. It is just the opposite, in fact--it essentially 
becomes a--I think it is viewed by many trustees and 
universities as an entitlement, and when the entitlement is 
increased, they are going to take it, and without any resulting 
or offsetting actions to try to control costs.
    So my question is--and you have all addressed it in a 
partial way--how do we get our hands around that issue of 
chasing our own tail when we raise these accounts? We all want 
to raise them, we all want to put more money and raise Pell 
Grants to a higher level and make loans more readily available, 
but it is just frustrating when you know that it is not 
benefitting the students in many ways, just like the University 
of Maryland raising their tuition 13 percent.
    I would be interested in anybody's comments on that.
    Mr. Waldner. My point would simply be to broaden the base 
of interest in the issue of efficiency within the college 
community itself, but then bring in the community as well to 
those discussions. I think if the only people who are really 
focusing on cost control are the business officer and the 
president and maybe the dean, and they are arguing with people 
that this is important but they get a pushback in the form of 
``But you are advocating things which are going to reduce the 
quality of our program and make us less competitive with our 
peer group'' and so forth, that is a difficult argument to win.
    So I think you need to have a more broadly diffused concern 
with efficiency issues within the academic community informed 
by community perspectives on that topic as well.
    I think the good news is that there is an upside potential 
there, that not as much as has been done on this topic as could 
be done.
    The Chairman. Does anybody else want to comment?
    Mr. Merisotis. I hope I can convince you, Senator, that 
your investment has not been a waste. I think that your 
investment has made a huge difference in the lives of millions 
of students. I share your frustration with the rising price----
    The Chairman. I did not imply that it was a waste. I simply 
said that I want to get more for the investment than having it 
put to the trustees.
    Mr. Merisotis. Yes, and I would strongly agree with that. 
The question is whether or not Federal student aid is directly 
linked to the rising prices.
    I have been a researcher in this field for 20 years, and I 
have tried to get a handle on that because it has been one of 
the most vexing questions--is there a direct relationship? We 
have never found any credible evidence to suggest that. Despite 
the seeming obviousness of the point that investments in 
student aid have increased, and so have tuitions, it does not 
necessarily mean that one is driving the other. And as I 
mentioned earlier, the research pretty clearly shows in the 
public institutions that declining State support is the reason 
why tuitions are increasing. State budget situations have been 
dire, and they have really been problematic for many years, and 
that has been the primary driver.
    But this issue of the relationship is one that I think we 
do need to continue to keep an eye on and better understand. I 
have not heard many arguments about the relationship between 
Pell Grants and prices. I have heard more arguments about the 
investment in student loans and prices, and I think the reason 
is that student loans are a much larger proportion of the 
total. We are talking about $40 billion in student loans as 
compared to about $12 billion in Pell Grants.
    But even in the student loan arena, I have not seen the 
correlation. I try to make this argument. I have this 
discussion with reasonable people who say, Look, there is $40 
billion in investment; there must be some relationship. And the 
problem with the reasonable person argument is that it does not 
work in other industries, so I am not sure why it would work in 
higher education. We do not see the availability of private 
credit for auto loans contributing to the price of cars.
    The Chairman. That is because there is a different----
    Mr. Merisotis. We do not see the investment in FHA loans 
contributing to the rising prices of homes, my point simply 
being that pricing behavior in colleges and universities is 
very complex. You can get a 4-year college education in this 
country for $1,000, and you can get one for over $30,000, and 
that is an enormously price-competitive market and one that 
would be very difficult to understand how external capital 
coming into that influences the price.
    The Chairman. I had a wonderful professor named Raymond J. 
Savlnier. He had been chairman of the Joint Economic Council 
under Eisenhower and had a lot of very unique sayings. One of 
his sayings was ``It is intuitively obvious through 
inspection.'' And I would say that it is intuitively obvious 
through inspection that the huge infusion of Federal dollars 
into education has a distinct impact on tuition costs, 
especially on the escalation of tuition costs. I do not know 
how we will ever get a handle on that, but it does seem to me 
to be an issue.
    We are going to go around a second time, but Senator 
Clinton has joined us, and I certainly respect her opportunity 
to go first.
    Senator Clinton. Thank you, Mr. Chairman, and thank you for 
holding this important hearing.
    I want to thank the witnesses for appearing today and 
helping us deal with some of the important issues we are going 
to face on the reauthorization of the Higher Education Act. And 
I apologize for being unable to get here any earlier; I was at 
another hearing. I want to underscore the importance of this 
debate about cost, but to me, the really critical question is 
how we maintain access. Cost is one of the drivers, but it is 
not the only concern, and we have to figure out how we can 
continue to make it possible for young people or people of any 
age who are willing to work hard to obtain the education that 
they are seeking.
    I wanted to ask Mr. Lambert--I thank you for being here and 
sharing your story with us--I understand that you spoke 
eloquently about the importance of early intervention programs 
like GearUp and TRIO and the need for more financial support, 
as well as the challenges of accommodating students who work 
while they go to school, as I understand you do. In fact, your 
story exhausted me just hearing about it; you are up at 6 a.m., 
you work until noon, you take the metro to school, you attend 
class until 7:30 at night. I know that you are very committed, 
and that makes it possible, but it certainly is a challenge.
    I wanted to focus on the point that you noted about the 
tradeoff between work and financial aid. It concerns me that 
students can be penalized for doing the right thing. As I 
understand it, you work to help pay your family's medical 
bills, and I really applaud you for taking that family 
responsibility seriously. Yet at the same time, one way the 
student aid formula disadvantages working adults like Mr. 
Lambert is that it does not allow those who are attending less 
than full-time to count housing expenses as a full-time student 
can. So you get the worst of both worlds--you go and do the 
right thing, which is to take that part-time job, increase your 
hours, try to help your family, support yourself, and then you 
lose the financial incentive so you end up in the hole, and 
that is a difficult calculation.
    I know that working adults are unable to count the cost of 
attendance toward the HOPE Scholarship credit. Could you just 
describe in more detail what problems you have experienced and 
if you have any ideas about how someone in your position who is 
trying to do the right thing on both counts, taking care of 
yourself and your family plus getting your education, could 
perhaps get a little additional help?
    Mr. Lambert. The experience I have gone through is that you 
are right about how, if you work more, you get penalized for 
getting financial aid, and that really gives you a lot of 
stress. So you try not to work too many hours just so you can 
fall under the financial aid.
    I think that if people are working hard, they should be 
able to be funded, more funds, and not be penalized if they are 
working hard; especially if they have emergencies and family 
struggles, they should not have to worry about the extra burden 
of financial debt or loans that they have to pay back, just so 
they can better themselves.
    Basically, I feel that we should not have to pay back loans 
and things like that, so it will help us get through.
    Senator Clinton. I wish you well in your education.
    Do any of the other witnesses want to add anything to that?
    [No response.]
    Senator Clinton. One of the biggest concerns I hear 
throughout New York is this tradeoff because we have so many 
students who are working. The cutbacks in State aid have 
actually ended up making it more expensive and more difficult 
to continue in a public college or university than in a private 
college or university. And the cutbacks in need-based funding, 
which are being mandated by a lot of States and being adopted 
voluntarily by many institutions, have added to the problems, 
because with the cuts in need-based funding, with the cuts in 
State support, with the rules about who can access Federal 
dollars, we are seeing a shrinkage in the number of students 
starting and completing from the lower-income levels in our 
society.
    So that kids who come from families in the lower quartile 
are now attending college at a lesser percentage than they did 
20 years ago, which is totally backward; we are inverting the 
opportunity curve. People like my daughter and others, who now 
can get more aid because they qualify for more merit-based, are 
taking opportunities away from young people who could make a 
real contribution and could obtain an education that would 
certainly benefit them and benefit the rest of us.
    So I think we have got to look seriously at the incentive 
and the way that we are addressing this, and I worry that 
somehow in the last 20 years, even with the help that we have 
provided, we have put so many strings on it, and we have put 
money into one pot that then gets taken out in another pot, 
mostly at the State and public level, so that we are ending up 
with fewer young people attending school than did 20 years ago 
who come from families that are working hard and, like Mr. 
Lambert, trying to advance their own futures.
    So I appreciate the witnesses' attendance today, and I look 
forward to working with the chairman and my colleagues to 
figure out how we can work out way out of this conundrum that 
we seem to have found ourselves in.
    Does anyone have any comment on that? Yes, please.
    Mr. Merisotis. Just to reinforce the point, I value work, 
and I believe work is an important part of what students do as 
a part of their college education. Work-study in particular is 
an effective investment, both because it provides financial 
aid, but also because we know from the research that students 
who work--and the optimum amount of time is about 20 hours or 
less--students who work actually stay in school and succeed at 
higher rates than those who do not. Now, once you get above the 
20 hour level, it becomes burdensome for the reasons that Mr. 
Lambert was talking about, that is, it interferes with family 
and other responsibilities.
    So I think the investment in work-study is enormously 
important because it directly contributes to students staying 
in school and succeeding. I have been trying to encourage as 
much investment at the State level in State-based work-study as 
I have in trying to increase investment in work-study at the 
Federal level, because I think it is a very effective way of 
not only getting students into college but of getting them out.
    Mr. Hollett. I would like to respond to your comments, 
Senator Clinton. There is still a myth in this country that you 
can work your way through college. Back in the sixties, you 
could work less than 40 hours a week and pay for college. 
Today, studies indicate that if you work 90 hours a week, you 
can still not pay for college.
    The thing we have to remember is that the low-income 
families and students that we need to help the most have to 
apply for those jobs that are low-wage, and the last time I 
checked, minimum wage jobs were not seeing increases at the 
rate college tuition is going up, and that is the growing gap.
    Senator Clinton. Finally, Mr. Chairman, one of the other 
areas that I hope we can explore is the role that colleges and 
universities, two-year and four-year, play in economic 
development and look for ways that we can not only strengthen 
those relationships but try to create more opportunities for 
work. I think there is a pool of potential jobs that could be 
better organized and structured that would be available to 
students that would be win-win--it would keep young people in 
school, it would provide the training and the contributions of 
an employee to a workplace, as well as obtaining the skilled 
workforce that many communities need.
    So I think that this is a broader conversation that we 
should be exploring.
    I thank you, Mr. Chairman.
    The Chairman. Thank you, Senator, and I agree with many of 
your concerns.
    I think we have a chance here with this higher education 
reauthorization to do something very creative and to think 
outside the box and produce a bill that I think will take a lot 
of the great ideas that have been put on the table today and 
others that are out there, such as the ones that Senator 
Alexander was talking about, and try to bring them into play 
and give more people the opportunity of access to education.
    So I thank the panel. You have been wonderful. We are very 
appreciative of it. Have a great day.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

                Prepared Statement of George W. Waldner
    Mr. Chairman and Members of the Committee: I am pleased to be here 
today to discuss with you an important issue in the field of higher 
education, namely, the relationship among quality, efficiency, and 
access.
    I feel qualified to speak on this subject because my institution 
has managed for many years to combine attention to quality and careful 
cost control and thus be an outstanding value in higher education. We 
are an independent college. Tuition for this academic year is $8,000. 
The comprehensive package including tuition, fees, room, and board 
comes to $14,500 for the year. We are priced at about 60 percent of the 
charges levied by comparable independent colleges and at about the same 
price as state-related colleges and universities in our state, which 
are subsidized over $4,500 per student. But value has two parts: price 
and quality. York College is in the top third of the U. S. News ranking 
of northern universities--a ranking based purely on program quality. We 
are in the directories titled The Best Middle Atlantic Colleges: 98 
Great Schools to Consider as well as Barron's Best Buys. Jay Mathews of 
The Washington Post included York College in his list of ``20 
Undiscovered Gems'' in his April, 2003, article in The Washington Post 
Magazine. York College, at $14,500, was number ten on the list of 
twenty. The number nine college charges $33,710; number eleven, 
$29,750. York College, I believe, represents access to high quality at 
a price within the reach of most American families, when combined with 
federal, state, and institutional aid programs.
    Efficiency is not a dirty word at York College, but efficiency is 
viewed as a suspect concept in most of American higher education. Why 
is that the case?
    In the normal course of institutional life in academia, there is a 
constant and passionate focus on qualitative improvement. That is 
clearly desirable and highly consistent with the overall mission of 
higher education. What is much less prevalent, however, is a 
concomitant, vigorously advocated concern to attain educational quality 
in a highly cost-efficient way.
    There is an apparent tendency among members of the academy to 
believe that any effort to control or to reduce costs will necessarily 
take a proportionate toll in terms of program quality. In short, there 
is a denial of the concept of efficiency--the ability to produce a 
desired outcome with a minimum of expense and waste. This attitude 
makes the championing of cost control on college campuses a lonely and 
unpopular crusade, the dreary business of deans and chief financial 
officers.
    It is important, however, for college communities as a whole to 
adopt a positive, pro-active approach to cost control, in order to 
preserve access to higher education opportunities for all qualified 
students. Federal and state financial aid and subsidies as well as 
institutional aid, though essential for student access, must receive 
more of a helping hand from those who are directly engaged in operating 
higher education institutions.
    I was pleased to be a member in 1997-98 of the National Commission 
on the Cost of Higher Education. The Commission put forward as its 
first recommendation:

That academic institutions intensify their efforts to control costs and 
    increase institutional productivity.

    The Commission then went on to make a series of recommendations on 
how to implement its call for enhanced cost control.
    The first implementing recommendation was:

Individual institutions, acting with technical support from appropriate 
    higher education associations, should conduct efficiency self-
    reviews to identify cost-saving steps that are relevant to 
    institutional mission and quality improvement.

    Since 1998, good foundational steps have been accomplished to 
enable institutions of higher education to carry out in a meaningful 
way the Commission's challenge. In particular, the National Association 
of College and University Business Officers, acting as part of a 
consortium of national higher education organizations, has developed an 
approach to the analysis of college costs which is adaptable to the 
wide variety of higher education institutions. The approach or model 
has been field-tested and is ready for widespread use.
    My basic idea is that a ``quality-efficiency task force'' should be 
formed at each institution. Its members should include faculty, 
administrators, students, trustees, parents, alumni, and business 
community leaders. The group should develop data on institutional costs 
in comparison with costs at peer institutions. The notion of ``peer 
institutions'' is crucial here, because it is simply not helpful to 
compare costs at dissimilar types of institutions. Every college and 
university has a self-selected group of peer institutions that it uses 
for comparisons and benchmarking for salaries, admission standards, 
etc. The idea is to use the same peer group for its analysis of 
operating costs. Such an analysis should identify areas where a given 
institution underperforms its peers, that is, operates more expensively 
to produce a similar result. These areas should then be targeted for 
in-depth analysis for cost reduction opportunities.
    It is necessary to add at this point that college communities 
usually focus on areas other than instruction when searching for cost 
savings. Again, the tendency is to assume, without investigation, that 
any attempt to enhance instructional productivity will have devastating 
effects on program quality. Yet, at most institutions, instruction is 
where most of the expenditures are. It is thus where most of the cost 
savings are likely to be discovered. Over the years, I have developed a 
``quality-efficiency index'' (see attachment) for instruction that 
seeks to find the golden mean between excessive and insufficient 
expenditures in the delivery of instruction. The areas of focus are: 1) 
The Faculty-Student Ratio (FTE:FTE); 2) Semester Hours of Required 
Teaching per Academic Year; 3) Utilization of Part-Time Faculty; 4) 
Maximum Section Size; and 5) Minimum Section Size. Only by careful 
analysis and control of these instructional features can most colleges 
and universities find substantial cost savings. The major savings are 
not to be found in pooled purchasing or inter-library loan, although 
these areas should be reviewed for savings, too.
    Given the follow-up on the National Cost Commission's 
recommendations accomplished since the last reauthorization, an 
appropriate role for the Federal government in the context of the 
current reauthorization would be to require colleges and universities 
to conduct such cost analyses and to develop action steps for attaining 
greater cost efficiency. The tools for this sort of exercise are in 
being; the public interest in cost control to preserve access is clear.
    Colleges and universities must now move forward decisively with 
greater cost control efforts, or else face highly interventionist and 
probably counterproductive governmental measures in the not too distant 
future. Thank you.
                  Quality Instruction Efficiency Index
    Space does not permit a full exposition of the QIEI, but the 
essential concepts are as follows:
    Criterion 1: The Full-time Equivalent ratio of students to faculty 
is a foundation indicator of both efficiency and quality. The index 
posits 20 as a hypothetical norm. Institutions with richer (lower) 
ratios are penalized on this measure; institutions with much higher 
ratios, implying a diminution of quality, also lose some points.
    Criterion 2: The QIEI focuses on instruction, since that is the 
principal service that students come to college to receive. Any 
excessive diversion of full-time faculty resources away from 
instruction erodes efficiency, while excessive teaching loads may 
impair quality. The norm is set at 25 semester hours per regular 
academic year, assuming that a full-time faculty member teaches 12 
semester hours (4 sections) in each semester, and that some faculty 
members opt to teach additional sections.
    Criterion 3: Usage of part-time faculty, if done with appropriate 
support and not excessive in focused areas, can greatly enhance 
efficiency. The norm is set at 15% of the sections offered per 
semester.
    Criterior 4: It is widely recognized that student participation in 
the learning process enhances the quality of the educational 
experience. The norm posited is a section size of 25, with deductions 
beyond the level of 30.
    Criterior 5: Small sections are the great bane of instructional 
efficiency, but sometimes essential in particular programs. 
Institutions need a policy (with very few exceptions permitted) on the 
minimum number of enrollees required for a course section to be 
offered. The norm is set at 15.
    The point of the QIEI is not to make all colleges conform to the 
same ``cookie-cutter'' approach. Rather, it is to provide a tool for a 
broadly participatory campus dialogue, including faculty, 
administration, trustees, and students on what choices the institution 
is making whether the choices are producing the desired results. The 
QIEI can also highlight and lift up for emulation, particular peer 
institutions which excel at maximizing both quality and efficiency.

Note: The foregoing material may be quoted or utilized only with 
author's permission.
                Prepared Statement of Jamie P. Merisotis
    Mr. Chairman and Members of the Committee: Thank you for this 
opportunity to testify before the Committee regarding issues for 
consideration in the reauthorization of the Higher Education Act (HEA).
    I would like to begin with a brief introduction to the Institute 
for Higher Education Policy and our role in the policy process. 
Established in 1993, the Institute is a non-profit, non-partisan 
research and policy organization whose mission is to foster access and 
success in postsecondary education through public policy research and 
other activities that inform and influence the policymaking process. 
The Institute's work addresses an array of issues in higher education, 
ranging from technology-based learning to quality assurance to 
minority-serving institutions. However, the Institute is probably best 
known for its studies and reports concerning higher education financing 
at all levels. Our studies and reports address topics ranging from 
federal and state student financial aid to state funding formulas to 
trends in institutional expenditures and revenues. We also have worked 
on higher education financing issues in the context of other nations, 
especially in southern Africa and Eurasia.
    The Institute's independent voice on these issues is well known. 
Our primary funding is derived from major foundations that are 
interested in supporting independent higher education research and 
analysis. We also have conducted a fair amount of analytic work at the 
behest of state governing and coordinating boards for higher education, 
and national governments outside the U.S.
    Earlier this year the Institute released a report entitled 
``Reauthorizing the Higher Education Act: Issues and Options.'' The 
goal of this report, which represents nearly two years of analytic 
effort under the direction of Institute Senior Associate Thomas 
Wolanin, is to provide you and the members of your staffs with clear, 
balanced information about the issues you may confront in this 
reauthorization and the tradeoffs associated with various policy 
options. The report does not make recommendations. I will not attempt 
to summarize the 10 major themes addressed in the report, but hope that 
you will see it as a resource to aid you in your work.
    In this reauthorization, you will face the ongoing challenge of 
promoting access to higher education for all Americans who have the 
interest and ability to attend college. Improving access to higher 
education continues to be one of the most important contributions that 
the federal government can make to our national well-being. The simple 
fact remains that increasing educational opportunities for all 
Americans results in tremendous public, private, social, and economic 
benefits. As the chart at the conclusion of my testimony points out, 
going to college is much more than just a process of enhancing one's 
personal economic status. The combination of societal and individual 
benefits of higher education must continue to motivate your important 
work on the Higher Education Act.
    So if investment in higher education matters, then maintaining and 
expanding that investment is critical. I recognize that the nation 
faces an uncertain economic future, one that places constraints on 
policy discussions such as these. But I hope you will not lose sight of 
the long-term effects that your investments will have on the nation. 
The programs established and defined within the HEA are now more 
necessary than ever. Investing in these programs is the best way to 
achieve the goals of prosperity, security, and harmony for all 
Americans.
    At the same time, I do not believe that more funding is the only 
thing that is needed. There are many policy alternatives and ideas to 
consider-and some to reject-in this environment. In that spirit, I 
would therefore like to offer a limited set of concrete programmatic 
options for your consideration.
    Invest in need-based student aid as the best and most important way 
to promote access to postsecondary education.
    In the early 1990s, a bipartisan federal commission called the 
National Commission on Responsibilities for Financing Postsecondary 
Education (for which I served as Executive Director) issued a widely-
circulated report called Making College Affordable Again. The 
legislation creating the commission, authored by Senator Jeffords of 
Vermont in the late 1980s, noted that the purchasing power of aid had 
been rapidly declining through the decade of the 1980s, leading to 
increasing concerns about access to postsecondary education. In 
commenting on the legislation, Senator Jeffords noted, ``Without 
affordable postsecondary education, without national support for 
meaningful access for able students to take advantage of higher 
education opportunities, we will not be able to accomplish any of the 
objectives that we strive for as a nation and a leader of nations.'' 
The final report of the commission, issued in 1993, recommended several 
important improvements to federal student aid, many of which have 
subsequently been enacted. But the Commission's major recommendation-to 
guarantee access to higher education for all students, based on a 
sliding subsidy scale tied to financial need-remains elusive. 
Regrettably, many of the commission's concerns regarding affordability 
and accessibility continue to resonate with students and families more 
than a decade later.
    While the current budgetary climate is an unfavorable one for 
significant new spending, I nevertheless continue to believe that 
investment in need-based financial aid is the best and most important 
contribution that the federal government can make to keeping the dream 
of a college education a reality for all Americans. The declining 
purchasing power of federal aid continues to be a critical barrier to 
access to higher education. The maximum Pell Grant today pays for about 
one-half of the average price of attending a public four-year 
institution compared to what the maximum Pell Grant paid for in 1980, 
even taking into account the funding increases of the last few years. 
Increased support for the Pell Grant program therefore should be a 
centerpiece of efforts to enhance the programs and policies in the 
Higher Education Act.
    You are also critically aware of the increasing pressures to 
simultaneously increase loan limits for some students to mitigate some 
of the effects of rising prices while also limiting the potential 
negative effects of increasing student debt. One way to meet these 
seemingly divergent goals is to increase loan limits modestly, 
especially for first and second year students, while also developing 
new opportunities for loan forgiveness. I have been skeptical of 
current loan forgiveness policies because of their limited size and 
scope. Most are well-intended but ultimately unfunded or under-funded 
programs that do little to meet the real concerns about rising student 
debt. On the other hand, a larger-scale loan forgiveness program tied 
specifically to areas of national need might be worth considering. This 
would be particularly useful in areas where there is an under-
representation of minorities and low-income populations, such as 
science, mathematics, engineering, information technology, minority 
health, and teaching.
    Reject attempts to control rising college prices through penalties 
that will harm both institutions and students, but consider creative 
incentives to promote innovations that will encourage cost control and 
sound financial management.
    Rising college prices are a legitimate concern for students and 
families, especially those from the lowest income levels. Average four-
year public college tuition is increasing much more rapidly as a 
proportion of income for the poorest quintile of families compared to 
other income groups. This means that the lowest income students and 
families are confronted with the greatest ``sticker shock'' compared to 
those from other income levels.
    In 2001 the Institute authored the Study of College Costs and 
Prices: 1988-89 to 1997-98, under subcontract with the National Center 
for Education Statistics. The study, which was mandated under the 1998 
Higher Education Amendments, found that the factors contributing to 
tuition increases are complex and vary by type of institution. The 
single most important factor associated with changes in tuition at 
public four-year institutions is reductions in state spending to 
support institutional operating costs. For private institutions, the 
equation is more complex, and includes both internal institutional 
budget constraints such as higher costs for institutional aid and 
faculty compensation, and external factors such as the availability of 
institutional aid, the price of attending a public institution in the 
same state, and per capita income in the state.
    Another important contributor to escalating tuitions is that the 
market allows it. Tuitions have now increased faster than the rate of 
inflation for more than 20 years, even as enrollments have continued to 
ratchet upwards. The students keep paying, so tuitions keep rising.
    State and institutional planning and budgeting processes don't 
help. Most institutions build their budgets by using the baseline of 
the prior year and simply adding to it. Few develop academic plans with 
any serious consideration of the likely sources and amounts of revenue 
needed to support those plans.
    Thus, rising college prices are part of a complex array of factors 
and processes that reflect the diversity of institutions and 
perspectives that make up the great system of American higher 
education. While it's important to tackle these root causes head-on, 
it's clear that no one one-size-fits-all solution will work across the 
nation. This is one reason why I think that federal attempts to control 
the prices charged by institutions would be unwise and potentially 
destabilizing. In my view, federal price controls represent an 
unprecedented attempt to control the prices of a competitive market. I 
am particularly concerned about efforts to uniformly limit the price of 
college based on inflation. The fact that the average tuition increases 
are above the CPI doesn't mean that all institutions are at or above 
that level-in fact, many are below it. So any attempt to control the 
price by linking it to the CPI strikes me as anti-competitive. 
Moreover, one potential unintended negative effect of federal price 
controls is that it could result in a substantial increase in tuitions 
at those institutions that are below the average.
    It's also clear that the complexity of higher education would 
require a fairly large bureaucratic machinery to regulate the pricing 
behavior of institutions. I don't like the idea of federal bureaucrats 
overriding the decisionmaking of publicly accountable boards and 
elected officials, and I don't think more federal bureaucrats are the 
solution to keeping college affordable. I would also note that the 
federal government's track record at controlling prices in other 
industries has been poor.
    In addition, the fact remains that efforts to penalize institutions 
for prices above some federally determined level would need to use a 
big enough ``stick'' to cause a change in behavior. The only stick 
large enough, in my view, would be the need-based student aid programs. 
This means that efforts to penalize institutions would instead likely 
have a negative effect on the very students for whom the federal aid 
programs are designed to help.
    On the other hand, there are ways in which you might consider 
creating positive incentives for institutions to do a better job of 
managing their financial operations, determining budgets, and 
controlling costs. One would be through the development of a modest 
competitive grant program to support institutional innovation. A FIPSE-
type program could be targeted on developing, refining, and 
disseminating new ideas for more effective budgeting and cost control, 
while continuing to support and enhance institutional quality. In fact, 
this program might also include an effort to attract corporate and 
foundation support, extending the partnership to other key players in 
the system.
    Another way to create positive incentives is via the federal 
campus-based programs, which include the Supplemental Educational 
Opportunity Grant program, the Federal Work-Study Program, and the 
Federal Perkins Loan program. Unlike the Pell Grant program and the 
Federal Stafford Loan programs, which are awarded directly to students, 
these campus-based programs function via allocation formulae that 
funnel money to institutions, which in turn award aid based on 
federally-defined standards. Since these programs are more closely 
linked to institutional decisionmaking than other forms of federal aid, 
it may be worth considering certain performance bonus criteria under 
the program. For example, institutional allocations could be enhanced 
via a supplement for institutions that improve or maintain their cost 
efficiency. It would be important under this type of a program for 
institutions to be judged as worthy of such bonus aid only compared to 
their own baseline, however, since the broad diversity of institutions 
and capacities would make cross-institution comparisons inappropriate.
    Strengthen the capacities of minority-serving institutions (MSIs) 
to educate the nation's emerging majority populations.
    Tribal Colleges and Universities (TCUs), Hispanic-Serving 
Institutions (HSIs), and Historically Black Colleges and Universities 
(HBCUs) and other predominantly Black institutions, which collectively 
are known as Minority-Serving Institutions (MSIs), represent some of 
the nation's most important but underserved postsecondary education 
resources. Combined, more than 1.8 million students are educated by 
these institutions.
    Given demographic projections that show these communities are the 
fastest growing in the nation, it is clear that MSIs must be recognized 
as a leading voice for the underrepresented populations that are the 
main focus of most HEA programs. MSIs have taken on the responsibility 
for educating large numbers of the nation's emerging majority 
populations of students, many of whom come from low-income, 
educationally disadvantaged backgrounds. These students find that MSIs 
offer a unique educational experience that fosters cultural values and 
traditions, promotes civic and community responsibility, and produces 
citizens who are attuned to the increasingly diverse country in which 
we live.
    MSIs also represent one of the fastest-growing sectors of American 
higher education. Enrollment is growing at all three groups of MSIs, 
increasing by an average of 22 percent between 1990 and 2000. By 
comparison, the average rate of enrollment growth in U.S. higher 
education during this same period was only 9 percent.
    Four years ago the three MSI communities came together to create a 
groundbreaking collaborative. The Alliance for Equity in Higher 
Education, created in 1999 by the American Indian Higher Education 
Consortium (AIHEC), the Hispanic Association of Colleges and 
Universities (HACU), and the National Association for Equal Opportunity 
in Higher Education (NAFEO), has been working on several important 
fronts to promote greater collaboration and cooperation among these 
communities. I have had the privilege of serving as the convener and 
facilitator of the Alliance since its creation, and have learned a 
great deal about the tremendous potential that exists in the individual 
and collective efforts of these communities.
    Building on the recommendations made earlier this year by the 
Alliance, I believe that several important steps could be taken during 
this reauthorization to strengthen the capacity of MSIs. One is to 
expand both the scope and authorization levels of Titles III and V to 
ensure the continued development and growth of MSIs. Additional funding 
is required for MSIs to reach a level of financial stability that 
ensures the students enrolled at these institutions receive the same 
quality academic programs offered by majority institutions.
    Congress also could take steps in this reauthorization to encourage 
improvements in the infrastructure and application of information 
technology at MSIs. The digital divide between better-funded and 
endowed majority universities and MSIs has impeded MSIs' ability to 
deliver state-of-the-art programs in information technology-related 
areas. Additionally, limited technology access has hindered MSIs' 
ability to meet administrative and student service needs.
    Investments must be made in both the technology infrastructure at 
MSIs-the hardware, software, and systems that drive technology-as well 
as the application of technology-training, upkeep, and the other uses 
of technology as a teaching and learning tool. This might be 
accomplished through the creation and funding of a new subpart under 
the Minority Science and Engineering Improvement Program (MSEIP) 
program. A new subpart would help to ensure that all graduates of MSIs 
will be able to use technology effectively and can pass invaluable 
information technology skills on to the communities in which they will 
live and serve. Such an effort could complement the kinds of support 
envisioned in the Senate's unanimous passage earlier this year of 
S.196, the Minority Serving Institution Digital and Wireless Technology 
Opportunity Act, sponsored by Senator Allen of Virginia.
    I also would urge you to consider the development of new graduate-
level opportunities to enhance the capacity of MSIs to train future 
faculty and senior institutional leaders. As the need for educational 
experiences and credentials beyond the BA continues to grow in the 
workplace, the significant under-representation of minorities in many 
advanced degree fields is a major concern. The limited graduate-level 
opportunities available to MSI graduates and other minorities can be 
enhanced through policies that support: the infrastructure of post-
baccalaureate education at MSIs-such as Ph.D. programs for schools 
currently offering Master's degrees; the recruitment and retention of 
minority professors; and the financial resources necessary to attain an 
advanced degree, including fellowships. These minority graduate 
fellowships should be provided to MSIs so that they can attract and 
retain minority students, including those who graduate from MSIs and 
those who commit to teach at these institutions.
    Finally, it would be useful to consider opportunities to expand 
support for international education at MSIs under Title VI. Such 
international program opportunities historically have been quite 
limited for the students served by MSIs. The creation of more programs 
outside the United States would assist MSIs in building relationships 
with foreign institutions and governments, creating understanding among 
diverse populations, and enhancing the likelihood that students at MSIs 
be considered for international positions. Such programs also could 
help to dramatically expand the international career horizons of the 
nation's emerging majority populations and thereby contribute to the 
country's global capacities and international competitiveness.
    Encourage private sector investment in aid to students.
    Government-sponsored grant and scholarship aid from both federal 
and state sources today totals more than $20 billion per year, plus 
another $40+ billion in guaranteed student loans. Direct support from 
institutions to students via grant aid also totals more than $17 
billion. But private scholarship support, often thought of as marginal 
or modest in its impact, also is growing in importance and stature. 
Private scholarship aid has long made a difference in the lives of 
students hoping to go to college. In fact, at about the same time that 
the National Defense Education Act of 1958 heralded the beginning of a 
series of governmental programs that have allowed millions of 
financially needy students to attend college, private scholarship 
assistance also became more organized and related specifically to 
meeting the country's educational, economic, and social needs. An 
optometrist from Fall River, Massachusetts named Irving Fradkin 
organized a community-based scholarship program in the late 1950s to 
help academically able and financially needy students go to college. 
The Citizens' Scholarship Foundation of America slowly expanded in the 
New England region, and eventually across the country, creating local 
scholarship foundations that contribute resources to assist students 
with college costs. In 2002, the national organization now known as 
Scholarship America distributed over $135 million to more than 100,000 
students through its community-based, volunteer-supported programs.
    Organizations like Scholarship America work in various ways with 
colleges and universities to offer a variety of scholarships and grants 
that include need-based, merit-based, and 'blended' forms of financial 
assistance to students. A subset of these providers recently banded 
together to form a network of more than 130 organizations known as the 
National Scholarship Providers Association (NSPA). NSPA estimates that 
its members offer more than $450 million in scholarships to more than 
200,000 students.
    While private scholarship aid never will--nor should--be seen as an 
alternative to federal financial assistance, it must be recognized as 
one of the key partners working to support students at the federal, 
state, institutional, and private levels. I therefore would encourage 
you to examine ways in which the HEA can be used to stimulate even 
greater response from local communities, corporations, foundations, 
organizations, and individual donors in the private sector.
    One specific way to do this is via the Leveraging Educational 
Assistance Partnership (LEAP) program, which encourages state 
governments to provide state tax dollars to assist students in their 
states to gain the critical benefits of postsecondary education. This 
program could be enhanced to leverage a much greater amount of aid for 
students if it were used to stimulate not just state dollars for 
student aid, but significantly increased private sector aid in each 
state as well. For example, in the state of Washington the legislature 
has provided small challenge grants to communities to encourage the 
creation of local scholarship fundraising chapters. As a result over 
100 new volunteer-supported, community-based scholarship chapters are 
now raising money each year to help their local students pursue 
college, university, or vocational education.
    The current LEAP legislation could be modified to reward those 
states where significant increases in student aid is produced by the 
states working in partnership with local community-based scholarship 
providers. This modest effort could also help to stimulate increasing 
awareness at the local community level about the importance of grant-
based assistance and the need for a broad partnership of providers to 
contribute to the national goal of making college possible for all 
Americans.
    These are clearly not the only options that you might consider 
during this HEA reauthorization to promote access to postsecondary 
education. Other witnesses at this hearing will be speaking to vital 
priorities and concerns that must be addressed, particularly as they 
relate to supporting enhancements to programs such as TRIO and GEAR UP 
that help students overcome various social, academic, and cultural 
barriers to postsecondary education. I will leave the specific 
recommendations regarding these programs to those with the most 
experience and expertise in providing essential services to low-income, 
first generation, and disabled students. Other important concerns that 
deserve consideration during this reauthorization include the 
regulatory burden that colleges and universities face, the capacity of 
higher education to meet increasing access demands via distance 
education and other efforts, and the growing challenge of understanding 
the potential linkage between need-based financial aid and federal and 
state tuition tax credits and deductions.
    Promoting access to higher education remains one of the most 
critical responsibilities of the federal government in ensuring the 
nations public, private, social, and economic stability and prosperity. 
Efforts such as those I have briefly outlined here could go a long way 
toward improving student access to higher education and fulfilling the 
American dream of a college education.
    Thank you again for this opportunity to appear before Committee on 
this important issue. I would be pleased to answer any questions you 
may have.




                  Prepared Statement of Shane Hollett
    Good morning. I am Shane Hollett, Executive Director of the Ohio 
College Access Network also known as OCAN. Mr. Chairman, I thank you 
for holding the Senate's first major hearing on reauthorization of the 
Higher Education Act and for extending this opportunity to OCAN. As a 
first-generation college graduate, I am honored to appear before you 
today to discuss an initiative I believe is key to helping many 
students get to college who would not otherwise go.
    Unfortunately, Ohio ranks 39th in the U.S. in percentage of 
population with a Bachelor's degree (Ohio Board of Regents, 2000). In 
response to this situation and the need for an educated workforce, the 
Ohio College Access Network (OCAN) was founded in 1999 by 
KnowledgeWorks Foundation in collaboration with the Ohio Board of 
Regents and Ohio Department of Education. OCAN works to establish 
community-based college access programs across Ohio. Our goal is to 
help as many Ohio students as possible pursue post-secondary education 
by helping to create new access programs and providing continuing 
assistance to access programs already operating throughout the state.
    What is a community-based college access program? It is a non-
profit organization embraced and supported by the community it serves, 
established and designed to increase the number of students who pursue 
education beyond high school. Access program advisors, volunteer or 
paid, work in high schools, community centers, and libraries to open 
the doors to postsecondary education by providing hands-on financial 
counseling, last dollar scholarships, college visits, career guidance, 
tutoring and test preparation courses.
    OCAN is the nation's first and only statewide coordinating body for 
college access programs. When we began in 1999, membership stood at 11 
programs stretched across Ohio. Two years later, 21 community-based 
access programs were members. Then in February 2002, Governor Bob Taft, 
in his State of the State address, challenged OCAN to double the number 
of programs and provided the financial means to do so.
    Today 33 OCAN college access programs serve nearly 300 of Ohio's 
612 school districts and 17 private/parochial schools in 46 of Ohio's 
88 counties, providing hands-on guidance and financial support to 
almost 96,000 high school students and to more than 135,000 students 
overall. And we are still growing.
    I was the first in my family to go to college. Neither one of my 
parents graduated from high school. My mother was a waitress all her 
life and my father spent 28 years serving his country in the army. But 
I went to college because they expected me to. They were my 
cheerleaders. They believed I could do it.
    Unfortunately, today many children do not have parents who believe 
they can or should go on to some form of education beyond high school. 
These young men and women become convinced they can't go: they're not 
smart enough; it's too expensive; it's not worth it; it's time to get a 
job.
    That's where OCAN and its member programs come in. Our programs 
range in size from Opening Doors of Opportunity serving two high 
schools in Millersburg (pop. 3,051) to Cleveland Scholarship Programs 
serving 50 high schools in Greater Cleveland (pop. 2,900,000). But they 
all have the same mindset: ``We're going to help you go to college.'' 
Their staffs serve as coaches, motivators, cheerleaders, and surrogate 
parents working day in and day out convincing Ohioans, young and old, 
of the need for education beyond high school and showing them how to 
get there.
    There are many barriers to going to college, and allow me to use 
the word ``college'' to cover all forms of accredited education beyond 
high school. In our experience, both cost and lack of information are 
the major reasons why young men and women do not attend college. Let me 
address the hot topic of the day: cost.
    According to the Advisory Committee on Student Financial 
Assistance, cost factors prevent 48 percent of all college-qualified, 
low-income high-school graduates from attending a four-year college and 
22 percent from pursuing any college at all. Students from moderate-
income families do not fare much better--43 percent are unable to 
attend a four-year institution and 16 percent are unable to enroll at 
any college. At this rate, according to the Advisory Committee, by the 
end of the decade more than two million college-qualified students will 
miss out on the opportunity to attend college.
    The National Center for Education Statistics study, Getting Ready 
for College, found that recent media attention on rising college costs, 
combined with a general lack of knowledge about the affordability of 
many colleges, may unnecessarily discourage some students and their 
parents from preparing for college. Also, a recent Harris Survey 
commissioned by The Sallie Mae Fund found that lowest income and 
Hispanic-American parents are most likely to say that they have ``no 
idea'' how they are going to pay for college. Further, lower income and 
minority parents are less likely to be able to identify common sources 
of financial aid.
    What do these findings show? Low-income and first generation 
students will continue to depend upon federal student assistance such 
as Pell Grants, Work-Study, and Federal Family Education Loans to pay 
for college. Unfortunately, many students don't know how to apply for 
this support, let alone come from families who know how to send their 
kids to college. They need information.
    Information. That is what college access is all about. College 
access programs provide the information that families need to: (1) 
believe it is possible for their children to go to college; (2) 
understand that a college education is not out of reach; and (3) 
understand how to pay for college tuition.
    Let me share with you two examples of the work of college access 
programs. In Zanesville, Ohio there was a young woman from a single 
parent family who wanted to go to college but was afraid to go to her 
high school guidance counselor because she believed her family secret 
would be revealed. The secret: her mother was dying of AIDS and she was 
convinced the illness would be revealed when she completed the FAFSA in 
the counselor's office. Plus she thought she was too poor to afford the 
tuition.
    The college access advisor working in her school learned of her 
plight through fellow students known as Scholarship Scouts. She 
approached the high school senior and asked her to visit the access 
program on a Saturday when no one was around to give her the ability to 
remain anonymous. After months of private counseling, the college 
access advisor gained the young woman entry into Muskingum College and 
she is now a sophomore getting straight A's.
    In Cleveland, I met a young man who was recommended to Cleveland 
Scholarship Programs for guidance and counseling. He came from a broken 
home. His father was in jail and his mother was lost to drugs. He was 
living with his grandmother who believed college was the way out of his 
circumstances.
    He impressed me with his quiet, respectful manner and I learned 
that he loved studying physics. His high school transcript indicated he 
was just an average student but there was something about him I liked. 
Something that made me believe that given the chance, he would do well.
    Cleveland Scholarship Programs provided him with scholarship 
support and helped him gain entry to Morehouse University. 
Surprisingly, he graduated with honors in physics. More surprisingly, 
he was accepted directly in Case Western Reserve University's doctoral 
program in molecular biology and physics.
    These examples show what college access programs can do for the 
young men and women of Ohio. OCAN, with the support of Governor Bob 
Taft, has built 12 new programs over the past year. It has been a 
challenging process but a rewarding one as well. What have we learned? 
It is evident that increased information and financial support are the 
keys to opening the doors of higher education to all students. However, 
our lowest income students are getting increasingly caught in the 
squeeze between soaring college tuitions and moderate increases in 
need-based aid to help them make the leap to become the first in their 
families to attend college.
    The reauthorization of the Higher Education Act presents us with 
the opportunity to address the growing need for college access programs 
across this country. Specifically, I ask that the committee consider 
the following principles:
    Cost and lack of information are the biggest barriers to going to 
college. Families need the services of college access programs to 
provide hands-on guidance and more information about all aspects of the 
college application process. Even in the year 2003, we cannot assume 
that every student has access to the Internet or that every student 
will be encouraged to seek out these opportunities.
    Successful community-based college access programs are built 
through public/private partnerships, collaborations that involve all 
within the community and do not presume that government support is the 
only source of program revenue. Community-based efforts need your 
support. Federal support for even just the start-up of these programs 
would go a long way towards increasing awareness that college is 
attainable and to connect students with existing federal programs and 
financial aid.
    Building college access programs in small urban and rural 
communities is a slow and time-consuming process. One cannot assume 
these communities have the sophistication or the means to quickly and 
effectively build non-profit organizations, even those they want and 
need. OCAN's national counterpart, the National College Access Network, 
receives inquiries every day from communities across the country that 
want to help their kids get to college. We need to provide these 
grassroots efforts with the resources and know-how to start serving 
these students.
    Lastly, we need to make it easier to apply for financial aid. We 
must simplify the FAFSA (Free Application for Federal Student Aid) by 
eliminating unnecessary questions, ``fast-tracking'' those students who 
have already qualified for other forms of federal aid, allowing for the 
variety of family and living situations students come from, and making 
the forms more user-friendly.
    Thank you for the opportunity to explain the work of and need for 
college access programs in Ohio and across the nation. The staffs of 
OCAN and its member programs are committed to helping all Ohioans 
achieve the dream of a college education. At the appropriate time, I 
would be pleased to answer your questions and share more about the 
rewarding and successful work of the Ohio College Access Network.
                   Prepared Statement of Troy Lambert
    Good morning, Mr. Chairman and Members of the Committee. My name is 
Troy Lambert and I am presently in my fourth year at the University of 
Maryland, College Park. I will graduate next year with a major in 
geography and a concentration in computer engineering. My current plans 
are to use my education to pursue employment working with global 
positioning systems. I am very pleased to testify this morning at this 
hearing on student financial assistance and access because without 
federal student aid--as well as institutional financial aid and the 
support of the federal TRIO programs--I would not be in college today.
    I am a graduate of Friendly High School in Southern Prince George's 
County, Maryland. I am the sixth of seven children and next year I am 
confident that I will become the first in my family to receive a 
bachelor's degree. My father works for the Water and Sewer Authority in 
the District of Columbia and my mother works for a small construction 
company from home.
    Last year I received $4,575 in grants and scholarships, $1,800 in 
work study and $5,500 in loans to cover nearly $1000 of about $13,000 
cost of attendance for a student who lives at home. This included: 
$2,350 in Pell, $1,625 in University of Maryland grants and 
scholarships, $600 in SEOG, $1,800 in work study and $5,500 in Stafford 
loans. However, because I made an error in submitting my FAFSA and 
missed an application deadline for aid this year, I will continue to 
receive Pell, I will not receive aid from the university or SEOG.
    I live at home with my parents and also work 26 to 30 hours each 
week as a security officer at the Environmental Protection Agency. 
Typically during the week I work from 6 a.m. until noon, take the metro 
to the University and finish classes between 4:30 p.m. and 7:30 p.m. 
Last year, Pell, SEOG and University assistance covered all of my 
$5,500 in tuition, thus allowing me to assist with expenses at home. 
This year, the university increased tuition 13% and due to this 
increase and the lateness of my application I have to cover more 
tuition with loans and my earnings.
    This morning I would like to address four topics from my own 
experience related to student financial aid and access to higher 
education: 1) the importance of providing information about attending 
college and financial aid to low-income and first-generation students, 
2) obstacles to retention and graduation for low-income students, 3) 
issues related to work and college attendance, and finally, 4) issues 
related to accumulated loans.
       information regarding college admission and financial aid
    Although I graduated with a 4.0 average from high school, I was not 
regularly admissible to the University of Maryland because of my SAT 
scores. My family had moved while I was in high school and no one at 
school was able to help me sort out my postsecondary options. Members 
of my church helped me find the University of Maryland's Educational 
Opportunity Center (EOC) in New Carrollton, a Federal TRIO Program. 
Staff at the EOC discussed my choices with my parents and myself, and 
assisted me in securing special admission to the University of Maryland 
through the Academic Achievement Program. The Academic Achievement 
Program is another University initiative, partially supported through 
TRIO Student Support Services Program.
    I don't think the needs that my family and I had for information 
and assistance about college are unique. The cost of one year of my 
undergraduate education at a public university is several months of my 
parents' total income. Today, on average it takes 62% of a low-income 
family annual income to send one child to college for one year (Access 
Denied, 2001). While there are a number of other factors the have major 
impacts on college access--for example, differentials in academic 
preparation available among high schools, differences in family 
support--just information and the sheer ``ticket price'' of college 
made it seem almost impossible for many of my friends to enter college. 
One can see the results nationally.
    While 82% of students from families in the top income quartile 
continue on to college, only 55% of students in the bottom quartile do 
so (Mortenson, 2001). Moreover, at least in large part because of 
costs, students from families with income below $25,000 who do go to 
college, only about half begin at four-year institutions because of 
expenses.
    Nor was my need for information about student aid eliminated when I 
entered college. Three times in the course of my enrollment, I 
encountered serious problems in trying to understand what I needed to 
do to continue to receive adequate aid: first, when I became over 
committed in terms of work; a second time, when my mother was diagnosed 
with cancer last year and my family responsibilities increased; and 
again, this year when the University increased tuition in response to 
state budget cuts--and I compounded those problems by missing a 
financial aid deadline. In each instance, the TRIO program office--
working closely with the University's financial aid office--helped me 
through a situation that could have resulted in my withdrawing from the 
University.
                        retention and graduation
    In my own college experience, I have encountered at least three 
sets of obstacles that challenged my commitment to remain in school and 
graduate. The most serious was last year when my mother was diagnosed 
with breast cancer. Although she is presently doing well, the costs of 
her medical care placed a real burden on our family's resources and we 
accumulated substantial debt. I just needed to be with her and my 
brothers and sisters more often. I am now contributing part of my 
earnings to help my family pay those bills. In addition to family 
pressures, academic pressures often cause students to consider dropping 
out. When I first came to the University, I intended to major in 
computer engineering but did have problems with physics, as well as 
some of the advanced mathematics courses. I hadn't taken some courses 
in high school, such as calculus and other advanced placement work, 
that would have better prepared me for the University. However, both 
the Academic Achievement Program's pre-freshman summer program--and the 
tutoring, academic support and encouragement I received from this TRIO 
program--increased my resolve to stay in school and graduate. It 
doesn't escape me that many of my friends that graduated from my high 
school are presently working in custodial jobs at EPA where I work, or 
in sales at drugstores or at fast food restaurants.
    A final problem that could have resulted in my dropping out of 
college was the extent to which I was working in my sophomore year. I 
realized that I couldn't maintain my grades and work the number of 
hours that I was putting in.
    The factors I saw in my own life are reflected in national figures. 
Students whose parents didn't graduate from college, first-generation 
students, are 64% more likely to leave school without a degree than 
children of college graduates. 45% of first-generation students who 
first enroll in four-year colleges leave school without a degree 
compared to 29% of students who are children of college graduates.
                       college students and work
    Certainly, while I am pleased to be able to work to assist my 
family and pay my living expenses, I recognize that work can be a 
barrier to success in college. The typical low-income student served by 
TRIO in Student Support Services works 26 hours per week (NPSAS, 2000) 
and more than 57% of college students work over 24 hours per week 
(Crucial Choices, 2002). This Committee is well aware of the complexity 
of this issue.
    Most low-income and middle-income students work. Some work to cover 
basic expenses such as food and lodging not covered by financial 
assistance, while others work to cover costs that exceed the basic 
``cost of attendance'', such as travel or a newer model car. But 
working--for whatever reason--can not only distract a student for 
study, but can also have the effect of reducing eligibility for student 
aid in subsequent years. I am quite sure a large number of TRIO 
students are grateful that you are examining this problem.
                                 loans
    Over the course of four years, I have taken out slightly over 
$18,000 in loans--both Perkins and Stafford loans. This is slightly 
lower than the average amount for all borrowers, (NPSAS, 2000). I have 
chosen to work, rather than borrow more extensively because I want to 
be in a position to continue to assist my family when I graduate. If I 
borrow an additional $4000 next year, my loan payment will be over $250 
monthly. While from the perspective of many middle or upper class 
income families, $22,000 in accumulated debt does not appear excessive, 
the perspective is somewhat different from where I stand. A low-income 
student who begins college knowing the obstacles to graduating, and 
knowing that more than half of his friends who started college at two 
or four-year institutions dropped out--and that they left college 
without significantly increasing their earning capacity.
    Senators, I appreciate your giving the hopes and struggles of 
students like me your thought and attention. Thank you.
                   Prepared Statement of Hector Garza
    Mr. Chairman and members of the Subcommittee, let me start by 
expressing our appreciation for the opportunity to submit this written 
testimony for the record on promoting access to postsecondary 
education.
    On behalf of the over 1.2 million students, their schools and 
districts, higher education and business partners, community and faith-
based organizations and the 47 states that are involved with GEAR UP--
it is indeed a privilege for me to represent them today.
    Because NCCEP has signed on as a supporter to other reauthorization 
proposals submitted by sister associations and the higher education 
community as a collective, my remarks will focus primarily on the 
question related to promoting access and educational opportunities for 
low-income and underserved students.
    Specifically, I want to focus exclusively on ways to expand and 
improve an already successful program known as GEAR UP.
    Our extensive involvement with GEAR UP practitioners and their 
partners places us in a unique position to represent their interests 
and articulate some of the changes and improvements to the GEAR UP 
program that we, as a community, believe are necessary.
    With respect to the federal college access programs, we believe 
that GEAR UP and TRIO should be maintained as separate complementary 
programs and expanded to collectively serve larger number of students, 
schools, and communities.
    Each of these important college access programs offers unique 
approaches and services to low-income and first-generation college 
students.
    To consolidate the programs would be a mistake.
    Of the two, GEAR UP is the younger and more contemporary using 
research-driven practices that focus on what matters most- student 
achievement and academic success.
    GEAR UP partnerships already are documenting impressive changes in 
students' achievement levels as well as changes in educational 
practices that will serve as lasting reforms to K-16 systems.
    The central question, then, is how can we make an excellent college 
access program even better?
    We believe that the programmatic thrust and work of GEAR UP 
partnerships are central to helping schools, districts, and states 
efficiently implement the No Child Left Behind Act.
    In GEAR UP, the administration has a model program that can help 
ensure that no child is left behind.
    GEAR UP is the mechanism to ensure a smooth education transition 
for all children.
    This model, encompassing local strategies and community engagement 
with a coordinated state presence, is precisely the type of federal 
program that should be improved and expanded to serve all states and 
more communities.
                            recommendations
    1. We encourage Congress to increase the GEAR UP funding period 
from five to six years. Support the President's FY 2004 proposal and 
add an additional year to the program. Existing GEAR UP grantees could, 
then, ensure their students access to postsecondary education (funding 
7th--12th grades).
    2. We encourage Congress to increase the authorization level of 
GEAR UP to $500 million. We believe Congress can play a leadership role 
in expanding GEAR UP to serve students-in all 50 states-by increasing 
the program's authorization level and provide the Department with 
resources to open up new application processes.
    3. We encourage Congress to clarify the legislative language that 
would allow both state and partnership grantees to apply for second 
phase of the grant. Addressing the fact that there is NO ``wait out'' 
period is important as programs desire to reapply for grants to sustain 
early efforts to promote student achievement and system(s) change. 
Grant renewal, however, will be based on ``successful performance'' and 
not ``prior experience''.
    Several studies have concluded that effective education reforms not 
only takes time to develop and implement but also requires a sustained 
effort continually improving and adjusting the education strategies 
implemented using a top-down and bottom-up grassroots approach.
    These comprehensive and systemic reform models being implemented 
through GEAR UP are precisely the locally effective practices the 
Congress needs to support.
    4. We encourage Congress to exclude partnership grants from 
proposing a scholarship component. The scholarship component should be 
left exclusively to state grantees. Local communities rarely have the 
capacity to fundraise and manage complex scholarship programs that 
involve out years and forward funding and may not have the requisite 
experience to ensure that a student is appropriately ``packaged'' as 
required by law. Providing scholarships should remain a role for state 
grantees, though waivers for states with appropriate need-based student 
aid programs should also be made available.
    5. We encourage Congress to appropriate supplemental resources to 
improve the capacity of GEAR UP grantees to conduct project-level 
evaluation. While project-level evaluations are the cornerstone for 
measuring program impact, we are concerned that GEAR UP partnerships 
have not been provided the necessary technical assistance by the 
Department's evaluation staff or their evaluation contractor.
    As with many other education reform initiatives, at least three 
years is necessary to get organized and to begin to function 
effectively as an education partnership.
    GEAR UP partnership teams are just now ready to more effectively 
use local and state student achievement data to refine their programs, 
policies, and practices.
    As the technical assistance provider for GEAR UP partnerships, 
NCCEP stands ready to work with the Department to help build the 
organizational and individual capacities of GEAR UP partnerships to 
conduct better project-level evaluations and measure program impact.
    We believe that our proven track record and organizational capacity 
in the area of K-16 partnership assessments will help GEAR UP grantees 
to conduct better evaluations and to use their data and analyses to 
improve their programs.
    Moreover, the GEAR UP community has repeatedly expressed concern 
about what is perceived as disconnect between the data reported through 
the Annual Performance Review (APR) and the unique design of the local 
GEAR UP program. I will add, however, that we are working closely with 
the Department to revise and enhance the report for the future.
    Many program directors see little relevance between the data 
collected through APR and their specific program interventions. Our 
concern is that a flawed methodology and data collection system will 
fail to produce the type of evaluation that will be necessary to 
demonstrate the programs' real impact.
    In addition, program evaluations should have value locally and 
should be designed to guide program directors in making program 
adjustments and mid-course corrections.
    Thus, we reemphasize that grantees use the NCCEP-sponsored GEAR UP 
conferences and capacity-building workshops as a way to gain valuable 
insight from the field and to refine the project-level evaluation 
strategy as a way to improve local GEAR UP programs.
    6. We encourage Congress to require the Evaluation Contractor to 
form a learning community made up of GEAR UP program and NCCEP 
evaluators, the Department of Education's evaluation and GEAR UP 
program staff, and academic researchers who study college access 
programs and K-16 partnerships. We continue to be concerned bout the 
way in which the Evaluation Contractor-Westat, in this case-has 
organized itself to conduct the GEAR UP evaluation.
    This contractor has failed to demonstrate a willingness to immerse 
itself in the trenches of partnership work as a way to understand the 
inner workings of the program as well as left the GEAR UP community 
suspicious of the Contractor's role and function.
    Repeated attempts to engage the Contractor in meaningful 
conversations with GEAR UP practitioners have proven futile, 
heightening mistrust.
    Further, the Contractor should be encouraged to participate and 
assume a supportive role at the national GEAR UP conference and 
capacity-building workshops.
    7. We encourage Congress to urge the Secretary to use GEAR UP 
Appropriations to open new grant competitions every year. In 
maintaining the intent of the legislative language, the Secretary is 
directed to use annual appropriations to provide broader access to GEAR 
UP programs for communities in need.
    Therefore, as the level of GEAR UP funding increases so should the 
number of grants that are awarded. Since 2002, the Department of 
Education has chosen to ``forward fund'' existing grantees instead of 
providing opportunities for new communities to apply for GEAR UP 
grants. We believe this is contrary to the Higher Education Act's 
legislation.
    In closing, we offer the following reflection:
    GEAR UP is founded on the adage, ``Give a hungry person a fish and 
he eats for a day; teach him to fish and he can eat for a lifetime.''
    GEAR UP teaches students, parents, teachers, and schools ``how to 
fish''--how to learn, what to learn--so they can feed-educate-
themselves and the generations that will follow.
    Mr. Chairman and members of the Subcommittee, my staff, the GEAR UP 
constituency and I look forward to working with you over the coming 
months to ensure that GEAR UP is neatly and efficiently reauthorized 
under the Higher Education Act of 1965.
    Thank you for the opportunity to submit this written testimony.
                                 ______
                                 
  National Association of Independent Colleges and 
                               Universities, NAICU,
                                 Washington, DC 20036-5405,
                                                  October 16, 2003.
    Dear Members of the Health, Education, Labor and Pensions 
Committee: As you consider the vital work of how to expand 
opportunities for individuals to attend college, I would like to give 
you some information on what the nation's independent colleges and 
universities are doing to provide access to a broad array of students 
from diverse backgrounds, and to create an educational environment in 
which they are likely to earn their degrees on time. I hope you can 
include this in the official record of today's hearing on access.
    The following information is from NAICU's publication 12 Facts That 
May Surprise You About America's Private Colleges and Universities 
which draws from data collected by the Department of Education's 
National Center for Education Statistics. In the report, you will see 
evidence that:
     Thanks to grants and scholarships, most students pay less 
than the published tuition at private colleges and universities.
     The average tuition that students pay at private colleges 
has actually declined over the past decade, once you subtract grant aid 
and adjust for inflation.
     The proportion of students from racial and ethnic 
minorities, from low- and middle-income families, or who have 
dependents and support themselves who attend private colleges is almost 
the same as at 4-year State institutions.
     All types of students--regardless of race/ethnicity, 
family income, or academic preparation--are as likely to earn their 
degree in 4 years at a private college or university as they are in 6 
years at a State institution.
    If you would like any additional information, I would be happy to 
provide it to you.
            Sincerely,
                                           David L. Warren,
                                                         President.
                                 ______
                                 
  Prepared Statement of the American Association of Community Colleges
    The American Association of Community Colleges (AACC) is pleased to 
submit this statement on the state of access in American higher 
education as it relates to the reauthorization of the Higher Education 
Act (HEA). AACC represents almost 1,100 public and private, associate 
degree granting, regionally accredited institutions, and serves as the 
national voice for community colleges.
    To a large degree, the growth that is commonly referred to as ``the 
community college movement'' occurred largely because of the programs 
authorized by the HEA. In the fall of 2001, community colleges had 
credit enrollments of over 6 million students, and about 5 million 
noncredit students. These numbers have surged over the last few years, 
a trend that shows no signs of abating. Community colleges are usually 
the first choice for the workers challenged by our sluggish economy. 
Most of our colleges report that the recent spikes in enrollments, 
which have pressed our institutions to the limit, have been due to both 
the ``baby boom echo'' of traditional college-aged students, as well as 
older individuals who are employed or recently became unemployed. 
Indeed, the largest category of growth last year (2002-03) in eligible 
applicants for the Pell Grant program was for independent students with 
children--a staggering 13.6%.
    Community colleges enroll 44% of all U.S. undergraduates (measured 
in terms of head-count), and 45% of first-time freshmen. Almost two-
thirds, 63%, are enrolled on a part-time basis of fewer than 12 credit 
hours. The average age of our students is 29 years. Because community 
colleges enroll 46% of all African-American undergraduate students,
    55% of all Hispanic students, and 46% of Asian/Pacific Islander 
students in higher education, they pride themselves on being the 
``Ellis Island'' of higher education.
     title iv programs and participation in postsecondary education
    As Congress sets to reauthorize the HEA, it deserves thanks for 
having done so much to make college possible for those who otherwise 
would not have had the chance to improve their lives through higher 
education. The college continuation rate for recent high school 
graduates has risen from 47% in 1973 (just as the central student aid 
programs of the HEA were being implemented) to 62% in 2001. The genius 
of creating a student-focused system in which aid is delivered to the 
individual, for use at the college of his or her choosing, has 
repeatedly proven itself. But this investment is one that not only 
accrues to the individual; our economy would be incalculably weaker if 
not for the increased education and training fostered by the Title IV 
programs.
    Student aid works. AACC strongly supports the current programs and 
basic structure of the HEA, and does not believe that the Act is flawed 
in any fundamental way. Rather, reauthorization provides an opportunity 
to make a system that is working well function even better. Our 
colleges view themselves as having a pact with the federal government: 
community colleges strive to keep tuitions as low as possible, but for 
those who cannot meet the cost of education, the need-based programs in 
Title IV of the HEA are there to fill the gap. And there is a consensus 
that the HEA has proven extremely efficient and effective in providing 
financing to students and families who need resources to attend 
college.
    Federal student aid represents close to 70% of all the student aid 
made available across the country (most of the rest consists of 
institutional grants from private colleges). American higher education 
would be radically different without it. Furthermore, the student 
financial aid programs are well targeted-those who need financial 
assistance the most are generally those who receive it. More than 90% 
of all Pell Grant funds are awarded to students with family incomes of 
less than $40,000.
    Unfortunately, the job of promoting equal access to postsecondary 
education is not yet complete. Access to college remains highly 
stratified by income. Over the last 25 years, a ``rising tide'' has 
lifted the college participation rates of students across the income 
spectrum fairly equally, with the largest gains occurring in the second 
lowest income quartile. This is a great achievement. Unfortunately, the 
persistence gap between less affluent and more affluent students has 
widened over that time. And, despite the gains in overall college 
access, the gaps in college participation across the various income 
bands have remained fairly consistent. We believe these gaps must be 
eliminated; with that will come the end of the current condition in 
which low-ability, high-income students are likelier to attend college 
than low-income, high ability students.
what have parents, students and taxpayers gained from the investment in 
                           higher education?
    The short answer is: the best system of higher education in the 
world, a system that is not only the envy of other countries but also 
the nation's sixth largest net export. Support for higher education has 
fostered the world's strongest economy, with productivity gains 
resulting from a better skilled workforce as well as the research 
conducted in America's colleges and universities. The holders of a 
bachelor's degree, with no education beyond that, can answer this 
question by responding that, on average (according to the U.S. Census 
Bureau), they have received about $750,000 more in lifetime earnings 
compared to those holding just a high school diploma. Those with an 
associate degree could answer that their lifetime earnings increased by 
about $335,000 compared to high school graduates. Obviously, complex 
sets of aptitudes and abilities give rise to these enhanced earnings. 
However, higher education is not just about earnings. Our higher 
education system produces a better-informed citizenry that participates 
in civil and political discourse, essential to a smoothly functioning 
democracy. Our society benefits, tangibly and intangibly, from a better 
educated populace.
                  community colleges and the workforce
    A first principle of community colleges is providing their local 
communities with the workers they need. A correlate goal is to provide 
individuals with the skills that they need to attain economic 
independence. In the last 25 years, the percentage of workers with an 
associate degree, certificate, or some college has more than doubled 
from 12% to 27% of the workforce. According to the Department of Labor, 
occupations requiring a postsecondary vocational award or an academic 
degree, which accounted for 29 percent of all jobs in 2000, will 
account for 42 percent of total job growth from 2000 to 2010. The array 
of occupational programs offered by community colleges is truly mind-
boggling, and permeates every sector of the economy. Our colleges pride 
themselves on their entrepreneurial nature.
    In all of the fields in which high-profile labor shortages exist, 
such as teaching, nursing, information technology, and first 
responders, community colleges are on the front lines, offering 
programs designed to address these pressing needs. For example, 48% of 
all applicants taking the national registered nurse examination to 
become licensed professional registered nurses were graduates of 
associate degree programs, and these graduates pass that examination at 
the same rate as those who have attended four-year colleges. 65% of new 
healthcare workers get their training at community colleges. Community 
colleges also train and credential 85% of the nation's first 
responders-police, firefighters, and emergency medical technicians.
    Community colleges do not receive adequate recognition for their 
role in educating the nation's teachers. It is estimated that at least 
25% of the graduates of undergraduate programs in teacher training 
began their postsecondary education at community colleges. Community 
colleges provide this initial teacher preparation, but are also heavily 
engaged in professional development for K-12 teachers; post-
baccalaureate certification for undergraduate majors in non-teaching 
fields; encouraging high school students to enter the teaching field, 
and training the paraprofessionals whose skills must be enhanced as a 
result of the ``No Child Left Behind'' law. Consequently, AACC is 
proposing that a small new program in the HEA be created to help 
community colleges further their activity in this critical area. We 
seek a national competitive grant program of $20 million.
    States consciously use community colleges in their economic 
development strategy, through programs that are designed in part to 
attract and keep businesses. A recent survey by the Education 
Commission of the States showed that at least 21 states provide special 
funding to community colleges to train workers for high-demand 
occupations. Thirty-two states provide funding to support customized 
training for employers.
    Most colleges contract directly with a wide variety of businesses 
to provide the customized training to meet their needs. These programs 
are developed rapidly according to customer specifications. 95% of 
businesses and organizations that use them recommend community college 
workforce education and training programs.
                       the accountability debate
    Community colleges embrace the accountability discussion because 
they are already highly accountable. In fact, colleges already provide 
a great deal of accountability information to federal, state, and local 
governments and accreditation agencies, and welcome every chance they 
have to explain how they are accountable for the funds they receive.
    Proponents of greater accountability often claim that community 
colleges and other higher education institutions graduate an 
insufficient percentage of their students, or that their program 
quality is lacking. The astonishing diversity of higher education, 
whose non-profit institutions alone serve more than 16 million students 
each year, tends to get lost in these generalizations.
    Community colleges alone have an enormous variety of programs and 
goals: to provide basic transfer education in academic areas; to give 
adult basic education to those who need it; to allow incumbent or 
unemployed workers to upgrade their skills; to provide language 
education for those who lack facility in English; and to help 
businesses get the workers they need in short order. These various 
functions will have different desired outcomes attached to them. It is 
also important to remember that not all students who enroll at a 
community college plan to earn an associate degree.
    The competitive nature of higher education ensures that the 
ultimate goals of accountability-quality and efficiency-will be 
generated. The portable nature of the federal student aid programs 
neatly complements our competitive higher education system, empowering 
people to make their own choices about which college suits them best, 
whether they be deciding between Stanford University and the University 
of California at Berkeley, or between Kingsborough Community College in 
New York and the local ITT Technology Institute. Students themselves 
know better than anyone else how committed they are to completing a 
program.
    Community colleges currently report substantial amounts of 
performance-related information to a variety of external bodies, and 
this includes the federal government. States provide about 42% of the 
overall annual revenues of community colleges and local governments add 
another 18%. These entities have developed extensive and growing 
reporting requirements. AACC has provided some information on state 
reporting to the Committee. Accrediting bodies and the sponsors of 
other programs, government and private, also demand reporting of 
various kinds, including reporting on outcomes. Accreditation also 
demands continual institutional self-assessment, a data-driven process. 
For example, an important focus of the Middle States Commission is on 
learning outcomes assessments. The North Central region has a process 
that parallels the National Baldrige quality model.
    Congress obviously has a legitimate need to ensure that its 
enormous investment in student financial aid is well spent. However, 
community colleges urge this Committee to think carefully before it 
places new accountability mandates on institutions. We believe that the 
focus should be on providing data that will help students make more 
informed choices about the college best suited to their needs and 
goals. Wherever possible, Congress should strive to let colleges use 
information that they are already generating for other purposes.
    In its May 23 HEA reauthorization submission to this Committee, 
AACC stated the openness of its member institutions to report to the 
federal government new outcomes information. We also think that 
different types of institutions should provide different types of 
information. For example, many community colleges will want to report 
on the attainment of skills certificates and industry certifications by 
their graduates, as well as their wage gains. Liberal arts colleges may 
find these measurements inappropriate to their missions and programs. 
Congress should recognize that the 3,600 non-profit institutions of 
higher education, which now enroll over 16 million students, should not 
be looked at through the same lens.
    Congress should also ask if it is always desirable for every 
student to graduate, or whether colleges are now being used for other 
purposes as well. Community colleges are under extreme pressure from 
local employers to provide more short-term training to help workers 
keep pace with changing skill requirements. A growing body of data 
shows that significant economic gains accrue to those who receive some 
postsecondary education, but not a degree. According to the Census 
Bureau, in 2001 the average salary of a high school graduate was 
$23,470. The average salary for an individual who had attended a 
postsecondary institution but had not attained an associate degree was 
$28,245-a difference of almost $5,000, more than 20%. In addition, the 
children of those who attend any amount of postsecondary education are 
much more likely to enroll in college than those whose parents have no 
postsecondary education experience. The fact that these students don't 
receive a sheepskin is no sign of failure.
    In this reauthorization, Congress should focus on the enormous 
impediment to graduation created by the huge and growing number of 
students who are working. Studies show that when students work more 
than 15 hours per week, their likelihood of graduating declines 
sharply. Unfortunately, according to the National Center for Education 
Statistics, in the 1999-2000 academic year 84% of community college 
students worked, 54% of them full-time. Almost 30% of all full-time 
students also worked full-time. This intensity of work involvement may 
be due to student financing needs, or because the student was employed 
full-time before enrolling in college. Nationally, according to the 
National Advisory Committee on Student Financial Assistance, low-income 
students average 24 hours of work each week. Common sense suggests that 
a lack of persistence and graduation will correlate with part-time 
enrollment in college; the longer it takes a student to complete his or 
her coursework, the likelier that external factors will deter that 
student from achieving a degree or certificate.
    Community colleges accept from the start that, for many reasons, 
not all of their students will graduate. Some important factors include 
lack of adequate financing; the rigors of employment; family and other 
personal reasons; or because a student's goal of improved employment 
prospects have been met. In addition, some students are able to 
transfer to a four-year institution without obtaining a two-year 
degree. Furthermore, in some cases students will find that college is 
just not right for them. However, community colleges ardently believe 
that these cases are the unavoidable consequence of a system that 
operates with an open-door admissions policy, and that what some might 
label a failure is rather an ongoing, but reasonable, price that the 
nation's system of higher education must absorb. Congress should 
remember that, for community colleges nationally, 61% of the cost of 
educating students rests with state and local governments.
                            college tuitions
    Students, their families, and legislators have good reason to be 
worried about college costs. For many college students, tuition is 
rising faster than family incomes, a situation that causes deep and 
persistent concern throughout higher education. Community colleges are 
particularly sensitive to tuition increases because of their high 
enrollments of low-income students, for whom relatively small tuition 
hikes can stand in the way of enrollment.
    Community colleges are surprised and disappointed by the current 
battery of criticisms about college tuitions. The simple fact is that 
college tuitions are, across a broad range of institutions, extremely 
affordable, and represent the best investment most individuals will 
ever make. According to the College Board, in the fall of 2002 the 
average tuition and fees charged at a two-year public institution of 
higher education was just $1,735. The average tuition and fees charged 
by public four-year colleges were $4,081. Roughly 80% of the students 
in non-profit higher education attend these institutions. The average 
cost of a baccalaureate degree at a four-year public college is now 
about two-thirds of the average cost of a new American automobile. 
Therefore, it is hard to understand why tuition charges are thought be 
inordinate, given the economic returns that accrue to participation in 
higher education as outlined above. Also, the tuition that students pay 
is only a small fraction of the overall costs of educating them, 
whether it be at a public or independent institution.
    Community colleges raise their tuitions as a last resort. It is 
just plain wrong to think otherwise. Last fall, tuitions at two-year 
public institutions rose on average by 7.9%. This regrettable hike came 
after a series of tuition increases in academic years 1995-96 to 2000-
01 that, according to the National Center on Education Statistics, were 
as follows: 3.9%, 2.9%, 3.0%, 1.0%, 0.8%, and 1.6%--an average of 2.2%. 
On average, community colleges receive 61% of their revenues from state 
and local sources. When these are cut, particularly at a time of 
enrollment growth, there is almost no alternative to increasing 
tuitions. Fortunately for students, tuitions represent only 22% of the 
overall revenues of community colleges.
    In virtually every case, the recent large tuition increases were a 
direct outgrowth of state and, in some cases, local funding reductions. 
These cuts have been unprecedented in their severity, and have often 
occurred in the middle of the academic year. The current round of 
tuition hikes came after community colleges were forced to tell faculty 
that they were being laid off, or notify students that classes they 
were counting on to complete their programs were being cancelled, or 
that candidates who had expected to be enrolling in nursing or other 
high-demand programs would have to wait another year. We regret to 
report that a recent AACC survey indicate that community college 
tuitions will be rising this coming fall at an even higher overall 
percentage than they did last year, more than 11 percent. The colleges 
have no choice.
    AACC strongly contests the claim that federal student aid increases 
cause higher tuitions at community colleges. For example, between the 
1995-96 and 2001-02 academic years, thanks to generous appropriations, 
the maximum Pell Grant was increased by $1,410, from $2,340 to $3,750. 
Over that same span, according to the College Board, the average 
tuition and fees at two-year public institutions increased by just 
$278, from $1,330 to $1,608. Also during this period, the Hope 
Scholarship tax credit of up to $1,500 was put into place. It simply is 
not true that institutions consider the availability of federal aid 
when setting their tuitions. (In many states, of course, tuition is set 
by legislatures, not the colleges.) Community colleges are pleased to 
report that this strong Congressional support for the Pell Grant 
program has translated into increased access. In fact, the Pell Grant 
recipient pool increased by almost one million students, to 4.9 
million, over just the last two years.
    Lastly, it may be that certain factors endemic to the academic 
enterprise cause the cost of educating students to rise at a faster 
rate than most other goods and services. For better or worse, college 
is a labor-intensive enterprise in which the application of technology 
to achieve productivity gains is not possible to the degree that it is 
in manufacturing and even other service industries. And the cost of 
technology itself is dear. However, community colleges strive to keep 
their costs of education as well as the tuitions they charge at levels 
that allow for widespread access. Their average cost of educating a 
student is about 60% that of educating a student at a public four-year 
institution.
                          college preparation
    As Congress looks at the state of higher education, it should focus 
on college preparation. College is the key to the American dream, but 
not all students are given the same tools to take advantage of it. 
Academic achievement from the earliest ages remains strongly tied to 
economic background. Numerous studies show that college participation 
is related to students taking rigorous high school curriculums. 
Hopefully, reforms in elementary and secondary education will result in 
greater numbers of students taking more challenging academic coursework 
and succeeding at it.
    More than any other sector of higher education, community colleges 
pay the price for under-prepared students. This is becoming ever more 
the case as four-year institutions ratchet up their admissions 
standards. Community colleges are open-door institutions, but that is 
not the same thing as allowing students to enroll in the program of 
their choice. Community colleges routinely undertake assessments of all 
new students so that they can determine their readiness for specific 
programs. They devote large amounts of resources to providing education 
designed to ready students for their offerings. Some of this is 
delivered to recent high school graduates, while much of it is provided 
to individuals who have been out of school for years. Remedial math is 
more frequently required than reading or writing; the need for these 
services is concentrated in urban areas.
    For community colleges, it is not just a matter of selecting the 
best students, but bringing out the best in all the students who apply 
themselves in our colleges. The federal government is a big element in 
the fulfillment of this mission.
    AACC is pleased to have the opportunity to submit this testimony to 
the Committee. The Association looks forward to working cooperatively 
with the Committee over the coming months as it undertakes the 
important responsibility of reauthorizing the HEA.
        Prepared Statement of the American Council on Education
    On behalf of the American Council on Education (ACE) and the eight 
associations endorsing this document, we are pleased to submit this 
statement for the record and for your consideration as you begin to 
work on the reauthorization of the Higher Education Act. We 
congratulate the committee for choosing access as the topic for its 
first hearing on reauthorization. All of the associations that have 
signed onto this statement generally support these recommendations. 
Many of the associations that have signed this letter have or will 
submit their own specific statements that address some of these ideas 
in greater detail.
    Ensuring equal educational opportunity to college for all those who 
aspire to attend without regard to their means or economic status has 
been the compelling rationale for the Federal role in higher education 
since the 1970's. It is the guiding vision that is carried out through 
the various need-based Federal student aid programs, and it is the 
reason that the Higher Education Act centers predominately on student, 
rather than institutional, aid. As we move steadily into the 21st 
Century, the importance of this compact between the Federal Government 
and America's students remains as essential now as it has ever been.
    That said, we also recognize that participation in higher education 
is a function of several different factors: understanding the value of 
higher education, having adequate information about appropriate 
educational programs, having the academic preparation to enroll and 
succeed in higher education, and having the financial resources to 
participate. We believe the Federal Government has an important role to 
play in all of these areas and in making a college education more 
accessible to more students.
    In spite of the substantial gains in minority participation in 
higher education documented in the recently issued ``20th Anniversary 
Minorities in Higher Education Status Report'', low income and minority 
students remain underrepresented in higher education in comparison to 
their more affluent peers. We believe that attacking this problem 
requires that all students and families have excellent information 
about the importance of higher education, that adequate amounts of 
student financial assistance--especially grant assistance--be provided 
to help overcome financial barriers, and that high-quality, early 
intervention, and support programs be available.
    Grant assistance is especially important to improving access to 
higher education for low-income students and the Pell Grant program is 
America's most important method to accomplish that goal. Thanks to 
generous funding increases in recent years, the real (i.e. after 
inflation) value of the maximum Pell Grant increased 29 percent between 
1990-91 and 2002--03. Unfortunately, the real maximum grant--even with 
the recent funding increases--has not grown to the level achieved in 
the early years of the program. This is cause for authentic alarm when 
understood in light of the fact that the average income of families in 
the lowest income quintile has declined slightly in real terms since 
the early 1970's. As a result, paying for college now requires a larger 
share of a low-income family's annual income than it did when the Pell 
Grant program began. When sufficient grant aid is not available, 
students face difficult choices: work an excessive number of hours, go 
further into debt, or abandon college altogether.
    Our institutions recognize their responsibility to develop coherent 
student retention strategies that tie together recruitment, admission, 
financial aid, academic advising, and student support services as part 
of a campus-wide effort. Often this involves redirecting scarce 
resources toward initiatives designed to improve access and retention. 
Among residential colleges, for example, most institutions offer 
students the opportunity to live in learning communities, housing 
students together with other students taking similar majors and classes 
so that built in study and support groups can be formed. Academic, as 
well as residential advisors, are routinely assigned to dormitories. 
Counseling, tutoring and advising services have been expanded and made 
readily available. The experience of one institution, the Chicago State 
University, is illustrative. Their model for student success addresses 
students' needs at three stages of their educational careers. At the 
precollege level, students are guaranteed success through activities 
designed to keep them in school as well as prepare them for college. 
This entails an extensive early outreach program that touches 25,000 
students in 90 elementary and secondary schools. At the undergraduate 
level, students are guaranteed success through quality educational 
programs and appropriate safety nets. And at graduation, the potential 
for success in careers and graduate study is guaranteed through 
activities provided by the Career Development Center and the Graduate 
Studies Office. This is not the only model that has proven successful. 
Throughout the nation, committed colleges and universities are working 
hard to improve educational opportunity and retention.
    To help low and middle income students afford higher education, 
most colleges now provide significant amounts of institutional student 
aid. In 2000-01, colleges and universities made $14.5 billion in 
student aid available to students and families, an increase of 92 
percent over the last decade. In other words, the amount institutions 
spent on student aid has increased faster than tuition.
    Put another way, last year, the amount spent on student aid from 
colleges exceeded the total amount spent on Pell grants, work-study, 
Perkins loans, Supplemental grants, LEAP, and GI Bill benefits 
combined.
    With increasing enrollments, a limited pool of resources from 
Federal and State Governments, and a struggling economy, institutions 
provide needy students and families with the resources to bridge the 
affordability gap. For example, in 1992 the University of Maryland 
System institutions provided $19 million in aid. In 1999 this amount 
was $34.5 million. In 2001, it was $55.3 million.
    In spite of efforts like this, institutions cannot compensate for 
massive State withdrawal of resources and the current stagnant nature 
of Federal commitment to higher education.
    A bright light has been focused on the massive recent State 
cutbacks in support for public higher education, and the resulting 
decisions by State after State to shift the financing burden to 
students and their families through steeply increased tuitions. Less 
well understood is that over the past 20 years, State support for 
higher education has been diminishing as higher education's share of 
State appropriations has declined. A recent Policy Brief, titled 
``Higher Education Spending: The Role of Medicaid and the Business 
Cycle,'' by Thomas J. Kane and Peter R. Orszag, paints a discouraging 
picture. According to its authors, ``The underlying story that emerges 
is that State fiscal pressures, especially Medicaid, have been crowding 
out appropriations for higher education. The pattern from the 1990s 
suggests that reductions in higher education appropriations are 
implemented during an economic downturn, and then made permanent by a 
failure to raise appropriations substantially during the subsequent 
economic recovery. Since roughly three-quarters of all college students 
in the U.S. attend public institutions, the implications for the 
nations higher education system are profound.''
    In May of this year, we submitted a set of proposals outlining how 
the Federal Government can assist with access issues. While our list 
remains largely unchanged, we believe it is important to highlight 
those proposals once again.
    Double the Pell Grant Maximum--First, we strongly urge Congress to 
make a firm commitment to doubling the appropriated Pell Grant maximum 
award within a 6-year time frame that coincides with the passage of the 
reauthorization legislation, and to conform the annual authorized 
maximums to this overarching goal. \1\ The maximum Pell Grant award now 
covers 68 percent of the average price of attending a public 2-year 
college, 34 percent of a public 4-year institution, and only 13 percent 
at a private 4-year institution. By contrast, in 1976-77, the maximum 
Pell Grant covered 94 percent of the average price at a community 
college, 72 percent at the public 4-year and 35 percent at the private 
4-year college. In order to achieve this same purchasing power, the 
maximum award would have to increase to around $7,000.
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    \1\ Several associations--United Negro College Fund, National 
Association for Equal Opportunity in Higher Education, Hispanic 
Association of Colleges and Universities, United States Student 
Association, and National Association of Student Financial Aid 
Administrators--propose making the Pell Grant program a full 
entitlement. The other associations endorsing this statement do not 
believe this is achievable without the bipartisan support of Congress 
and the administration. We encourage the administration to take this 
bold step in its reauthorization proposal.
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    Congress has taken significant steps over the last 6 years to 
increase the maximum Pell Grant in the annual appropriations bills. Now 
with the passage of No Child Left Behind and the demographic growth 
currently being felt on college campuses, we will have more college-
ready students than ever before. We feel the next step in this debate 
is to significantly increase this fundamental grant for students. 
Because reauthorizations draw increased attention to the importance of 
key Federal programs, we feel strongly that now is the time to ask 
Congress to double the funding of the maximum Pell Grant. We urge that 
this targeted doubling of the award levels be embraced as a campaign 
initiated by the authorizing committees, but taken to Congress as a 
whole. Similar campaigns have paved the way to measurable increases for 
the National Institutes of Health and the National Science Foundation. 
Given the real and symbolic importance of the Pell Grant as an 
expression of the nation's commitment to equal educational opportunity, 
we ask that Congress make a commitment to doubling the maximum grant.
    Raising the maximum Pell Grant to $8,000 is a critical step toward 
restoring the Federal Government's commitment to access. While some may 
question whether this is an attainable objective, we would reply by 
citing the fact that the House of Representatives voted earlier this 
year to approve vouchers in the amount of $7,500 per child to permit 
families in the District of Columbia to send their children to private 
and parochial elementary and secondary schools. If $7,500 is deemed a 
reasonable proxy for a year of elementary school, there can be little 
question about the inadequacy of a $4,050 grant for a college 
sophomore.
    Protect the Maximum Appropriated Award--We believe that the Pell 
Grant program is fundamentally sound and does not need significant 
modification. However, the program's periodic shortfalls have created 
the misimpression among students and families that the grants might 
have to be reduced. To address this problem, the HEA should be modified 
to protect the appropriated maximum award. The statute should 
explicitly state that the annual maximum award level appropriated by 
Congress cannot be reduced ex post facto by the Department of 
Education. We will oppose any effort to give the Executive Branch the 
authority to reduce grants after the enactment of an appropriations 
bill. We do not believe that these critical student benefits should be 
subject to manipulation based on fluctuating estimates of the program's 
cost.
    Permit Year-Round Study--Students increasingly want the flexibility 
in their educational programs to study year round. For example, many 
students would like to complete their academic degree in less time than 
the standard 2- or 4-year program because such a step reduces the 
amount of time that a student spends in school, and reduces educational 
expenses. States and schools believe that year round study makes better 
use of campus facilities (an important consideration in States facing 
significant increases in enrollments). In addition, some students 
require additional time to fulfill degree completion requirements and 
year round study would let them finish degree requirements more 
quickly. Year-round attendance, we believe, would increase student 
persistence and graduation from college. Current regulations governing 
the Pell Grant program assume that all students will enroll for just 
two semesters per calendar year. While the Department of Education has 
the authority to implement a ``year-round'' Pell Grant, it has been 
reluctant to do so. Therefore, we ask Congress to mandate that students 
who wish to study year-round receive a Pell Grant that enables them to 
do so.
    Increase Support for the Supplemental Educational Opportunity 
Grant--We seek to increase the number of grant-rich student aid 
packages for low-income students. We believe that the Supplemental 
Educational Opportunity Grant (SEOG) is especially important in this 
regard. The SEOG provides grant assistance to students with exceptional 
financial need in addition to funds that they may have received under 
the Pell Grant program. Conceptualized as the partner program to the 
Pell, SEOG awards help the poorest Pell Grant recipients. The program 
works well and could move closer to its original intent by raising the 
authorized funding level to $1.25 billion. With additional Federal 
funding, this important grant program could help low-income students 
pay for more of their college education with grants instead of loans.
    Revitalize the Federal-State Student Aid Partnership--As part of 
this effort to provide more grants, we encourage Congress to take steps 
to revitalize the Federal-State partnership in providing student aid to 
financially needy students and families. In recent years, many States 
have diverted scarce need-based student aid dollars to increasing 
merit-based aid programs. While such programs provide welcome 
assistance to those who receive them, they do little to help low-income 
individuals who do not qualify for them. To increase State grant 
support for low-income students, we recommend that Congress revitalize 
the Leveraging Educational Assistance Partnership (LEAP) program, which 
seeks to boost State spending on need-based student aid.
    The Federal-State partnership is key to ensuring access to higher 
education and providing additional grant dollars in a student's aid 
package. With institutions of higher education absorbing widespread 
reductions because of the current fiscal stress of State budgets, 
Congress should look to reinforce the LEAP State grants by increasing 
the authorized funding level to $200 million, and efforts should be 
made to ensure that the Federal dollars go to serving more low-income 
students.
    Designate ``Campus-Based'' Programs as Institutional Partnerships--
We ask that the ``campus-based'' aid programs be designated as 
``Institutional Partnership'' programs to better communicate the three 
components that work together to make college possible: the Federal 
investment, the institutional investment, and the State investment. 
SEOG, Federal Work-Study and Perkins Loans are critical pieces of many 
students' financial aid package, and institutions are a critical piece 
of making those packages work. Re-designating these programs as 
``Institutional Partnership'' programs will reinforce the effort that 
institutions of higher education make to ensure that students have the 
financing they need to pay for college. Moreover, given the 25 percent 
matching requirement mandated by law, we believe the new label more 
aptly describes their function.
    As mentioned, the SEOG program should be better funded to realize 
its original intent of providing additional grant funding to the 
neediest students.
    The Federal Work-Study program has nearly reached its goal of 
serving one million students with over $1 billion in Federal 
investment. This program places students in jobs on campus, in the 
campus community, and in the private sector to help them pay for 
college.
    The Perkins Loan program continues to provide an extremely low 
interest rate for student loans. Forgiveness options for work in law 
enforcement, teaching, and nursing have made this program more and more 
popular.
    These programs work well in their current form, but to further 
enhance these programs, the authorized funding levels for fiscal year 
2005 should be raised as follows:
     SEOG should be increased to $1.25 billion
     Federal Work-Study should be increased to $1.25 billion
     Perkins Loan Capital Contributions should be increased to 
$300 million
    Maintain and Modify the Perkins Loan Program--The Perkins Loan 
Program remains an exceptionally valuable part of the Federal student 
aid portfolio and we encourage Congress to maintain it with three 
specific but important changes. \2\ First, student loan limits ought to 
be adjusted to account for changes in the cost of living. We recommend 
that loan limits be increased to a maximum of $5,500 for undergraduate 
borrowers and $10,000 for graduate /professional students. Consistent 
with this change, we believe that the undergraduate cumulative loan 
limit ought to be reset to $27,500 and the graduate/ professional limit 
to $67,500.
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    \2\ UNCF favors terminating the Federal Capital Contribution (FCC) 
for the Perkins Loan program and transferring those funds to a new 
``Super Pell Grant'' Program/FSEOG. Although no longer receiving FCC, 
institutions could continue to operate a completely deregulated, 
campus-based student loan, work or grant program for Title IV eligible 
students using their Perkins Revolving Fund monies.
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    Second, we encourage Congress to explore ways to simplify, 
streamline, and strengthen loan forgiveness provisions in the Perkins 
Loan Program. Third, we urge Congress to require consolidation lenders 
to provide clear and comprehensible disclosures to Perkins borrowers 
about the advantages and disadvantages of consolidating their loans, 
especially regarding any potential loss of Perkins benefits that would 
result from consolidating their loans.
    Support the ``DREAM Act''--The ``Development, Relief, and Education 
for Alien Minors Act'' or DREAM Act, S. 1554, would permit States to 
determine State residency for higher education purposes and provide 
alien college-bound students with the opportunity to obtain legal 
status. Currently, Federal law provides that undocumented children 
cannot be excluded from attending elementary or secondary school in the 
U.S. However, several States deny in-state tuition and student 
financial assistance to these same students once they graduate from 
high school because Federal law requires that if a benefit is offered 
to undocumented individuals, it must be offered to all U.S. citizens. 
Many States have interpreted this to mean that if they charge in-state 
tuition to undocumented students, the State must also offer in-state 
tuition to out-of-state students as well.
    We urge the committee members to support this legislation, that 
would clarify current law and as another opportunity to provide access 
to students who are well-prepared for a college education and deserve 
the chance to pursue it.
    Expand the Efforts to Ensure Students with Disabilities Receive a 
Quality Education--In the 1998 reauthorization, Congress created a new 
program, ``Demonstration Projects to Ensure Students with Disabilities 
Receive a Quality Education'' to boost enrollment of disabled students. 
This modest program is designed to address low participation rates of 
students with disabilities through model demonstrations, technical 
assistance, and professional development for faculty, staff and 
administrators. In order to address the significant under-
representation of students with disabilities in higher education, we 
strongly urge Congress to expand this program as part of the 
reauthorization to increase access to higher education for students 
with disabilities.
    Expand the Child Care Access Means Parents in School Program--We 
strongly support extension of the Child Care Access Means Parents in 
School program. This program is designed primarily to assist those 
students for whom college participation hinges on whether they can 
obtain childcare. Childcare centers that apply for funds under this 
program must demonstrate that the center serves the needs of low-income 
students enrolled at the institution. In addition to providing basic 
child care services, funds can be used to: provide before- and after-
school services when it is necessary to enable Pell Grant-eligible 
students to attend college; develop curriculum for programs, faculty, 
and staff; and provide other program enhancing measures. At present, 
there are over 2,000 on-campus childcare centers for the children of 
students and only 425 of them receive some assistance under this 
program. Expanding access to on-campus childcare will help increase 
access to postsecondary education for low-income students.
    Stafford Federal Student Loans--In our formal proposal, sent to you 
earlier this year, we made several formal recommendations on the loan 
programs. In an environment of budget deficits, intense competition for 
discretionary appropriations and stagnant levels of grant funding, 
loans have become an essential component of access to college for 
nearly every student. Federal student loans offer better terms and 
conditions than other sources of loan capital and, since loan limits 
have not been adjusted since 1992, considerable evidence suggests that 
students are borrowing increasing amounts of money from private sector 
loans. We favor a change in student loan limits to give borrowers more 
access to loans that carry the lowest possible interest rate and the 
best possible terms, such as the in-school interest exemption and 
deferments. However, since the relationship between grant funding and 
access has been well established, we have elected to make that the 
focus of this statement.
    The U.S. has the premier system of higher education in the world. 
No other nation has embarked on such an ambitious objective as the 
American commitment allowing its citizens to go as far as their talents 
will take them. At its heart, this commitment relies on a 4-decade long 
partnership between the Nation's colleges, the States, and the Federal 
Government and it has accomplished a great deal. But, we can do better 
and should do better to make sure that more individuals, especially 
from low-income and disadvantaged backgrounds have better access and 
opportunities to attend college. We look forward to working with you to 
achieve these goals and strengthen this commitment.
    On behalf of:
    American Association of State Colleges and Universities
    American Council on Education
    Association of American Universities
    Association of Jesuit Colleges and Universities
    National Association of College and University Business Officers
    National Association of Independent Colleges and Universities
    National Association of State Universities and Land-Grant Colleges
    National Association of Student Financial Aid Administrators

    [Whereupon, at 11:28 a.m., the committee was adjourned.]

                                    

      
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