[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
PAYING FOR COLLEGE: HIGHER EDUCATION
AND THE AMERICAN TAXPAYER
=======================================================================
FIELD HEARING
before the
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
September 1, 2006, in Greeley, Colorado
__________
Serial No. 109-56
__________
Printed for the use of the Committee on Education and the Workforce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
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______
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COMMITTEE ON EDUCATION AND THE WORKFORCE
HOWARD P. ``BUCK'' McKEON, California, Chairman
Thomas E. Petri, Wisconsin, Vice George Miller, California,
Chairman Ranking Minority Member
Michael N. Castle, Delaware Dale E. Kildee, Michigan
Sam Johnson, Texas Major R. Owens, New York
Mark E. Souder, Indiana Donald M. Payne, New Jersey
Charlie Norwood, Georgia Robert E. Andrews, New Jersey
Vernon J. Ehlers, Michigan Robert C. Scott, Virginia
Judy Biggert, Illinois Lynn C. Woolsey, California
Todd Russell Platts, Pennsylvania Ruben Hinojosa, Texas
Patrick J. Tiberi, Ohio Carolyn McCarthy, New York
Ric Keller, Florida John F. Tierney, Massachusetts
Tom Osborne, Nebraska Ron Kind, Wisconsin
Joe Wilson, South Carolina Dennis J. Kucinich, Ohio
Jon C. Porter, Nevada David Wu, Oregon
John Kline, Minnesota Rush D. Holt, New Jersey
Marilyn N. Musgrave, Colorado Susan A. Davis, California
Bob Inglis, South Carolina Betty McCollum, Minnesota
Cathy McMorris, Washington Danny K. Davis, Illinois
Kenny Marchant, Texas Raul M. Grijalva, Arizona
Tom Price, Georgia Chris Van Hollen, Maryland
Luis G. Fortuno, Puerto Rico Tim Ryan, Ohio
Bobby Jindal, Louisiana Timothy H. Bishop, New York
Charles W. Boustany, Jr., Louisiana [Vacancy]
Virginia Foxx, North Carolina
Thelma D. Drake, Virginia
John R. ``Randy'' Kuhl, Jr., New
York
[Vacancy]
Vic Klatt, Staff Director
Mark Zuckerman, Minority Staff Director, General Counsel
C O N T E N T S
----------
Page
Hearing held on September 1, 2006................................ 1
Statement of Members:
Mckeon, Hon. Howard P. ``Buck,'' Chairman, Committee on
Education and the Workforce................................ 1
Prepared statement of.................................... 3
Musgrave, Hon. Marilyn N., a Representative in Congress from
the State of Colorado...................................... 4
Statement of Witnesses:
DeMuth, Debra L., director, College Access Network and
CollegeInvest.............................................. 32
Prepared statement of.................................... 33
Gardner, Hon. Cory, Colorado State representative............ 12
Prepared statement of.................................... 14
Kobach, Kris W., professor of law, University of Missouri--
Kansas City School of Law; senior counsel, Immigration and
Reform Law Institute....................................... 7
Prepared statement of.................................... 9
Liddell, Dr. Marilynn, president, Aims Community College..... 35
Presentation............................................. 37
Polis, Jared, vice chairman and member at large, Colorado
State Board of Education................................... 17
Prepared statement of.................................... 19
Shaw, Theresa S., Chief Operating Officer, Federal Student
Aid, U.S. Department of Education.......................... 25
Prepared statement of.................................... 27
Additional Material Submitted:
National Association for College Admission Counseling
(NACAC), prepared statement of............................. 46
PAYING FOR COLLEGE: HIGHER EDUCATION AND THE AMERICAN TAXPAYER
----------
Friday, September 1, 2006
U.S. House of Representatives
Committee on Education and the Workforce
Greeley, CO
----------
The committee met, pursuant to call, at 9 a.m., in Panorama
Room, University Center, University of Northern Colorado, 2045
10th Avenue, Greeley, Colorado, Hon. Howard P. ``Buck`` McKeon
(chairman of the committee) presiding.
Present: Representatives McKeon, Musgrave.
Staff Present: Amy Raaf, Professional Staff Member; Lindsey
Mask, Press Secretary; James Bergeron, Director of Member
Services and Coalition Outreach.
Chairman McKeon. The Committee on Education and the
Workforce will come to order.
Thank you. We are holding this field hearing today to hear
testimony on paying for college, higher education and the
American taxpayer. With that, I ask unanimous consent for the
hearing record to remain open 14 days to allow member
statements and other extraneous material referenced during the
hearing to be submitted in the official hearing record.
Without objection, so ordered.
Thank you all for joining us here today at this morning's
hearing. I especially want to thank our witnesses for agreeing
to testify, as well as my Education and WorkForce Committee
colleague, a strong member of the committee, Congresswoman
Musgrave, who is hosting us here today, and I really appreciate
the invitation to come to this beautiful part of the country.
You are blessed to live here.
Ms. Musgrave. I believe that; yes.
Chairman McKeon. The topic of today's hearing is rather
self-explanatory. Paying for college, higher education and the
American taxpayer.
This title reminds us of the very real stake our Nation's
working and taxpaying families have in U.S. colleges and
universities.
Institutions like the University of Northern Colorado are
on the front lines in keeping America competitive with our
global counterparts, and to do that, taxpayers at both the
state and Federal levels have been asked to contribute to
programs aimed at expanding college access.
At the Federal level, our commitment to student aid is
great and grows with each passing year. Last year, some $90
billion in Federal dollars funded student aid programs, from
loans and grants to work-study programs and education tax
benefits.
That is nearly triple what it was just a decade ago.
Support for higher education has been a priority of our Nation
for some time. More than four decades ago, when the Higher
Education Act was enacted, the purpose of this hefty investment
was clear--to expand college access. The goals remain the same
today.
However, faced with an increasingly competitive global
economy in which postsecondary education is more necessary than
ever, ensuring that Federal dollars are spent effectively and
efficiently is a bottom-line issue for students, parents, and
taxpayers alike. And that is really what today's hearing is all
about--examining our record on efficiency and effectively
utilizing taxpayer resources to fulfill our priority of
expanding access to college.
The congressional record on college access is one of which
I am proud. As I noted, over the past 10 years, Federal student
aid benefits have nearly tripled, and in just this year alone,
we have taken unprecedented steps to reaffirm our commitment to
college students and their families.
For example, we reduced excessive Federal subsidies for the
student loan industry, maintained current law written by
Republicans and Democrats alike, in 2002 and 2003, to establish
a low fixed rate for student loans, which will provide millions
of students greater financial security in the years to come.
Increased loan limits for students, so they can borrow more
during their initial and most critical years in college.
Provided additional grant money so more high-achieving, low-
and middle-income high school students can attend college, and
established a new scholarship program for high-achieving
college students studying math, science, and critical foreign
languages in college.
All of those new student benefits are the law of the land
right now. Earlier this year, the House also voted to make Pell
grant funding available year around, to empower parents and
students through ``sunshine'' and transparency in college costs
and accreditation, and strengthen minority-serving institutions
across the country.
In short, on matters related to higher education, this has
been a busy and a productive year. Each and every one of these
new benefits we voted to establish this year fulfills our
priority to expand college access, and, indeed, they represent
an efficient and effective use of taxpayer resources.
I will be eager to discuss these benefits with our
witnesses later this morning.
Unfortunately, some in Washington, and frankly, in many
state capitals across the Nation as well, have championed
policies that I believe reflect nothing less than misplaced
priorities when it comes to college access.
Our first panel of witnesses will testify on what I believe
to be one of these policies.
This summer, there has been a great deal of attention
focused on the illegal immigration crisis our Nation currently
faces. Much has been written about the House and Senate-passed
bills to respond to the growing problem, and it is certainly
not my intent to rehash every aspect of that debate at this
hearing.
However, since the hearing has been called to examine the
use of taxpayer resources to expand college access, I believe
one specific element of the debate does warrant closer
attention.
Buried deep within the Senate-passed immigration bill,
commonly referred to as the Reid-Kennedy bill, is a provision
to repeal a 1996 Federal law that prohibits states from
offering in-state tuition rates to illegal immigrants, unless
that state also offers the same benefit to all U.S. citizens.
In essence, the Reid-Kennedy bill would provide a benefit
meant for taxpayers, in-state tuition rates to illegal
immigrants who, by definition, don't pay taxes.
Understandably, the inclusion of this controversial repeal
in the Reid-Kennedy bill has raised eyebrows among many Members
of Congress, this one included.
As we convene today to discuss the efficient and effective
use of taxpayer resources to expand college access, I can't
help but think that providing benefits for illegal immigrants,
that aren't provided for all law-abiding American citizens, is
neither efficient nor effective.
Before us today are two panels of witnesses. The first will
address the Senate's proposed expansion of in-state tuition for
illegal immigrants, and the second will examine congressional
efforts to expand college access for U.S. students.
I thank both panels for joining us today and I am eager to
hear their testimony on the matters before us.
[The prepared statement of Mr. McKeon follows:]
Prepared Statement of Hon. Howard P. ``Buck'' McKeon, Chairman,
Committee on Education and the Workforce
Thank you all for joining us at this morning's hearing. I
especially want to thank our witnesses for agreeing to testify, as well
as my Education & the Workforce Committee colleague, Congresswoman
Musgrave, for hosting me here in her district. It's a pleasure to be in
Colorado.
The topic of today's hearing is rather self-explanatory--``Paying
for College: Higher Education and the American Taxpayer.'' This title
reminds us of the very real stake our nation's working--and tax
paying--families have in U.S. colleges and universities. Institutions
like the University of Northern Colorado are on the frontlines in
keeping America competitive with our global counterparts. And to do
that, taxpayers at both the state and federal levels have been asked to
contribute to programs aimed at expanding college access.
At the federal level, our commitment to student aid is great--and
grows with each passing year. Last year, some $90 BILLION in federal
dollars funded student aid programs--from loans and grants to work-
study programs and education tax benefits. That's nearly TRIPLE what it
was just a decade ago.
Support for higher education has been a priority of our nation for
some time. More than four decades ago, when the Higher Education Act
was enacted, the purpose of this hefty investment was clear: to expand
college access. The goal remains the same today.
However, faced with an increasingly competitive global economy in
which postsecondary education is more necessary than ever, ensuring
that federal dollars are spent effectively and efficiently is a bottom
line issue for students, parents, and taxpayers alike. And that's
really what today's hearing is all about: examining our record on
efficiently and effectively utilizing taxpayer resources to fulfill our
priority of expanding access to college.
The congressional record on college access is one of which I am
proud. As I noted, over the past ten years, federal student aid
benefits have nearly tripled. And in just this year alone, we have
taken unprecedented steps to reaffirm our commitment to college
students and their families. For example, we:
Reduced out of control federal subsidies for the student
loan industry;
Maintained current law written by Republicans and
Democrats alike in 2002 and 2003 to establish a low, fixed-rate for
student loans, which will provide millions of students greater
financial certainty in the years to come;
Increased loan limits for students so they can borrow more
during their initial--and most critical--years in college;
Provided additional grant money so more high-achieving,
low- and middle-income high school students can attend college; and
Established a new scholarship program for high-achieving
college students studying math, science, and critical foreign languages
in college.
All of those new student benefits are the law of the land RIGHT
NOW. Earlier this year, the House also voted to make Pell Grant funding
available year-round, empower parents and students through ``sunshine''
and transparency in college costs and accreditation, and strengthen
minority-serving institutions across the country.
In short, on matters related to higher education, this has been a
busy--and productive--year. Each and every one of these new benefits we
voted to establish this year fulfill of our priority to expand college
access. And, indeed, they represent an efficient and effective use of
taxpayer resources. I'll be eager to discuss these benefits with our
witnesses later this morning.
Unfortunately, some in Washington--and frankly in many state
capitals across the nation as well--have championed policies that I
believe reflect nothing less than misplaced priorities when it comes to
college access. Our first panel of witnesses will testify on what I
believe to be one of those policies.
This summer, there has been a great amount of attention focused on
the illegal immigration crisis our nation currently faces. Much has
been written about the House and Senate-passed bills to respond to the
growing problem, and it's certainly not my intent to rehash every
aspect of the debate at this hearing. However, since the hearing has
been called to examine the use of taxpayer resources to expand college
access, I believe one specific element of the debate does warrant
closer attention.
Buried deep within the Senate-passed immigration bill, commonly
referred to as the Reid-Kennedy bill, is a provision to repeal a 1996
federal law that prohibits states from offering in-state tuition rates
to illegal immigrants unless that state also offers the same benefit to
all U.S. citizens. In essence, the Reid-Kennedy bill would provide a
benefit meant for taxpayers--in-state tuition rates--to illegal
immigrants, who by definition don't pay taxes.
Understandably, the inclusion of this controversial repeal in the
Reid-Kennedy bill has raised eyebrows among many Members of Congress--
this one included. As we convene today to discuss the efficient and
effective use of taxpayer resources to expand college access, I can't
help but think that providing benefits for illegal immigrants that
aren't provided for all law-abiding American citizens is neither
efficient nor effective.
Before us today are two panels of witnesses. The first will address
the Senate's proposed expansion of in-state tuition for illegal
immigrants, and the second will examine congressional efforts to expand
college access for U.S. students. I thank both panels for joining us
today, and I am eager to hear their testimony on the matters before us.
And with that, I yield to my Committee colleague and my host here in
Colorado, Congresswoman Musgrave.
______
Chairman McKeon.
With that, and without objection, I yield to my good
friend, committee colleague, and my host here in Colorado,
Congresswoman Musgrave.
Ms. Musgrave. Thank you, Mr. Chairman. It is wonderful to
have you in Colorado, to show off our beautiful state, and to
be here at the University of Northern Colorado. And I would
also like to thank the witnesses. I appreciate you being here
and the work that you have done, and the information that you
will give us today, I am sure will be very valuable.
Today, the Federal Government is investing tens of billions
of dollars annually in direct aid to students and additional
hundreds of millions of dollars are provided to colleges and
universities.
As a member of the House Education and Workforce Committee,
I am proud to have worked on behalf of legislation that will
improve student loan programs.
I have supported two key pieces of legislation that were
passed by Congress this year alone, the Deficit Reduction Act,
and the College Access and Opportunity Act to reauthorize
higher education programs.
The Deficit Reduction Act that was enacted in February of
2006 reauthorized mandatory spending programs under the Higher
Education Act, and it established key benefits for college
students and it saved American taxpayers billions by making
college access programs operate more efficiently and
effectively.
Despite claims by critics that this bill cut or raided
student aid, nothing could be further from the truth. Student
aid increased under this resolution. Not a single student in
America will receive less financial aid under this resolution.
I also voted for $12.1 billion in new student benefits in
this bill. Students will have more student aid available to
them because of increased loan limits, reduced origination
fees, and also reduced inefficiencies in a program.
Within months of passing these provisions, the House backed
the College Access and Opportunity Act to reauthorize remaining
higher education programs. The College Access and Opportunity
Act will restore the Higher Education Act to its original
mission to provide access to college for low- and middle-income
students. This bill will increase Pell grants, student aid, and
college access. It would reduce red-tape for students and
graduates, and removes barriers for non-traditional students,
and increases transparency in college costs and accreditation.
We are here today to look at how this legislation will
impact students in Colorado and across the Nation. As Congress
acts to improve these programs, it is also important that we
continue to assess the cost to the program.
I am proud that the Budget Deficit Act took steps to
protect American taxpayers and increase the efficiency of these
programs. As I understand, one of the largest costs to the
student aid program is defaulted student loans.
Last year alone, defaulted loans accounted for $25 billion,
or 6 percent of student aid that was left unpaid.
Additionally, the Federal Government must also invest money
to track down funds that students have failed to pay.
Last year, approximately $5.8 billion was recovered through
default college activities.
The Federal Government paid private collection agencies
$252 million to perform these collection services. These are
funds that could be used for current students.
I am also appreciative that our panelists are here to
discuss in-state tuition for illegal immigrants. There is
currently a proposal before Congress to repeal Federal law that
prohibits any state from offering in-state tuition rates to
illegal aliens, unless the state also offers in-state tuition
to all U.S. citizens.
I oppose any proposal that would allow in-state tuition for
illegal aliens, and I encourage the respectfulness of Federal
immigration law. Such policy is unfair to legal aliens and out-
of-state U.S. citizens who pay the full cost of tuition.
Taxpayers should not have to finance education for illegal
aliens. Offering these incentives simply reward people for
breaking the law. I think it is important that we put this
information on the record and I am glad to have the witnesses
here today to share their insight with us, and Mr. Chairman, I
am proud of your record of investment in student aid, and the
good work that you do in chairing the Education and Workforce
Committee, and I am looking forward to hearing from our
witnesses. Thank you, Mr. Chairman.
Chairman McKeon. Thank you very much.
As noted, we have two distinguished panels of witnesses
today and we will begin by welcoming the first panel.
First, we will hear from Professor Kris Kobach, currently
teaching courses in constitutional law, American legal history,
constitutional theory, jurisprudence and legislation.
Prior to joining the law school, Professor Kobach served as
counsel on immigration-related issues to then-Attorney General
John Ashcroft.
Professor Kobach serves as lead counsel in Day v. Sebelius,
the case challenging the state law permitting illegal aliens to
receive in-state tuition in Kansas, and serves as co-counsel to
the similar lawsuit that was filed in California in 2005.
He received his bachelor of arts degree from Harvard
University, his doctorate from Oxford University and his J.D.
from Yale Law School.
Then we will hear from Colorado State Representative Cory
Gardner, who was appointed to the Colorado legislature in June
2005 to fill an open seat. The 63rd District of Colorado is
made up of Adams, Cheyenne, Crowley, Kiowah, Kit Carson,
Lincoln, Morgan, Washington and Yuma Counties.
Prior to joining the state legislature, Representative
Gardner served as U.S. Senator Allard's legislative director
and general counsel, where he had oversight of the senator's
policy and appropriations operation.
Representative Gardner graduated summa cum laude from
Colorado State University and received a J.D. from the
University of Colorado.
And finally on this panel we will hear from Mr. Jared Polis
who was elected to the Colorado Board of Education in 2000 and
currently serves as the vice chairman. Mr. Polis founded two
charter schools and has helped to start several companies,
including a company that developed a chain of movie theaters
that screened first-run films dubbed or subtitled in Spanish in
2001.
In 2001, Mr. Polis created a program that distributes
computers to low-income students through schools and nonprofit
companies. He received a bachelor of arts degree in political
science from Princeton University.
I would like to remind the witnesses that we have a 5-
minute time on your testimony, and Amy has a little buzzer here
that goes off when the 5 minutes are up. I think we will
probably all be able to know when that time has arrived, and
your full testimony will be included in the record.
Professor Kobach.
STATEMENT OF KRIS KOBACH, PROFESSOR OF LAW, UNIVERSITY OF
MISSOURI-KANSAS CITY SCHOOL OF LAW
Mr. Kobach. Mr. Chairman, Congresswoman Musgrave, thanks
for inviting me here. I just want to begin my testimony in
1996, when the story really starts. Several states had
considered providing in-state tuition access to illegal aliens,
and Congress, foreseeing this possibility, passed the
legislation that you are aware of, that says no state can do
this unless they give in-state tuition to all U.S. citizens.
The proponents of this bill in Congress reasoned that no
state would want to do that because out-of-state tuition is a
significant source of revenue. What they did not foresee was
that some states might simply disobey Federal law entirely. And
that is what has happened.
In 1999, Representative Marco Firebaugh, in the California
assembly, proposed a bill that would do exactly that, giving
state tuition to illegal aliens. Governor Gray Davis vetoed
that bill in the year 2000, saying in his veto message that
Federal law prohibits us from doing it.
The same representative reproposed his bill the following
year and faced with a slightly different political environment,
Gray Davis decided not to veto it in 2002. In the meanwhile,
Texas had also passed a similar law. Today, eight more states
have followed Texas and California's example of disobeying
Federal law. Included in those states are some states very
close by here. Kansas, Nebraska, Oklahoma, New Mexico, and
others.
So there are many questions involved here, some are policy
questions, some are legal questions, but let us look at the
scope of the problem.
In small states like Kansas, the number of illegal aliens
attending public universities with taxpayer-subsidized
education is 221 last fiscal year. But in the bigger states,
like Texas, the number is 5935 illegal aliens receiving
subsidized college education, and in California, with its
massive community college system, the number is approximately
30,000 illegal aliens taking advantage of this benefit.
Now the policy reasons why this is a bad idea I think are
obvious. The first and foremost reason is that it discriminates
against U.S. citizens.
U.S. citizens from out of state are not lawful residents
in, say, Kansas. Neither are illegal aliens. Their lawful
residence is in another country. Yet these laws give the
benefit of access to resident tuition to one set of people
whose lawful residence is out of state but not to another, and,
indeed, they discriminate against the U.S. citizens and in
favor of illegal aliens. That is a slap in the face, I believe,
to Americans who have played by the rules and follow our laws,
and it is also a significant financial difference in treatment.
As this committee certainly knows, the cost of a public
education at a state school is now about $67,000 over 4 years.
That is an increase of 41 percent over the last decade, and I
believe that in an era of scarce resources, U.S. citizens
should be first in line to receive taxpayer subsidies,
certainly over aliens, and most certainly over illegal aliens.
The size of the taxpayer burden also varies from state to
state but it can be very significant. For example, in Texas,
approximately 40- to $50 million of taxpayer money are spent
subsidizing the education of illegal aliens at college level.
The third reason, aside from taxpayer burden, and the
unfairness of it, why this is bad policy, is that in all 10
states, the state statutes include a clause that says if you
are legally in the United States, if you possess a valid
student visa, you have to pay out-of-state tuition. Let me
repeat that. Legal aliens pay out-of-state tuition in all 10
states. Only illegal aliens get access to in-state tuition.
That is a horrible and perverse incentive.
It rewards those aliens who violate the law and penalizes
those aliens who actually follow our rules and get the
appropriate student visa to attend college here.
That is why, in July 2004, I became lead counsel in a suit
in Kansas challenging this policy. I am also co-counsel in a
similar suit in California. In neither case has the court ruled
on the merits of the question. In the Kansas case, the District
Court ruled on standing issues and the private right-of-action
issues, and that is now before the 10th Circuit, here, in
Denver. So we have yet to have a court rule on the merits of
these challenges.
But just when it looked like U.S. citizens would be able to
vindicate their rights in court, the Senate steps in with
Senate Bill 2611, which retroactively repeals the 1996 Federal
law, not only repeals it but retroactively repeals it. In other
words, not only giving an amnesty, in many forms, to various
illegal aliens, but giving an amnesty to state legislatures who
have violated Federal law, absolving them of any financial
liability, absolving them of any violation of Federal law.
And so this provision, buried deeply, and more than 600
pages deeply into the Senate act, the DREAM Act provisions, is
pernicious for that reason.
It is also bad law because it creates a separate amnesty
that is very easy to obtain. One need only reside in the United
States for 5 years, of course illegally reside in the United
States, and have come into the United States before the age of
sixteen.
Furthermore, once you get this amnesty, there's no pretense
of a temporary status. You go immediately to a green card, a
provisional green card, and then a final green card. And even
stranger in this provision of the DREAM Act, the DREAM Act
provisions of Senate Bill 2611, is a provision, section 624(f),
that says as soon as you file an application, no matter how
ridiculous the application is, no matter how obvious it is on
the face of the application that you do not qualify, as soon as
you file that application for the amnesty, all Federal law
enforcement is prohibited from enforcing the law against you
and deporting you.
This is an invitation for frivolous applications and it is
an open license to remain inside the United States illegally.
Thank you.
[The prepared statement of Mr. Kobach follows:]
Prepared Statement of Kris W. Kobach, Professor of Law, University of
Missouri--Kansas City School of Law; Senior Counsel, Immigration and
Reform Law Institute
Mr. Chairman and Members of the Committee, it is an honor to appear
before you today to discuss the issue of states offering in-state
tuition rates to illegal aliens in violation of federal law, and the
impact that Senate Bill 2611 would have in this area. I come before you
today in my capacity as a Professor of Constitutional Law and
Immigration Law. I am also a practicing attorney who litigates
regularly in the area of immigration and federal preemption on behalf
of the Immigration and Reform Law Institute. More specifically, I am
the lead counsel representing the plaintiff U.S. citizens in the case
of Day v. Bond, a challenge to Kansas's provision of in-state tuition
rates to illegal aliens; and I am co-counsel for the plaintiffs in the
case of Martinez v. Board of Regents, a similar case in California.
Between 2001 and 2003, I served as Counsel to the U.S. Attorney General
at the Department of Justice. In that capacity, I was the Attorney
General's chief adviser on immigration law. However, my testimony
should not be taken to represent the past or present position of the
U.S. Department of Justice. I offer my testimony solely in my private
capacity.
As you know, buried deeply in S.B. 2611 are the so-called
Development, Relief, and Education for Alien Minors (DREAM) Act
provisions. Just before the Senate Judiciary Committee approved the
first version of the bill on the evening of March 27, 2006, the DREAM
Act was offered as an amendment. It passed on a voice vote and remained
in the restyled ``compromise'' version of the bill that the Senate
passed in May.
The DREAM Act repeals a 1996 federal law that prohibits any state
from offering in-state tuition rates to illegal aliens, unless the
state also offers in-state tuition rates to all U.S. citizens. On top
of that, the DREAM Act offers a separate amnesty to illegal alien
students. In my testimony, I will explain why these provisions are not
only bad policy, they are also profoundly unfair to U.S. citizens and
lawful alien visitors who are being discriminated against by a handful
of states that provide preferential treatment to illegal aliens.
The History of In-State Tuition Rates for Illegal Aliens
To understand just what an insult the DREAM Act is to the concept
of the rule of law, one needs to recall the events of the past ten
years. In September 1996, Congress passed the landmark Illegal
Immigration Reform and Immigrant Responsibility Act (IIRIRA). Open
borders advocates in some states--most notably California--had already
raised the possibility of making in-state tuition rates available to
illegal aliens who attend public universities. To prevent such a
development, IIRIRA's sponsors inserted a provision that prohibited any
state from doing so, unless the state also provided the same discounted
tuition to all U.S. citizens. It was written in plain language that any
layman could understand:
``Notwithstanding any other provision of law, an alien who is not
lawfully present in the United States shall not be eligible on the
basis of residence within a State (or a political subdivision) for any
postsecondary education benefit unless a citizen or national of the
United States is eligible for such a benefit (in no less an amount,
duration, and scope) without regard to whether the citizen or national
is such a resident.'' 8 U.S.C. Sec. 1623
Obviously, no state in the union would be interested in giving up
the extra revenue derived from out-of-state students, Members of
Congress reasoned, so this provision would ensure that illegal aliens
would never be rewarded with a taxpayer-subsidized college education.
What IIRIRA's proponents did not foresee was the willingness of some
states to simply disobey federal law.
However, that is precisely what happened. In 1999, Members of the
California legislature pushed ahead with their plan to have taxpayers
subsidize the college education of illegal aliens. Assemblyman Marco
Firebaugh sponsored a bill that would make illegal aliens who had
resided in California for three years during high school eligible for
in-state tuition at California community colleges and universities. The
bill passed both houses of the California Legislature.
California Governor Gray Davis vetoed the bill in January 2000,
stating clearly in his veto message that it would violate federal law:
``Undocumented aliens are ineligible to receive postsecondary education
benefits based on state residence. * * * IIRIRA would require that all
out-of-state legal residents be eligible for this same benefit. Based
on Fall 1998 enrollment figures * * * this legislation could result in
a revenue loss of over $63.7 million to the state.''
Undeterred, Representative Firebaugh introduced his bill again; and
the California Legislature passed it again. In 2002, Governor Davis
ignored his own veto message of 2000 and signed Firebaugh's bill
offering in-state tuition rates to illegal aliens.
Meanwhile, similar interests in Texas had succeeded in passing
their own version of the same bill. Over the next four years, interest
groups lobbying for illegal aliens introduced the same legislation in
most of the other states. The majority of state legislatures rejected
the idea. They were probably also aware that the Supremacy Clause of
the U.S. Constitution prohibits state governments from violating
federal law.
Unfortunately, eight more states followed the examples of
California and Texas. Today, the ten states that offer in-state tuition
to illegal aliens are: California, Illinois, Kansas, Nebraska, New
Mexico, New York, Oklahoma, Texas, Utah, and Washington.
In relatively small states like Kansas, the number of illegal
aliens receiving this taxpayer-subsidized tuition is in the hundreds.
Last year in Kansas, 221 students who were unlawfully present in the
United States received this benefit. However, in larger states where
the benefit has been available for four years or more, the number is in
the thousands. In Texas, approximately 5,935 illegal aliens were
receiving in-state tuition benefits in 2005. And in California, with
its massive system of universities and community colleges,
approximately 30,000 illegal aliens are now receiving a taxpayer-
subsidized higher education.
Why Providing In-State Tuition to Illegal Aliens Is Bad Policy
In all of the ten states that are violating federal law in this
manner, the in-state tuition laws make for shockingly bad policy. There
are many reasons that this is true, but three are particularly salient.
First, these laws discriminate against U.S. citizens. Neither an
illegal alien nor a nonresident U.S. citizen is normally entitled to
in-state tuition rates at a state's institutions of higher education.
This is understandable, because in-state tuition eligibility is a
valuable public benefit. It is a taxpayer-provided education subsidy
that is worth well over $10,000 a year at most public universities.
States accordingly reserve in-state tuition benefits for their own
residents. However, if a state makes this benefit available to illegal
aliens (whose legal residence is in another country), the state is
discriminating against U.S. citizens (whose legal residence is in
another state).
This is a slap in the face to the law-abiding American citizen from
out of state. For example, consider a student from Missouri who attends
Kansas University. That Missouri resident has always played by the
rules and obeyed the law. Yet Kansas University charges him triple what
it charges an alien whose very presence in the country is a violation
of federal law. This discriminatory treatment is particularly harmful
in a time when the price of a four-year college education is beyond the
reach of many U.S. citizens. The average price of a four-year college
education at a public university is now $67,000--an increase of 41%
over the past decade. In an era of severely limited resources, U.S.
citizens should be first in line to receive those resources; they
should not stand behind aliens who are openly violating federal law.
Second, providing this subsidy for illegal aliens places a heavy
burden on taxpayers. In contrast to out-of-state students who pay the
full cost of their education, students eligible for in-state tuition
receive a significant financial boost at taxpayer expense. When the
number of illegal aliens taking advantage of this subsidy is
significant, the costs become staggering. In Texas, for example,
taxpayers pay an estimated 40 to 50 million dollars every year to
subsidize the college education of illegal aliens. In California, the
cost to taxpayers is much higher than that.
Third, these ten states are now encouraging aliens to violate
federal immigration law. Indeed, under the terms of each of the state
statutes, breaking federal law is a prerequisite that must be satisfied
before the illegal aliens can receive the benefit. Each of the ten
state statutes includes a provision that expressly denies in-state
tuition to aliens lawfully attending college in the United States on an
appropriate student visa (typically, an F, J, or M visa). An alien is
eligible for in-state tuition only if he is breaking federal law by
remaining in the United States.
Aliens are sent this message: ``We encourage you to violate the
law. If you actually obtain a valid visa to study here, we will
penalize you by making you pay out-of-state tuition.'' This creates a
perverse incentive structure in which the states directly reward
illegal behavior and significantly undermine federal law.
Imagine if a state enacted a law that rewarded state residents for
cheating on their federal income taxes--by giving state tax credits to
those who break federal tax laws. That is the equivalent of what these
ten states have done. It is a direct financial subsidy to those who
violate federal law.
Lawsuits to Protect the Rights of U.S. Citizens
In July 2004, a group of U.S. citizen students from out-of-state
filed suit in federal district court in Kansas to enjoin the state from
providing in-state tuition rates to illegal aliens, on the grounds that
Kansas is clearly violating federal law. Not only that, Kansas is
violating the Equal Protection Clause of the U.S. Constitution by
discriminating against them and in favor of illegal aliens. I am the
attorney representing those U.S. citizens.
The district judge did not render any decision on the central
questions of the Kansas case. Instead, he avoided the merits of the
issue entirely by ruling that the U.S. citizen plaintiffs lacked a
private right of action to bring their statutory challenge and lacked
standing to bring their Equal Protection challenge. His holding is
currently being appealed in the U.S. Court of Appeals for the Tenth
Circuit.
Meanwhile, in December 2005, another group of U.S. citizen students
filed a class-action suit in California state court. They too maintain
that the state is violating federal law and the U.S. Constitution.
Pursuant to a California civil rights statute, they are also seeking
damages to compensate them for the extra tuition they have paid, over
and above that charged to illegal aliens.
These U.S. citizens are simply suing to enforce their statutory
right not to be treated less favorably than illegal aliens when it
comes to tuition rates. Congress gave them this statutory right ten
years ago. In neither case, has a judge ruled on the merits of the
issue. However, just when it looks like U.S. citizens might vindicate
their rights under federal law and hold the wayward states accountable,
S.B. 2611 offers the offending states a pardon. As I will explain, the
DREAM Act would not only take away the U.S. citizens' right to equal
treatment, it would effectively close the courthouse door and deny them
the ability to vindicate their rights in court.
Senate Bill 2611
The DREAM Act provisions, buried more than 600 pages into the
Senate bill, grant an unusual reprieve to the offending states. The
DREAM Act repeals the 1996 federal law that the ten states violated. In
addition, Section 623 of the Senate bill states, ``The repeal * * *
shall take effect as if included in the enactment of the Illegal
Immigration Reform and Immigrant Responsibility Act of 1996.'' In other
words, it is a retroactive repeal--as if the 1996 law never happened.
In this way, the Senate bill expressly shields those states from
liability for their past violations of federal law.
This is no accidental turn of phrase. This retroactive repeal was
inserted as a direct response to the lawsuits challenging the states
that violated the 1996 federal law. In the California case, the legal
challenge is a class action lawsuit on behalf of all U.S. citizens
whose federal statutory rights have been violated. Those U.S. citizens
are suing to recover the extra tuition that they paid, over and above
the tuition charged to illegal aliens. The DREAM Act provisions of the
Senate Bill are specifically designed to take away this federal
statutory right from U.S. citizens.
On top of this insult to the rule of law, the DREAM Act creates a
massive independent amnesty in addition to the even larger amnesty that
S.B. 2611 would confer. The amnesty presents a wide open path to
citizenship for any alien who entered the country before the age of 16
and who has been in the country for at least five years. As with the
rest of the Senate bill, the guiding notion is: the longer you have
violated federal law, the better.
Beyond that, all the alien needs is a high school diploma or a GED
earned in the United States. Alternatively, he need only persuade an
institution of higher education in the United States--any community
college, technical school, or college--to admit him.
The DREAM Act abandons any pretense of ``temporary status'' for the
illegal aliens who apply. Instead, all amnesty recipients are awarded
lawful permanent resident (green card) status. The only caveat is that
alien's status is considered ``conditional'' for the first six years.
In order to move on to the normal green card, the alien need only
obtain any degree from an institution of higher education, complete two
years toward a bachelor's degree, or show that doing so would present a
hardship to himself or his family members. And of course, the alien may
thereafter use his lawful permanent resident status to bring in family
members and may seek citizenship.
Furthermore, the DREAM Act makes it absurdly easy for just about
any illegal--even one who does not qualify for the amnesty--to evade
the law. According to Section 624(f), once you file an application--any
application, no matter how ridiculous--the federal government is
prohibited from deporting him Moreover, with few exceptions, federal
officers are prohibited from either using information from the
application to deport the alien or sharing that information with
another federal agency, under the threat of a fine of up to $10,000.
Thus, an alien's admission that he has violated federal immigration
law cannot be used against him--even if he never had any chance of
qualifying for the DREAM Act amnesty in the first place. The DREAM Act
also makes illegal aliens eligible for various federal student loans
and work-study programs.
The DREAM Act is a remarkably bad piece of legislation on many
levels. But the most fundamental issue that it raises is the relation
of the states to the federal government. Ten states have created a
twenty-first century version of the nullification movement--defying
federal law simply because they don't like what the majority in
Congress decided. In so doing, they have challenged the basic structure
of our Republic. The DREAM Act would pardon this offense and, in so
doing, would encourage states to defy federal law in the future.
One thing that we have learned in the struggle to enforce our
nation's immigration laws is that states cannot be allowed to undermine
the efforts of the federal government to enforce the law. The rule of
law can be restored only if all levels of government are working in
concert to uphold it.
______
Chairman McKeon. Thank you.
Representative Gardner.
STATEMENT OF HON. CORY GARDNER, COLORADO STATE REPRESENTATIVE
Mr. Gardner. Thank you, Mr. Chairman, Congresswoman
Musgrave. Mr. Chairman, welcome to Colorado, the epicenter of
the recent state immigration debate. Congresswoman Musgrave, I
applaud you for your efforts to bring real solutions to a very
complex problem.
Today's hearing focuses on an important question: Should
taxpayer dollars be used to provide state benefits for illegal
immigrants, including in-state tuition?
It is estimated that over 250,000 illegal aliens reside in
Colorado. Between 1990 and 2000, the number of illegal aliens
in the state increased by more than 100,000. Colorado now has
the sixth highest percentage of illegal immigrants in the
Nation.
Estimates on the cost of illegal immigrants in Colorado
hover around $1 billion per year. According to an analysis by
the Joint Budget Committee, in 2003 and 2004, the Health Care
Policy and Financing Agency paid on 8,542 delivery claims for
non-citizens at a total cost of over $30 million.
Over 40 percent of all births paid by Medicaid in Colorado
were for non-citizens, both legal and undocumented immigrants.
Earlier this year, I held a town meeting and was joined by
several Hispanic high school students. They are students in a
district that has, over time, over the past 10 to 15 years,
been transformed by immigration in the state, growing from a
very small percentage of minority students to a minority
population approaching 50 percent.
Because of Federal and state law, it is impossible to
determine how many students in that district are legal versus
illegal.
The students were bright, articulate, and eager to learn,
and the one question they wanted to know more than anything was
whether or not I supported in-state tuition for illegal
immigrants, and my answer to them was no. And we cannot afford
any other policy. We must stem the tide of illegal immigrants
coming into this state.
We cannot give benefits to those who are here illegally,
above and beyond the services and benefits that we are willing
to offer to the lawful citizens of the United States.
Not only does this grant preferential treatment to those in
the country illegally. It also disrespects those who enter or
who are attempting to enter the United States through legal
processes.
We cannot reward illegal activity, even if it is the result
of decades of lax immigration enforcement. To do so is to
create a system where the only expectation of the law is an
expectation of little or no law enforcement.
Proponents of in-state tuition for illegal aliens believe
that to deny in-state tuition lacks compassion. To the
contrary, there is no compassion in turning a blind eye on
illegal immigration, allowing people to enter this country
illegally, and watching them earn poor wages, and then give
them an incentive such as in-state tuition, just so we can
entice them to stay.
Compassion is creating an immigration system that does not
perpetuate poor conditions or education amnesty. It is a legal
system that is efficient and secure. An efficient and secure
legal system starts first with a secure border.
It is difficult to determine how many undocumented students
would take advantage of an in-state tuition policy, and
therefore to estimate the cost of providing such a benefit. The
Urban Institute estimates that there are 25,000 undocumented
children in the K through 12 age group in Colorado.
If in-state tuition were granted to illegal aliens, all
students in the formula would presumably be eligible to receive
the benefit as they progressed through the educational system.
Taking our $3,000 college opportunity fund voucher, the stipend
alone, over the next 12 years, that's roughly $75 million at
today's rates.
In 2003, 2004, and 2005, legislation was introduced in the
general assembly to change Colorado law, effectively granting
in-state tuition to illegal immigrants and attempting to change
the residency requirements to conform to the stipulations of
Federal law. The legislation failed all 3 years.
In January of 2006, the Colorado attorney general issued a
formal opinion addressing the Colorado statute on in-state
tuition benefits and undocumented aliens. In that opinion, the
attorney general confirmed that because current law bases in-
state tuition benefits on the documentation of a student's
residency classification, undocumented aliens may not receive
in-state tuition at Colorado institutions of higher education.
In July of 2006, Governor Bill Owens issued a call for a
special session of the legislature to deal with several
immigration matters, including the provision of state benefits
and services to illegal immigrants. As a result, house bill
1023 passed the legislation and was signed into law. House bill
1023 requires each agency or subdivision of the state to verify
the lawful presence in the United States of each natural
person, 18 years of age or older, who applies for a state or
local public benefit, or for a Federal public benefit.
The act makes it unlawful for any agency or political
subdivision to provide a Federal or a state or local public
benefit in violation of the statute.
However, house bill 1023 contains language that some argue
actually opens up a loophole and pays the way for state
taxpayer-funded benefits to illegal immigrants.
First, the law creates a new class of benefits for illegal
immigrants under 18 by exempting them from the verification
requirements.
Second, house bill 1023 contains language that may be
interpreted under Federal law as language that affirmatively
provides for eligibility of state benefits, thus allowing state
benefits to be conferred on those in the state illegally.
So what does this mean in terms of in-state tuition in
Colorado? It is a question that may have to ultimately be
decided by the courts.
An analysis by a lawyer within the attorney general's
office concluded that although house bill 1023 may not directly
apply to the college opportunity fund, that's our stipend
program, this is a moot point since participation of
undocumented aliens in that program is prohibited by Federal
law.
Taken together, though, if the residency requirement is
changed in Colorado law, or in Federal statute, house bill 1023
may be just enough for a court to interpret it as granting in-
state tuition for an illegal immigrant under the age of
eighteen.
As a matter of state policy, I believe it sends a misguided
message to citizens and non-citizens alike, that we will allow
a taxpayer-funded benefit, such as in-state tuition, to go to
someone who is in violation of immigration laws.
As a Nation, we should not promote policies that encourage
illegal immigration and provide disincentives to those
patiently working through the proper legal channels.
The cost of education is increasing every day. It is
difficult enough for us to provide for the educational needs of
our own citizens, let alone those who are in the country
illegally.
We must not reward illegal behavior, nor should we
institute policies that perpetuate it.
Thank you, Mr. Chairman, and I'll be happy to answer any
questions the committee may have.
[The prepared statement of Mr. Gardner follows:]
Prepared Statement of Hon. Cory Gardner, Colorado State Representative
Thank you, Mr. Chairman and members of the Committee. Welcome to
Colorado, the recent epicenter of the state immigration debate.
Congresswoman Musgrave, I applaud you for your efforts to bring real
solutions to a complex problem. This is a tough, complicated issue.
Your leadership is to be commended.
On the heels of an immigration special session, you convene at a
time that finds the state searching for answers to a most important
question: should taxpayer dollars be used to provide state benefits for
illegal aliens, including in-state tuition?
To fully understand the significance of today's hearing and what it
means to this state, it is important to have at least a snapshot of
Colorado demographics and economics. Over 4.5 million people live in
the state, working in tourism, agriculture, technology and other
sectors. It is estimated that somewhere between 250,000 to 300,000
illegal aliens reside in Colorado. Between 1990 and 2000, the number of
illegal aliens in Colorado increased by more than 100,000. Colorado now
has the 6th highest percentage of illegal aliens in the nation.
In a study commissioned by Defend Colorado Now and written by
Donald Rice, the cost of illegal aliens in Colorado is estimated at
more than $1 billion per year. The organization also reported that
Medicaid paid approximately $64 million for services rendered to
illegal aliens in Colorado. According to an analysis by the Joint
Budget Committee staff, in FY 2003-04, Health Care Policy and Financing
paid 8,542 delivery claims for non-citizens at a total cost of over $30
million. Over 40 percent of all births paid by Medicaid were for non-
citizens--both legal and undocumented immigrants.
The budget for the state of Colorado is roughly $15 billion. Of
this total, over $2 billion is spent on higher education. Roughly
200,000 in-state students attend state institutions, along with nearly
35,000 out of state students. According to the Colorado Commission on
Higher Education Student Unit Records Data System, which contains
student data provided by the institutions, of the 235,592 students
enrolled last year, 98.6% provided valid social security numbers. The
other 1.4% includes students who have permanent resident card numbers
or Visas, or may be undocumented aliens. Because federal and state laws
do not expressly prohibit the admission of undocumented aliens to
colleges and universities, there is the possibility that undocumented
aliens are already accessing postsecondary services in the State of
Colorado, regardless of the availability of in-state tuition.
Earlier this year, I held a town meeting in my home town of Yuma,
Colorado. Participating in the town meeting was a group of Hispanic
high school students. They are students in a district that has, over
the past 10 to 15 years, been transformed by immigration, growing from
a very small percentage of minority students to a minority population
approaching 50 percent. Because of federal and state law, it is
impossible to determine how many students in the district are legal
versus illegal.
The students were bright, articulate, and eager to learn. And the
one question they wanted to know more than anything--did I support in-
state tuition for illegal aliens. And my answer--no. To some, this
answer seems harsh. But it is a policy to which we must adhere. We must
stem the tide of illegal immigrants coming into this state. We cannot,
as a state or a nation, give benefits to those who are here illegally,
above and beyond the services and benefits that we are willing to offer
to every person lawfully present in the United States. Not only does
this grant preferential treatment to those in the country illegally, it
also disrespects those who enter, or who are attempting to enter, the
United States through legal processes. We cannot reward illegal
activity even if it is the result of decades of lax immigration
enforcement. To do so is to create a system where the only expectation
of the law is an expectation of little to no law enforcement.
House District 63 is bordered by Kansas and Nebraska. Citizens from
my district are strongly opposed to in-state tuition for illegal
aliens, often commenting, ``I can't take my child to Nebraska and
receive in-state tuition, why should we grant in-state tuition for
people who are in this country illegally?''
Take for instance some of the students attending school in Wray,
Colorado. The district has students who live just across the state line
in Nebraska but attend school in Colorado because it is closer.
Although the Nebraska student may be a legal U.S. citizen who
eventually graduates from a Colorado high school, an in-state tuition
policy for undocumented immigrants could have the effect of barring
access to in-state tuition for the legal citizen from Nebraska while
the undocumented classmate could attend college in Colorado at in-state
tuition rates.
Proponents of in-state tuition for illegal aliens believe that to
deny in-state tuition lacks compassion. There is no compassion in
turning a blind eye on illegal immigration, allowing workers to enter
this country illegally, watch them earn poor wages, and then give an
``incentive'' such as in-state tuition for them to stay here.
Compassion is creating a legal immigration system that does not
perpetuate poor conditions or education amnesty. It is a legal system
that is efficient and secure. An efficient and secure legal system
starts with a secure border.
It is difficult to determine how many undocumented students would
take advantage of an in-state tuition policy and thus to estimate the
cost of providing such a benefit. According to Jenna Langer, Executive
Director of the Colorado Commission on Higher Education, the cost of
post-secondary educational services accessed by undocumented aliens
would be covered in most instances by the student's payment of the out-
of-state tuition rate, unsubsidized by state tuition benefits, stipends
or financial aid. Langer noted that it is possible that undocumented
students may be obtaining the postsecondary benefits of in-state
tuition, stipends or financial aid through false documentation or
fraud. However, current documentation policies would keep most
undocumented aliens from receiving state postsecondary educational
benefits and there is no way to estimate the cost if fraud does occur.
Because school districts do not inquire about a student's
immigration status, estimating the number of undocumented students is
difficult. However, two organizations, the Urban Institute and the
Federation for American Immigration Reform have developed formulas to
determine the number of undocumented immigrant children in Kindergarten
through 12th grade (K-12) and the cost of such education. If in-state
tuition were granted to illegal aliens, all students in the formula
would presumably be eligible to receive the benefit.
The Urban Institute, using data from the 2000 Census, has provided
an estimate of 25,000 as the number of undocumented immigrant children
in Colorado in K-12. The Institute's estimate was derived using the
number of undocumented immigrants in Colorado in the K--12 age group,
which is estimated at 22,000. The Institute then added 10 percent, the
estimated undercount of undocumented children in the census, settling
on a total of 24,000. Finally, recognizing a margin of error of plus or
minus 20 percent, the Institute set the lower boundary of the estimate
at 20,000 and the upper boundary at 28,000. Averaging these two
numbers, they arrived at a final estimate of 25,000 undocumented
children in the K--12 age group in Colorado.
Although the Federation for American Immigration Reform does not
provide an estimate of the number, it does provide an estimate of the
cost of educating school-aged undocumented immigrants in its
publication, ``Breaking the Piggy Bank: How Illegal Immigration is
Sending Schools Into the Red'' (Attachment A). The Federation estimates
that the cost of educating undocumented children and the U.S.-born
children of undocumented immigrants in Colorado in 2004 was $564.1
million. The methodology used in reaching this estimate is described in
the publication as follows: ``[t]he 1.5 million school-aged illegal
immigrants residing in the United States and their 2 million U.S.-born
siblings can be divided among the states using government estimates of
the illegal alien population. Using each state's per-pupil expenditure
reported by the U.S. Department of Education, cost estimates for
educating illegal immigrants in each state are shown * * *''
In 2003, 2004, and 2005, legislation was introduced in the General
Assembly to change Colorado law, effectively granting in-state tuition
to illegal aliens and changing the residency requirements to conform to
the stipulations of federal law. The legislation failed all three
years.
In January of 2006, the Colorado Attorney General issued a formal
opinion addressing the Colorado statute on in-state tuition benefits
and undocumented aliens. In that opinion, the Attorney General
confirmed that because current law bases in-state tuition benefits on
the determination of a student's residency classification, undocumented
aliens may not receive in-state tuition at Colorado institutions of
higher education.
In July of 2006, Governor Bill Owens issued the call for a special
session of the legislature to deal with several immigration matters,
including the provision of state benefits and services to illegal
aliens. As a result, House Bill 06S-1023 passed the legislature and was
signed into law.
House Bill 1023 requires each agency or political subdivision of
the State to verify the lawful presence in the United States of each
natural person eighteen years of age or older who applies for a state
or local public benefit or for a federal public benefit. The Act makes
it unlawful for any agency or political subdivision to provide a
federal or a state or local public benefit in violation of the statute.
However, House Bill 1023 contains language that some argue actually
opens up a loophole and paves the way for state taxpayer funded
benefits to illegal aliens. First, the law creates a new class of
benefits for illegal aliens under 18 by exempting them from the
verification requirements. Secondly, HB-1023 contains language that may
be interpreted under federal law as language that ``affirmatively
provides'' for eligibility of state benefits, thus allowing state
benefits to be conferred on those in the state illegally.
What does this mean in terms of in-state tuition? It is a question
that may ultimately be decided by the courts. An analysis by a lawyer
within the Attorney General's office concluded, ``Although [HB-1023]
may not apply directly to the College Opportunity Fund Program, this is
a moot point since participation of undocumented aliens in that program
is prohibited by 8 U.S.C. Sec. 1623.'' The College Opportunity Fund is
the college voucher program for in-state students. Taken together, if
the residency requirement is changed in Colorado law or in federal
statute, HB-1023 may be just enough for a court to interpret it as
granting in-state tuition for an illegal alien under the age of 18.
As a matter of state policy, I believe it sends a misguided message
to citizens and non-citizens alike that we will allow a taxpayer funded
benefit, such as instate tuition, to go to someone who is in violation
of our immigration laws. As a nation, we should not promote policies
that encourage illegal immigration and provide disincentives to those
patiently working through the proper legal channels. The cost of
education is increasing every day. It is difficult enough to provide
for the educational needs of our own citizens, let alone those who may
be in the country illegally. We must not reward illegal behavior. Nor
should we institute policies that perpetuate it.
Thank you, Mr. Chairman. At this time I would be happy to answer
any questions that the committee may have.
______
Chairman McKeon. Thank you.
Mr. Polis.
STATEMENT OF JARED POLIS, VICE CHAIRMAN, COLORADO BOARD OF
EDUCATION
Mr. Polis. Thank you, Mr. Chairman, and welcome to
Colorado.
Chairman McKeon. Thank you.
Mr. Polis. And Representative Musgrave. My name is Jared
Polis and I am the vice chairman of the Colorado State Board of
Education, and I want to begin by thanking you for the
opportunity to share my thoughts with you this morning.
As you well know, there are significant good faith
disagreements among Coloradans, like many Americans, on the
issue of immigration. But there is one element of the
immigration discussion where there seems to be substantial
agreement and common ground, among Americans of all stripes,
Republican, Independent and Democrat, progressive, moderate and
conservative. And that relates to children.
As the Supreme Court very eloquently noted in its 1982
opinion, the rights and opportunities of children are a
separate issue from the issue of their parents' immigration
status.
We should not, the Court said, quote, impose a lifetime of
hardship on a discrete class of children.
Within that context, I am here today to strongly urge the
U.S. Congress to pass the DREAM Act, a bipartisan bill that
would give a fair chance to undocumented students who were
brought to this country as children, through no fault of their
own, as early as age five or ten.
Instead of punishing these students, the act would allow
them to complete their education, provide them a path to
citizenship, and improve our state and our country's
competitiveness.
This bill is not about immigration. It is about whether
young people who have grown up here can complete their
education or not.
In Colorado, and nationally, we hear about the importance
of preventing dropouts, closing the achievement gaps, and
improving student achievement.
My message to you in Congress is it is time to put action
to these words. Pass this legislation, so our state and Nation
can begin to meet these goals. Our state board and our school
districts are accountable under No Child Left Behind. The DREAM
Act would be a vital tool toward closing the achievement gap,
particularly among Latino students in Colorado and nationally.
The DREAM Act would do two things. First, and most
importantly, it would provide a path to legal status for
individuals who were brought to this Nation years ago, as
children. To qualify, an undocumented person would have to show
that he or she entered the U.S. at the age of 15 or less, at
least 5 years before the bill was enacted, has good moral
character and has graduated high school in the United States.
Those who qualify would be granted a conditional status
that would permit them to remain here legally for 6 years,
during which they would have to either graduate from community
college, complete 2 years toward a college degree or serve at
least 2 years in the United States military.
Second, it would eliminate a provision of Federal law that
most of the earlier comments referred to, that places
conditions on whether states use their own funds to provide in-
state tuition to undocumented students.
If this provision is repealed, states will be permitted to
decide for themselves, without Federal interference, whether
it's beneficial for the state to permit such students to study
in their colleges and universities at the in-state rate.
The DREAM Act would not require Colorado or any other state
to provide in-state tuition to undocumented immigrants. The
choice would be up to each state.
In Representative Gardner's remarks, he echoed his own
position on this matter. I am urging you, in Congress, to leave
these matters to the states and the state assemblies of the
states.
The Federal Government has failed miserably in securing our
borders. The least it can do is allow states the flexibility in
dealing with the impact of our failed border policy.
By providing a path to legal status, the DREAM Act would
help transform the lives of an estimated 65,000 students who
successfully graduate from high school each year, but who are
ineligible to work legally, join the military, or in 40 states,
pay in-state college tuition at public colleges and
universities.
These students live on the margins of society and face
limited futures because of their status, which is no fault of
their own.
Although they consider the U.S. their home and want to
contribute to its future by serving in the military or giving
back to their community as teachers, doctors, or engineers,
undocumented students currently have no way to legalize their
immigration status and get on with their lives.
Critically, to many of these students, the United States is
their only home and English is their only fluent language.
Mr. Chairman, these students are to be admired. They have
met the challenges of transitioning to a new country, a new
culture and a new language, and they have avoided the
temptations that have derailed some of their peers and they
have persevered to graduate from high school.
It is impressive, what many of them have accomplished,
despite the barriers they have faced. Many are high achievers,
including valedictorians, honor students, academic and athletic
prize winners, team captains and class leaders.
Colorado and the country's economic future will depend on
our ability to educate all of our young people and send them
into the workforce, which the DREAM Act would help us do.
One of the items that I will be submitting into the record
does talk about the contributions from state and local taxes in
Colorado, paid in Colorado by undocumented immigrants, and we
can refer the Chairman of the committee to similar studies that
have been done at the Federal level about the tax impact of
undocumented residents and the taxes that they do pay.
In the absence of Federal action, many states have taken it
upon themselves to keep immigrant youth in school. Texas,
California, Utah, Washington, New York, Oklahoma, Illinois,
Kansas, New Mexico and Nebraska are the 10 states that have
enacted laws permitting undocumented students who have attended
high school to pay the discounted rate.
Mr. Chairman, I understand how hard it is to enact the
needed comprehensive reforms on immigration policy. It is a
complicated issue and reasonable minds can disagree about many
of the issues and equities involved. The same cannot be said
about the DREAM Act.
It represents a simple acknowledgement that the failure of
our Federal immigration policy and the mistakes of adults not
ought be visited on children who have done nothing wrong, who
have, in fact, done exactly what we as a society have asked--go
to school, stay out of trouble, succeed.
Congress should act to ensure that these students have an
opportunity to legally pursue the American dream. It is the
right thing to do and it is the American thing to do for our
country and for these children's future. Thank you.
[The prepared statement of Mr. Polis follows:]
Prepared Statement of Jared Polis, Vice Chairman and Member at Large,
Colorado State Board of Education
Members of the committee, my name is Jared Polis and I'm the Vice
Chairman of the Colorado State Board of Education. I want to begin by
thanking you for the opportunity to share my thoughts with you this
morning. As we all know, there is significant good faith disagreement
among Coloradans, like many Americans, on the issue of immigration. But
there is one element of the immigration discussion where there seems to
be substantial agreement among Americans--Republican or Democrat,
progressive or conservative--and that relates to children.
As the Supreme Court eloquently noted in its 1982 opinion, the
rights and opportunities of children are separate from the issue of
their parents' immigration status. We should not, the Court said,
impose ``a lifetime of hardship on a discrete class of children''.
Within that context, I'm here today to strongly urge the United States
Congress to pass the DREAM Act, a bipartisan bill that would give a
fair chance to undocumented students, who were brought to this country
as children through no fault of their own, as early as age 5 or 10.
Instead of punishing these students, the act would help them complete
their education, provide them with a path to citizenship, and improve
our state's competitiveness. This bill is not about immigration--it is
about whether young people who have grown up here can complete their
education * * * or not.
In Colorado and nationally, we hear about the importance of
preventing dropouts, closing the achievement gaps, and improving
student academic performance. Now, my message to you in Congress is:
it's time to put action to these words--pass this legislation so our
state and nation can begin to meet these goals.
The DREAM Act would do two things:
First, and most important, it would provide a path to legal status
for individuals who were brought to this nation years ago as children.
To qualify, an undocumented person would have to show that he or she:
entered the U.S. at the age of 15 or less at least 5 years
before the bill is enacted;
has ``good moral character'' (a term of art in immigration
law); and
has graduated high school in the U.S.
Those who qualify would be granted a ``conditional'' status, that
would permit them to remain legally in the U.S. for 6 years, during
which they would be required to graduate from a community college,
complete at least two years towards a college degree, or serve at least
two years in the U.S. military.
Second, it would eliminate a provision of federal law that places
conditions whether states us use their own funds to provide in-state
tuition to undocumented students. If this provision is repealed, states
would be permitted to decide for themselves without federal
interference whether it is beneficial to the state to permit such
students to study in their colleges and universities at the instate
rate.
The DREAM Act would not require Colorado or any other state to
provide instate tuition to undocumented immigrants. The choice would be
up to each state.
By providing a path to legal status, the DREAM Act would help
transform the lives of an estimated 65,000 students who successfully
graduate from high school each year but who are ineligible to work
legally, join the military, or, in 40 states, to pay in-state college
tuition rates at public colleges and universities, or apply for
financial aid. These students live on the margins of society and face
limited futures because of their undocumented status. Although they
consider the U.S. their home and want to contribute to its future by
serving in the military or giving back to their community as teachers,
doctors or engineers, undocumented students currently have no way to
legalize their immigration status and get on with their lives. To many
of them, the United States is their only home and English their only
fluent language.
Mr. Chairman, these students are to be admired. They have met the
challenges of transitioning to a new country, a new culture, and a new
language. They have avoided the temptations that derailed some of their
peers and they have persevered to graduate from high school.
It is impressive what many of them have accomplished despite the
barriers they have faced. Many are high achievers, including
valedictorians, honors students, academic and athletic prize winners,
team captains, and class leaders; in 2004, there were 17 undocumented
immigrant high school valedictorians in California alone.
Colorado's economic future will depend on our ability to educate
all of our young people and send them into the workforce, which the
DREAM Act would help us to do.
In the absence of federal action, many states have taken it upon
themselves to keep their immigrant youth in school. Ten states have
enacted laws permitting undocumented students who have attended high
school and graduated from high school in their state to pay the
discounted in-state tuition rate at state colleges and universities.
The states are Texas, California, Utah, Washington, New York, Oklahoma,
Illinois, Kansas, New Mexico, and Nebraska.
Colorado is one of the states that have considered similar
legislation but thus far it has not passed here. The bipartisan
Colorado Commission on High School Improvement, which I was privileged
to co-chair, recommended that Colorado residents be eligible for in-
state tuition regardless of their immigration status. This year the in-
state tuition for a full-time undergraduate student at CU-Boulder is
$4,446 while the out-of-state tuition is $21,900; at UNC, the in-state
tuition is $3,950, while the out-of-state is $12,530; the in-state
tuition at Arapahoe Community College is $1,746 while the out-of-state
is $8,284. The vast majority of undocumented students come from low-
income families that are unable to help them pay these tuition rates.
If we want them to complete their education and contribute to our state
up to their full abilities, then it is imperative that they not be
charged above their means.
Mr. Chairman, I understand how hard it is to enact the needed
comprehensive reforms of our immigration policy. It is complicated and
reasonable minds can disagree about many of the issues and equities
involved.
The same cannot be said about the DREAM Act. It is represents a
simple acknowledgement that our immigration failures and the mistakes
of adults ought not to be visited on children who have done nothing
wrong, who have, in fact, done what exactly what we, as a society have
asked: go to school, stay out of trouble, succeed.
Congress should act to ensure that these students have an
opportunity to legally pursue the American Dream. It is the right thing
to do--for our country and for these children's future.
I ask that the following reports be entered into the permanent
record, along with my testimony.
Closing the Education Gap: Benefits and Costs (Vernez, Krop, and
Rydell, 1999), Rand Corporation
The Achievement Gap: Colorado's Biggest (Education) Problem, Donnell-
Kay Foundation, Colorado Children's Campaign, Center for
Education Policy Analysis, and the Piton Foundation.
High School Reform in Colorado: Meeting the Expectations of a New Era.
The Colorado Commission on High School Reform. December 2005.
Closing the Achievement Gap: Focus on Latino Students. Color in
Colorado, AFT Policy Brief #17. March 2004.
Day, Jennifer Cheeseman. Eric C. Newburger. The Big Pay Off:
Educational Attainment & Synthetic Estimates of Work Life
Earnings. U.S. Census Bureau. July 2002.
Thank you.
______
Chairman McKeon. Thank you.
In a congressional hearing, we will not have applause or
reactions from the audience. We will just have to ask you to
leave. So if you will please honor that. That is what we do in
Washington. That is what we will do here.
Thank you very much.
Professor Kobach, let me ask you a question. If this
retroactive amnesty were granted, would that complicate the
issue of--what would you do about students that maybe receive
these funds, are paid, a student paid out-of-state tuition, and
then retroactively was granted in-state tuition? Would they be
able to go back and ask for a rebate for any tuition they have
paid?
Mr. Kobach. Are you referring to an illegal alien student--
--
Chairman McKeon. Yes.
Mr. Kobach [continuing]. Or a U.S. citizen student? Well,
it would depend on what a state chose to do. If the DREAM Act
were passed as part of the Senate bill, then the states would
have the option of a grant, so Colorado would then no longer
have the Federal statutory barrier, that is in addition to all
the policy reasons why, and tax reasons why Colorado might want
to do. Colorado could then move ahead without a Federal
statutory barrier.
If someone were midway through their college career,
presumably the bill would allow, if it is like most states, it
would allow someone in their, say they are between their
sophomore and junior year, to go ahead and acquire in-state
tuition access or pay a lower tuition rate earlier.
Now if a state wanted to retroactively give, you know,
allow that student to go back and claim the extra tuition that
he or she paid in his freshman or sophomore year, which is I
think what you are asking, that would be possible under state
law, under the U.S. Constitution or under most state
constitutions.
A retroactive benefit is not an ex post facto violation, so
if a state wished to give sort of a retroactive state credit,
it could. That would of course impose an even bigger burden on
state taxpayers, but there is no barrier to a state doing that
under the terms of the DREAM Act, as it opened up that option
to them.
May I respond to a point that was raised earlier by Mr.
Polis?
Chairman McKeon. Yes.
Mr. Kobach. Talking about the constitutionality of this, he
suggested that we leave it to the states, and that it would be
best if we left the states the discretion to decide whether to
give this incentive, this reward for illegal immigration.
Under our Federal Constitution, immigration is not like a
commerce power. It's not like other powers which are shared at
different levels with the states. Immigration is a Federal
plenary power and the U.S. Supreme Court has recognized this
for many, many decades.
As a result, the states cannot take the lead. The states
can only act in the immigration arena in so far as Congress
allows them an opening to act.
So even if section 1623, the part of Federal law we are
talking about here, were repealed, and states were free to
grant in-state tuition to illegal aliens, there would be many
other provisions saying states can't give public benefits to
illegal aliens, which is found in 8 USC section 1621, states
cannot enact so-called sanctuary city policies, which is found
in 8 USC section 1644, notwithstanding the fact that some
states have apparently ignored that.
There are many provisions in Federal law that tell states
what they can and cannot do, and that is proper, because if our
immigration are to be solved, you have to have the states and
the Federal Government operating in concert.
If the Federal Government is trying to discourage illegal
immigration, and the states are offering incentives, rewards
for illegal immigration, such as the incentive that says don't
go home and get a visa if you want to study here in Colorado.
Stay here and we will give you a lower rate of tuition if you
don't legalize your status.
If the states are operating in the opposite direction, we
will never solve our immigration problem.
Chairman McKeon. Thank you.
Representative Gardner, how is the state enforcing the new
law that you just passed?
Mr. Gardner. Thank you, Mr. Chairman. That is sort of a
work in progress as we speak. There is a lot of confusion that
is trying to be worked out in terms of who is and who is not
required to verify. A lot of the verification requirements
depend on the issuance to that agency or organization of state
taxpayer dollars, and so the attorney general's office has
issued some opinions in terms of who is and who is not supposed
to be verifying.
The agencies with the dollars that are issuing the
programs, that are overseeing the issuance of benefits to the
taxpayers, or to the people coming into their office, are the
ones that are verifying whether or not they meet the
requirements of House bill 1023.
But again, there is still a little bit of confusion and
problems in the system that are being worked through as we
speak.
Chairman McKeon. Thank you. My time is just about up but
let me just say that over the last two decades, the cost of
higher education has been going up at four times the rate of
inflation, and the Federal Government has increasingly been
putting more and more money into education. The state
governments have been cutting their contribution to higher
education.
If they use more of their resources to pay for illegal
aliens, then the Federal Government would have to even pick up
more of this burden, or the students and their parents would
have to pick up more, and I have a huge concern, because 48
percent of low and middle-income students are not able to go to
university right now because of cost, and if that were
increased, more and more would be forced out of the opportunity
to get a college education.
My time has ended.
Ms. Musgrave.
Ms. Musgrave. Thank you, Mr. Chairman.
Kris, I would like you to comment on section 624(f) in
regard to--could you elaborate on that a little bit, as to how
it ties the hands of Federal law enforcement.
Mr. Kobach. Yes. There are some provisions of the DREAM Act
that are particularly problematic, and section 624(f) is the
one that says, if you just file the application, then you are
prohibited from being deported.
And not only that. That same section of the DREAM Act also
includes a provision that says if a Federal officer shares
information, perhaps in your application you have admitted that
you harbored other illegal aliens or you smuggled other people
in--if any Federal officer share the information in that
application with anyone else in the Federal Government, someone
who might wish to enforce the law against you, that Federal
officer is penalized up to $10,000 per violation.
So, you know, in an era when we are talking about how
Federal agencies aren't talking together well enough, this
would actually tie the hands, even further, of the Federal
agencies, by saying we don't want you to talk to one another
because we are going to make sure that this applicant cannot be
deported, no matter how ridiculous and how patently unqualified
the applicant is under the terms of the law.
So it is a particularly pernicious provision and some have
suspected that it might actually provide an incentive for some
people to just apply for the DREAM Act amnesty, knowing full
well they won't get it, but to give themselves a reprieve from
immigration enforcement.
It is a truly problematic provision.
Ms. Musgrave. Thank you.
Cory, would you talk about Yuma County and Phillips County,
and some of those areas of Colorado where we routinely have
some of our students go to another state to go to school, to
high school, and how some of theirs come right into Colorado,
it's just a few miles from a school, for instance.
Mr. Gardner. Right. Thank you, Congresswoman Musgrave. I
think the professor and Mr. Polis both touched on various
issues regarding this question. The question is whether or not
a person from out of state, whether they are a legal alien in
this country or an out-of-state student, who may live in
Kansas, come to Colorado and receive in-state tuition.
In many of the bordering communities in Colorado, in my
particular district, it is Ray, Colorado, Burlington, Colorado,
and others, Holyoke, Colorado, Peetz, Colorado--students from
Nebraska or Kansas may attend the high school.
In fact they may live one or two miles within our bordering
states, and so are very close, in fact the closest school
district would be in Colorado. They may have attended Colorado
schools, their entire K through 12 educational experience.
Yet under many of the acts that we have seen, many of the
provisions of this policies, even though they are legal U.S.
citizens, even though they graduated in the same class as a
undocumented student in there, that may be in their class as
well, they would not have the privilege of in-state tuition,
even though the went to the same school, the same process, the
same time, graduated in the same class.
Ms. Musgrave. Thank you.
Dr. Kobach, you talked about two court cases. Could you
tell me how those have originated. Have they come from students
and families?
Mr. Kobach. Yes, they have. Indeed, the two cases are Day
v. Sebelius, which is now entitled Day v. Bond, that is the one
in Kansas, and many, several of the plaintiffs in that case are
residents of Colorado, I believe, it's a group of almost 20
students from the states surrounding Kansas, that's in Federal
court, a few of their parents are also litigants, and they are
simply suing to enforce their right, under Federal law, to be
given the same tuition or at least to not be paying any more in
tuition than illegal aliens are charged in Kansas, and they are
also suing under the Equal Protection Clause of the Fourteenth
Amendment because they are being discriminated against because
of their status as U.S. citizens.
The court, as I mentioned, never got to the merits of the
issue, ruled on the preliminary threshold questions of standing
and private right of action. Hopefully, if we prevail before
the 10th Circuit here in Denver, it would go back to the
District Court.
The case in California is a slightly larger group of U.S.
citizens, students from all over the country who are attending
California institutions of higher education. Interestingly, two
of the plaintiffs in that lawsuit are the son and daughter of
Congressman Brian Bilbray.
He is a Congressman representing the State of California,
yet his own children cannot get in-state tuition in California
while illegal aliens in California can obtain in-state tuition.
One final point on the perspective of the students here. It
was suggested by Mr. Polis, that he made reference to the
Supreme Court decision in 1982 of Plyler v. Doe, and that was
the decision that says that states have to provide through
public education, K through 12 to illegal aliens.
And he implied that somehow the opportunities end once you
no longer have access to that free education.
On the contrary, there are many opportunities. One
opportunity that every alien national has is to return of
course to his home country where presumably there is subsidized
higher education available.
The second option is at the age of 18, when you begin
committing your own separate violation of Federal law. Prior to
the age of 18, you are not in violation of Federal law as a
separate, deportable offense. After the age of 18, you have
started committing the crime of unlawful presence. That
individual could go back to his home country, stay with
relatives and actually apply for a visa, do what millions of
people around the world are trying to do. Apply for a student
visa or a work visa and try to get on the legal track.
I suggest that if we are truly compassionate, we encourage
people to get on the legal track instead of offering them an
incentive to remain in the United States illegally. If they get
on the legal track, then that would demonstrate the kind of
respect for the rule of law that I think would entitle them to
consideration to become U.S. citizens.
Ms. Musgrave. Thank you.
Thank you, Mr. Chairman.
Chairman McKeon. Thank you very much. That concludes our
time for the first panel. Thank you for your participation. It
is really appreciated. If you think of something else that you
want to have in the record, you have 14 days to get it added to
the record. Thank you very much.
We will take just a short recess while we are waiting for
the next panel to take their places.
[Recess.]
Chairman McKeon. The committee will please come to order.
Thank you. We will now begin with our second panel. Again,
we want to thank all of you for being here today.
We will hear first from Ms. Theresa Shaw, who has served as
the chief operating officer of the Department of Education of
Federal student aid for the past 4 years. Prior to her current
appointment, Ms. Shaw was the executive vice president and
chief operating officer of Enumerate Solutions, Inc., a
Virginia-based startup technology firm. she began her career
working for Sally Mae, eventually advancing go the position of
senior vice president and chief information officer prior to
her departure in 1999.
Ms. Shaw graduated with a bachelor of science degree from
George Mason University and completed the executive development
series at George Washington University.
Then we will hear from Ms. Debra DeMuth, who was named as
director of the College Access Network, the guarantee agency
for the State of Colorado, in January 2006. She is also the
director of College Invest, the nonprofit secondary market in
Colorado, since 2000.
Ms. DeMuth is on the board of directors of the Education
Finance Council and involved in the College Savings Plan
Network, and the National Council of Higher Education Loan
Programs.
Prior to her service with the College Access Network and
College Invest, Ms. DeMuth served as the assistant deputy
manager of aviation for finance at Denver International
Airport.
She has also worked as executive vice president and chief
financial officer of Airport Integrated Systems and as senior
audit manager with Coopers and Lybrand in Boston and Denver.
Ms. DeMuth graduated from Colorado State University.
And then we will hear from Dr. Marilynn Marcy Liddell. She
has been the president of Aims Community College since 2003.
Prior to this position, she served as president of Glen Oaks
Community College, and the vice president of academic affairs
at Morton College in Illinois.
She has recently received a Fulbright scholarship and spent
6 weeks in Germany. Dr. Liddell is the president of the
American Association for Women in Community Colleges and serves
on their task force for global education.
She graduated from Drake University with a bachelor of arts
and a master's of arts. She obtained her doctorate of education
from the University of Houston and her PhD from Tristate
University.
Welcome, all of you. We will hear first from Ms. Shaw. You
already heard about the 5 minute time limit.
Ms. Shaw. Yes, sir.
Chairman McKeon. Thank you.
STATEMENT OF THERESA S. SHAW, CHIEF OPERATING OFFICER, OFFICE
OF FEDERAL STUDENT AID, U.S. DEPARTMENT OF EDUCATION
Ms. Shaw. Thank you. Good morning, Chairman McKeon,
Congresswoman Musgrave, members of the committee. Thank you for
inviting me to testify today.
I an Terri Shaw, the Department of Education's chief
operating officer for Federal student aid, and I am very
pleased to be here representing Secretary Spellings, the
Department, and the very talented and dedicated Federal student
aid team.
The Department of Education's grant, loan and work
assistance programs represent the largest source of student aid
for postsecondary education in the United States.
In fiscal year 2007, these programs will provide more than
$82 billion in financial support to more than 10 million
students and their families.
Federal student aid, under the direction of the secretary,
is charged with operational responsibility for oversight and
administration of all of the Department's Federal student aid
programs.
As one of the Government's few performance based
organizations, we are focused on rigorous oversight, efficient
operations, reduced costs, and superior customer service, and
we are proud of our recent achievements.
In January of 2005, the General Accountability Office
removed the Federal student aid program from the high risk
list. Working with all of the participants in the program, the
cohort default rate was reduced from an all-time high of 22.4
percent to an all-time low of 4.5. Yearly defaulted loan
recoveries increased from $38 million in 1993 to an estimated
$1.8 billion in 2006, while related collection costs decreased
by more than 50 percent.
We continue to successfully manage dramatically increasing
workloads with fewer staff, while controlling and containing
budgetary impact.
We dramatically transformed the aid application process
from 100 percent paper to more than 90 percent Web-based,
saving approximately $27 million annually in processing,
printing and postage, and cutting processing time from weeks to
days.
Mr. Chairman, your invitation specifically asked me to
comment on two issues, student access to the Federal student
aid programs and cost reduction in the Federal student loan
programs, and how they are impacted by the provisions of the
Deficit Reduction Act of 2005, and specifically the Higher
Education Reconciliation Act of 2005, or the HERA.
HERA created two grant programs, the academic
competitiveness grant or the ACG, for students who complete a
rigorous high school program of study, and the National Science
and Mathematics Access to Retain Talent, or SMART grant, for
students who are majoring in math, science, technology,
computer science, and in certain critical foreign languages.
These programs will provide $790 million in additional
student aid to students for the 2006-2007 academic year, and
$4.5 billion over the year 5 years.
Nationwide, we estimate 500,000 students will qualify to
receive ACG and SMART grants.
To date, almost 59,000 potentially eligible students from
California and over 5600 students from Colorado have applied
for ACG grants for this school year.
These programs will encourage more students to take
rigorous high school courses and to pursue these challenging
majors to help ensure our Nation's security and economic
competitiveness.
The HERA included other provisions that also increase
access for students and their families to the student aid
programs.
These provisions include increased annual loan limits,
eligibility of graduate students for PLUS loans, reduced loan
origination fees, and several changes for determining the
illegality for Federal student aid, including change to family
contribution and needs analysis calculations.
Although not directly related to increased access, another
noteworthy student and borrower benefit provided by HERA is
expanded loan forgiveness for highly qualified math, science,
and special education teachers serving low-income communities.
Congress also included key provisions to allow active duty
military personnel to be considered as an independent for
determining Federal student aid eligibility, and to provide
deferment of loan payment during active duty status.
To provide these benefits, the HERA included a number of
cost saving provisions. The recapture of excess interest paid
to FFEL lenders, restriction on lender subsidies for loans made
with proceeds of tax-exempt securities, reductions in default
insurance paid to FFEL lenders, and a requirement for default
fees, the insurance premium, to be deposited into a guarantee
agency's Federal fund.
Finally, as you know, Mr. Chairman, the secretary's
Commission on the Future of Higher Education recently approved
its final report, which will be formally presented to the
secretary later this month for her review and appropriate
action.
I know Secretary Spellings looks forward to working with
you, Mr. Chairman, Congresswoman Musgrave, and other higher
education leaders across the country to continue this dialog on
how to become more responsive to the needs of students,
parents, educators and the business community.
On behalf of the secretary, the Department and the Federal
student aid staff, thank you for the opportunity to testify
today and I will be happy to answer any questions.
[The prepared statement Ms. Shaw follows:]
Prepared Statement of Theresa S. Shaw, Chief Operating Officer, Federal
Student Aid, U.S. Department of Education
I. Introduction
Good morning. Chairman McKeon, Congresswoman Musgrave, and Members
of the Committee, thank you for inviting me to testify today. My name
is Terri Shaw and I am the Department of Education's Chief Operating
Officer for Federal Student Aid, a position I have held since September
2002. I am pleased to be here representing Secretary Spellings, the
Department, and the Federal Student Aid staff to share with you some of
our successes in elevating our performance, delivering tangible
results, and transforming our workforce.
The Department of Education's grant, loan, and work assistance
programs represent the largest source of student aid for postsecondary
education in the United States. In Fiscal Year 2007, these programs
will provide more than $82 billion in financial support to more than 10
million students and their families. In addition, Federal Student Aid
directly manages a student loan portfolio of $90 billion and oversees a
total student loan portfolio of nearly $402 billion.
I should also note that funding for Federal Pell Grants has risen
from $8.8 billion in 2001 to a proposed $13 billion for the coming
fiscal year. In addition, the Department of Education will make or
guarantee almost $62 billion in new student loans next year, a $4
billion increase over last year. These increases continue the
President's longstanding practice of offering historic levels of
support for college students.
Mr. Chairman, in the invitation you extended to me to testify
today, you asked for comments on two specific issues: to address the
impact of the Deficit Reduction Act on access by students to the
federal student aid programs and to comment on issues related to cost
reductions in the federal student loan programs. I will, of course,
respond to that request, but I would first like to provide the
Committee with some background information about Federal Student Aid
within the Department of Education.
II. Who/What Is Federal Student Aid
Created by Congress in 1998 under your leadership, Chairman McKeon,
Federal Student Aid was the federal government's first Performance-
Based Organization, or PBO, and is specifically charged with
operational responsibility for the administration and oversight of the
federal student aid programs authorized under Title IV of the Higher
Education Act of 1965. The authorizing statute provides that the
purposes of the PBO are to improve service delivery, integrate business
processes and systems, strengthen program integrity, reduce operating
costs, and increase workforce and management accountability.
As one of the government's few PBOs, Federal Student Aid upholds
high standards of operational efficiency, innovation, customer care,
and individual and organization performance with particular emphasis on
modernizing the delivery of the federal student aid programs.
Federal Student Aid is focused on:
effectively managing the federal student aid programs;
ensuring fair and effective oversight;
delivering world-class customer service;
developing award-winning products and services;
providing service delivery at the lowest cost without
sacrificing quality; and
creating and fostering a work environment that not only
attracts, develops, retains and rewards top performers, but also
expects high performance and demands accountability.
Federal Student Aid contracts with, manages, and monitors a number
of private sector providers for our major business functions. We have
created innovative contract solutions, including performance incentives
and disincentives, to optimize the investment of taxpayer dollars and
the return on that investment. While our federal employee staff numbers
just over 1,000 and is located in Washington and in ten regional
offices around the country, these private sector service providers add
the support of more than 5,000 clerical, technical, and professional
staff in locations all across the country from Utica, New York to
Bakersfield, California.
III. Historical Perspective
Prior to the establishment of Federal Student Aid as a Performance
Based Organization within the Department of Education, the federal
student aid programs were challenged with oversight and management
issues, high student loan cohort default rates, and customers who were
not satisfied with the service they were receiving. In 1990, the
Government Accountability Office (GAO) found the federal student aid
programs at high risk for fraud, waste, abuse and mismanagement.
Financial management and internal controls were deemed deficient and
unqualified audit opinions were not attainable. In 1990, student loan
default rates had hit an all time high of 22.4 per cent. Customer
satisfaction scores were not even measured, but if they had been, they
would not have been positive.
Federal Student Aid, with its specific statutory mandate,
authorities, and flexibilities, was created to effect change. We demand
and expect breakthrough performance and innovation from both our own
employees and from our contractors that results in higher efficiency,
greater productivity and a more satisfied customer. We are transforming
our workforce and culture to be highly effective by: 1) ensuring
clarity of vision, mission and values; 2) ensuring that staff at all
levels firmly understand their individual and inter-dependent roles in
attaining the vision and mission; and 3) most importantly, requiring
high performance and individual and organization accountability.
IV. Accomplishments/Progress vs. Historical Perspective
A. High Risk Removal and Clean Audits
We are particularly proud of the Department's and Federal Student
Aid's achievement of a major President's Management Agenda (PMA), GAO,
and departmental objective of reducing the vulnerability of the federal
student aid programs to fraud, waste, abuse, and mismanagement.
As a result of Federal Student Aid's specific focus on reducing
these vulnerabilities and our clear and sustained demonstration of
results, in January of 2005, GAO removed the federal student aid
programs from its High Risk List. Additionally, in March 2005, we
achieved ``all green'' status on the PMA Scorecard used by the Office
of Management and Budget (OMB) for monitoring agency progress and
status. We have received unqualified audit opinions since Fiscal Year
2002 with no material weaknesses noted since Fiscal Year 2003.
B. Default Rate Reductions and Default Management
We continue to make meaningful progress on reducing student loan
default rates. On September 19, 2005, the Secretary announced that the
2004 cohort default rate was 4.5 percent, an all-time low and a
dramatic 80 percent reduction from the high of 22.4 percent in 1990.
Additionally, the outstanding combined student loan portfolio for both
the Federal Family Education Loan (FFEL) and Direct Loan programs has
grown from $65 billion in 1990 to nearly $402 billion in 2005. As the
outstanding portfolio has grown an astounding 518 percent over 15
years, the defaulted loan share has decreased from nearly 17 percent of
the portfolio in 1990 to just over 6 percent in 2005.
C. Default Recoveries and Collection Costs
As noted earlier, Federal Student Aid contracts with private-sector
providers for our major business functions. One of these key business
functions is the collection of defaulted loans that were made by, or
assigned to, the Department of Education. Today, Federal Student Aid is
the largest debt collection outsourcer in the federal government. We
have approximately $18 billion in defaulted student loans currently
under management with 17 contractors, including five small businesses
through set-aside contracts. Our most recent contracts have several
performance-based evaluation measures, making the contracts models for
performance-based contracting in the federal government.
Over the past several years, we have dramatically increased the
recovery of defaulted dollars while significantly reducing the cost of
that recovery. While yearly defaulted loan recoveries have increased
from $38 million in 1993 to an estimated $1.8 billion in 2006 (47 times
that of 1993), related collection costs have been reduced more than 50
percent since 1993; from 33 cents for every dollar collected to about
15 cents.
D. Direct Operating Cost Reductions
Federal Student Aid's ability to manage and control operating
expenses is based on a philosophy of sound fiscal management and
continuous process improvement practices that increase productivity and
operational efficiencies as well as innovation in our products,
services and supporting technologies. This has allowed us to
successfully manage dramatically increased workloads and control and
contain budgetary impact. Since Fiscal Year 2000, applications for
federal student aid (the FAFSA) have increased 13 percent, the number
of loans has increased 63 percent, Federal Pell grant recipients have
increased 30 percent; and collection accounts under our management have
increased 6 percent, all without corresponding increases in our
operating expenses or staffing levels. In fact, we continue to shrink
our direct operating expenses as a portion of Federal Student Aid'
overall administrative budget, down from 54 percent in Fiscal Year 2000
to 44 percent in Fiscal Year 2006, and we are operating at a staffing
level 15 percent below that of Fiscal Year 2000. We measure the unit
cost for all of our key delivery areas and annually set new performance
targets for reduction, while maintaining or increasing the
effectiveness in those areas.
One notable example is the reduction in the direct unit cost for
processing applications for federal student aid (the FAFSA), with more
that 90 percent of applications submitted electronically rather than by
paper. Our award winning electronic student aid application, FAFSA on
the Web, not only provides families with an efficient and customer
focused electronic application process, but also results in reduced
costs saving approximately $27 million annually in processing, printing
and postage costs.
We continue to develop and use performance-based contracts to
reengineer and operate our student aid application, loan servicing, and
loan collection business functions and systems. We have retooled our
largest contracts in the past several years so that taxpayers will save
more than one billion dollars over the period of the agreements.
E. Customer Satisfaction
Independently collected customer satisfaction scores for our
electronic FAFSA are comparable to corporations such as UPS, Mercedes
Benz (DaimlerChrysler), and Amazon.com; Direct Loan Servicing scores
are better than Wachovia Bank and similar financial services entities;
Pell Grant and Direct Loan originations compare favorably to E-Trade.
In addition, the Federal Student Aid Ombudsman, in its statutorily
mandated customer advocate role, recently provided assistance to its
100,000th customer.
V. Program Changes: Benefits to Students and Borrowers
Mr. Chairman, allow me now to specifically respond to your request
that I comment on the impact of the Deficit Reduction Act on access by
students to the federal student aid programs. The relevant section of
the Deficit Reduction Act is the Higher Education Reconciliation Act of
2005, or the HERA. Included in the HERA were several provisions that
directly address the issue of access by needy students and their
families to our programs.
A. ACG and SMART Grants
The most obvious of the HERA provisions that increase access to the
programs was the creation of two new grant programs that, in addition
to providing increased grant funding to Federal Pell Grant recipients,
address other issues of great importance to the nation. For students
who complete a rigorous high school program of study, the Academic
Competitiveness Grant, or ACG, Program provides additional funds of up
to $750 to students for their first academic year of a degree program
and up to $1,300 for their second academic year. This is in addition to
Pell Grant money students are already receiving.
The National Science and Mathematics Access to Retain Talent Grant
Program, or the SMART Grant, provides up to $4,000 per year in new
grant funding to students who are majoring in math, science,
technology, computer science, and in certain critical foreign
languages. These programs will help to encourage more students to take
rigorous high school courses and to pursue these challenging majors to
help ensure our nation's security and economic competitiveness.
These programs will provide $790 million in additional student aid
to students for the 2006-2007 academic year and $4.5 billion over the
next five years. Nationwide, we estimate that approximately 500,000
students will be eligible to receive ACG and SMART Grants for the 2006-
2007 award year.
Secretary Spellings has taken a personal role in ensuring that the
new grant programs are deployed on time so that eligible students are
provided additional grant funding for the new school year that has just
begun, or will soon begin, across the country.
The improved operational, management and performance capabilities
of Federal Student Aid that I described earlier enabled the Department
and Federal Student Aid to implement, in collaboration with the states
and our college and university partners, the two new grant programs in
just five short months after they were enacted by the HERA.
I would note that, to date, 552,562 potentially eligible ACG
students have provided information to us so that their eligibility can
be determined and funds delivered by their school. 58,670 of these
students are from California and 5,683 are from Colorado. Thus far,
schools have drawn down $5.5 million to fund SMART grants to an
estimated 2,900 students.
B. Other HERA Provisions
The HERA, of course, included other changes to the federal student
aid programs. Some of these HERA changes, such as increased loan limits
and expanded loan forgiveness were included in the Administration's
Fiscal Year 2006 Budget. The changes related to the student loan
programs make them more efficient and cost-effective vehicles for
helping students finance postsecondary education. In fact, much of the
additional student aid funding included in the Pell Grant Program, the
two new grant programs, and the increases in loan limits, resulted from
these cost savings.
Specifically, the following HERA provisions directly increase
access for students and their families to the student aid programs:
the new ACG and SMART Grants discussed earlier;
increased annual loan limits in the FFEL and Direct Loan
programs;
eligibility of graduate students for PLUS Loans;
reduced loan origination fees;
the inclusion of additional expenses in a student's ``cost
of attendance'' for the purpose of determining the student's
eligibility for federal student aid;
changes to the formulas for calculating a student's
expected family contribution and thus increasing a student's
eligibility for federal student aid;
further simplification in determining eligibility for
students from low income families including consideration of the
receipt of other federal means tested benefit programs;
active duty military personnel are now considered
independent of their parents for determining eligibility for federal
student aid;
changes in the treatment of certain assets (small
businesses, tuition savings plans, etc.) for determining eligibility
for federal student aid; and
modification of the ``drug conviction'' student
eligibility requirement to clarify that only offenses that occurred
while the student was receiving federal student aid would result in
ineligibility.
Other important benefits provided to students and borrowers by the
HERA, although not directly related to increased access are the
following:
expanded loan forgiveness for highly qualified math,
science, and special education teachers serving low-income communities;
new loan repayment deferment for active-duty military
personnel;
loan discharges based on identity theft;
reduced number of on-time payments a borrower who has
defaulted on his or her loan must make before ``rehabilitating'' the
loan;
changes to the return of Title IV funds rules so that some
students do not need to repay as much in grant funds when they withdraw
from school; and
increased borrower control over loans used to meet
remaining institutional charges when a student withdraws.
VI. Cost Reduction in the Federal Student Loan Programs
Additionally, in response to your request that I address issues
related to cost reductions in the federal student loan programs, I
first refer you to my earlier remarks about Federal Student Aid's
mandate. As stated earlier, ensuring fair and effective oversight is an
overriding focus of Federal Student Aid. This oversight means that not
only do we do everything we can to make sure that these important
student aid dollars go only to students who have met the statutory
eligibility requirements, but also that our delivery partners comply
with all requirements and that they perform their fiduciary
responsibilities properly. These partners include, in addition to
schools and colleges, the lenders, secondary markets, and guaranty
agencies that help us deliver more than $43 billion annually in student
loan funds under the FFEL Program. Among the activities and tools that
Federal Student Aid uses to ensure FFEL partner compliance are on-site
program compliance reviews, review of independent audited financial
statements, performance scorecards and benchmarks, and data analysis
and interrogation to identify potential risk areas for further review.
Of course, the HERA legislation included a number of student loan
cost savings provisions that, as noted earlier, helped fund increases
in the Pell Grant Program, the two new grant programs, and increased
loan limits in the FFEL and Direct Loan programs. Those provisions
include the:
recapture of excess interest paid to FFEL lenders;
placement of restrictions on ``school lenders'';
further limitation on special allowance payments for loans
made under the ``9.5 percent'' rule;
reductions in default insurance paid to FFEL lenders;
requirement for default fee to be deposited into a
guaranty agency's federal fund; and
restrictions on a guaranty agency's use of consolidation
as a collections tool.
VII. Closing
Finally, as you know, the Secretary's Commission on the Future of
Higher Education recently approved its final report, which will be
formally presented to the Secretary later this month for her review and
appropriate actions. I know she looks forward to working with you, Mr.
Chairman, Congresswoman Musgrave and other higher education leaders
across the country to continue this dialogue on how to become more
responsive to the needs of students, parents, educators and the
business community.
Mr. Chairman, in closing I would like to summarize by restating
that Federal Student Aid, under the leadership of Secretary Spellings
has, and will continue to, effectively and efficiently administer the
federal student aid programs in accordance with the statutory and
regulatory requirements. We will do so with pride in our
accomplishments as the government's first Performance-Based
Organization and we will continue to meet our objectives of providing
students and families with a world-class student aid delivery system
with focus on reduced costs, rigorous oversight and superior customer
service.
I am honored to be part of Secretary Spellings' team at the
Department of Education. Federal Student Aid's goal is to ensure that
all eligible students and families can benefit from federally supported
financial assistance for postsecondary education and we champion that
goal and its value to our society.
On behalf of the Secretary, the Department and the Federal Student
Aid staff, thank you for the opportunity to testify today.
I am pleased to answer any questions you may have.
______
Chairman McKeon. Thank you very much.
Ms. DeMuth.
STATEMENT OF DEBRA L. DEMUTH, DIRECTOR, COLLEGE ACCESS NETWORK
Ms. DeMuth. Good morning, Mr. Chairman, Congresswoman
Musgrave. Thank you for this opportunity to testify about
Colorado's efforts to make higher education more accessible and
affordable.
College Access Network is a division of the Colorado
Department of Higher Education and it is the designated
guarantor of student loans in the State of Colorado.
Colorado faces three fundamental issues. Students need to
be better prepared to succeed in college. The rising cost of
education is putting additional demands on financial aid
resources, and families need to have knowledge of and access to
the resources available.
Colorado not only recognized that it needed to improve in
these areas but has already put a number of initiatives in
place to move Colorado in the right direction.
I will outline some of these today that support the changes
made under the Deficit Reduction Act.
The College in Colorado Scholarship was established to
reward high need students who work hard to be academically
prepared for a college education. Students must sign up in the
8th and 9th grades, maintain a 2.5 GPA and complete a rigorous
curriculum of classes.
In the first 6 months, we have collected nearly 6000
applications. This scholarship complements the grants that Ms.
Shaw just discussed under the Deficit Reduction Act.
In addition, launched in 2004, the College in Colorado Web
site serves as a one-stop shop for students wishing to further
their education past high school.
CollegeInColorado.org resources include the career center,
which helps students determine which careers best fit their
interests and goals, the academic planning section which
outlines Colorado's higher education admission requirements and
helps students plan for them. The college search section, which
offers information about Colorado and out-of-state higher
education institutions. The financial aid section which
describes available grants, scholarships work study and loans,
and the pre-collegiate partnerships component which highlights
a statewide network of resources to help Colorado middle and
high school students plan, apply and pay for college.
Nearly 550,000 people have visited CollegeInColorado.org in
2005, and visits in 2006 are on track to exceed that, with more
than 400,000 visitors through July of this year.
Nearly 10,000 students have applied to college through
CollegeInColorado.org since it was launched in 2002.
College Access Network is honored to be one of just five
state guaranty agencies that won approval to operate under
Voluntary Flexible Agreements or VFAs. VFAs are designed to
reward guarantee agencies for results and performance, and
allows them to test innovative ways to improve the program for
students and parents.
Under our VFA approved in 2004, College Access Network has
implemented innovative approaches to help borrowers avoid
defaulting on their student loans.
Working in partnership with the U.S. Department of
Education, Colorado received approval to focus our efforts on
delinquency prevention, and to shift our funding from default
collection to collection efforts associated with keeping the
borrower loans in good standing and out of default.
College Access Network found that it is much more effective
to use trained counselors to work intensively with borrowers,
to avoid default in the first place.
Lenders have agreed to provide notification of default up
to 60 days earlier than required by law, to allow early
intervention and maximize the time available to assist
borrowers in knowing their options and developing a plan that
addresses their financial constraints.
If a borrower does default, the College Access Network
outreach counselors focus on working with borrowers to
rehabilitate their loans.
Under our VFA, a borrower can reestablish good standing by
making 9 monthly on-time payments. This significantly increased
our success in getting loans rehabilitated and keeping the
borrowers out of default, in contrast to requiring 12 monthly
on-time payments.
The alternative for borrowers is to consolidate out of
default. We found, in Colorado, that 50 percent of our
borrowers, that consolidated out of default actually would go
into redefault. Under our VFA, we limited the defaulted loans
that we could consolidate.
College Access Network has decreased its cohort default
rate from over 6 percent in 1998 to a draft rate of 2.7 percent
in 2004.
Both the shortening of the rehabilitation timeframe to 9
months and the reduction in revenue a guarantee agency can
receive on consolidating loans out of default were incorporated
into the Deficit Reduction Act.
This is a great example of Congress, Federal Government and
state government working together for program improvement. At
College Access Network, we share your goal of increasing access
to higher education by reducing the financial hurdles students
and families face.
We look forward to continuing to work with the committee
and the U.S. Department of Education to make college a reality
for students.
[The prepared statement Ms. DeMuth follows:]
Prepared Statement of Debra L. DeMuth, Director, College Access Network
and CollegeInvest
Good morning Mr. Chairman and Congresswoman Musgrave. Thank you for
this opportunity to testify about Colorado's efforts to make higher
education more accessible and affordable and the impact of the Deficit
Reduction Act.
College Access Network and CollegeInvest are both divisions of the
Colorado Department of Higher Education. I serve as director of both
entities, which were created by the Colorado General Assembly in 1979.
College Access Network is the designated guarantor of student loans for
the State of Colorado, with nearly $15 billion in loans under the
Federal Family Education Loan Program (FFELP). CollegeInvest provides
low-cost student and parent loans and the only 529 college savings
plans that combine federal tax advantages with a Colorado state income
tax deduction for all contributions. Although they both are affiliated
with the State of Colorado, College Access Network and CollegeInvest
operate without any subsidies from the state. In fact, revenue from the
two entities supports various initiatives to improve access to higher
education opportunities for Colorado residents. Specifically,
CollegeInvest provides more than $500,000 a year in scholarships and
college savings accounts while the Colorado Access Network provides
$300,000 in college scholarships annually through participating higher
education institutions. In addition, both entities have contributed to
funding a $75 million scholarship fund--the College In Colorado
Scholarship.
In Colorado, intense interest has been focused on the issue of
access to higher education opportunities, in part due to what is known
as the ``Colorado paradox.'' While Colorado ranks near the top of all
states for the number of college-educated adults, it ranks near the
bottom in sending Colorado kids to college. While some states send
nearly 60 percent of high school freshman to college within four years,
in Colorado only 39 percent of high school freshman go on to college
within that timeframe. When it comes to low-income or minority
students, the numbers are especially sobering. Only 9 percent of the
state's college-age Latino males are enrolled in college and Colorado
ranks in the bottom quartile when it comes to sending low-income
students to college.
When the Deficit Reduction Act was enacted, much was written about
its upsides and downsides for higher education. At the time,
CollegeInvest noted that the law's impacts varied depending on one's
specific circumstances and the longer term impacts of some of the
changes are unknown. However, three fundamental issues remain true:
students need to be better prepared to succeed in college, the rising
cost of education is putting additional demands on financial aid
resources, and families need to have knowledge of, and access to the
resources available.
Colorado has not only recognized that it needs to improve in these
areas but it has already put a number of initiatives in place to move
Colorado in the right direction. I will outline some of those today
that support the changes made under the Deficit Reduction Act.
College In Colorado Scholarship
Established in 2005, the goals of the College In Colorado
Scholarship are to reward high need students who work hard to be
academically prepared for a college education. Students sign up in the
8th and 9th grades, and agree to maintain a 2.5 GPA and complete a
rigorous curriculum of classes established by the Colorado Commission
on Higher Education. If they are Pell-eligible, they receive up to
$1,500 per year toward their cost of education for up to 5 years. While
in college they must continue to maintain satisfactory academic
progress and a 2.0 GPA.
This program was initially funded with $50 million contribution
from CollegeInvest, and subsequently received $25 million from the
College Access Network. In the first six months, we have collected
nearly 6,000 applications from high school students committing to the
requirements of this program. The College In Colorado scholarship will
work well with and complement the Academic Competitiveness Grant
created under the Deficit Reduction Act.
College Access Initiative
The College Access Initiative provision in the Deficit Reduction
Act calls for each guaranty agency to provide access for students and
families to a comprehensive listing of the postsecondary education
opportunities, programs, publications, Web sites, and other available
services. I am pleased to say that Colorado is ahead of the curve in
this area, thanks to the College In Colorado statewide initiative.
Launched in 2004, College In Colorado serves as a ``one-stop shop''
for students wishing to further their education past high school. A Web
site (www.CollegeInColorado.org) provides resources to address the
hurdles that Colorado students face when contemplating college:
primarily the lack of financial resources, academic preparation and
information.
CollegeInColorado.org resources include the Career Center, which
helps students determine which careers best fit their interests and
goals; the Academic Planning section, which outlines Colorado's Higher
Education Admission Requirements and helps students plan for them; the
College Search section, which offers information about Colorado and
out-of-state higher education institutions; the Financial Aid section,
which describes available grants, scholarships, work study and loans,
and provides a calculator to help students compare their expected
income for a chosen occupation to the amount of student loan debt they
may accrue; and the Pre-Collegiate Partnerships component, which
highlights a statewide network of resources to help Colorado middle and
high school students plan, apply and pay for college.
College In Colorado is currently making some improvements to the
Web site, including a comprehensive career and curriculum update and a
re-structuring of the home page to make it more inviting, flexible and
easier to navigate. These changes will help ensure that when someone
visits CollegeInColorado.org with a question about planning, applying
or paying for college, they will immediately know where to go for
answers.
Nearly 550,000 people visited CollegeInColorado.org in 2005 and
visits in 2006 are on track to exceed that, with more than 400,000
visitors through July of this year. Nearly 10,000 students have applied
to college through CollegeInColorado.org since it was launched in 2002.
Enhancements to Guarantee Agency Effectiveness
College Access Network is honored to be one of just five state
guaranty agencies that won approval to operate under a Voluntary
Flexible Agreement (VFA). VFAs are designed to reward Guarantee
Agencies for results and performance and allows them to test innovative
ways to improve the program for students and parents. Under our VFA,
approved in 2004, College Access Network has implemented innovative
approaches to help borrowers avoid defaulting on their student loans.
Working in partnership with the U.S Department of Education, Colorado
received approval to focus our efforts on delinquency prevention, and
to shift our funding from default collection efforts to results
associated with keeping borrower loans in good standing and out of
default. College Access Network found that it is more effective to use
trained counselors to work intensively with borrowers to avoid default
in the first place. Lenders have agreed to provide notification of
defaults up to 60 days earlier than required to allow early
intervention and maximize the time available to assist the borrowers in
knowing their options and developing a plan that addresses their
financial constraints.
Once a borrower does default, the College Access Network outreach
counselors focus on working with borrowers to rehabilitate their loans.
Under our VFA, a borrower can reestablish good standing by making 9
monthly on-time payments. This significantly increased our success in
getting loans rehabilitated and keeping borrowers out of default in
contrast to requiring 12 monthly on-time payments. The alternative for
borrowers is to consolidate out of default. We found that 50% of
borrowers that consolidated out of default would redefault. In
partnership with the Department of Education, under our VFA we limited
the defaulted loans that we would consolidate. Our efforts and funding
are based on our success in rehabilitating the loans. Thanks in part to
these strategies; College Access Network was able to decrease its
cohort default rate from over 6% in 1998 to a draft cohort rate of 2.7%
in 2004.
Both the shortening of the rehabilitation timeframe to 9 months and
the reduction in revenue a guarantee agency can receive on
consolidating loans out of default were incorporated into the Deficit
Reduction Act. This is a great example of congress, federal government,
and state government working together for program improvement. We
appreciate the U.S. Department of Education's efforts to partner with
us to continue to identify new ways of improving the program.
At College Access Network and CollegeInvest we share your goal of
increasing access to higher education by reducing financial hurdles
students and families may face. We look forward to continue working
with you and the U.S. Department of Education to make college a reality
for more students.
______
Chairman McKeon. Thank you very much.
Dr. Liddell.
STATEMENT OF DR. MARILYNN LIDDELL, PRESIDENT, AIMS COMMUNITY
COLLEGE
Dr. Liddell. Thank you very much, Mr. Chairman, and
Congresswoman Musgrave. I appreciate you allowing me to come
here to bring this down to the local level from the state level
and the national level.
As you know, community colleges have two rather distinct
characteristics that separate us from our university
colleagues.
First, we focus on undergraduate teaching and learning
rather than graduate training and research, and also the
community college mission embraces open access.
In light of these factors, then I would like to share with
you the story about our financial aid realities at Aims
Community College. total financial aid recipients increased to
52.2 percent in last year's award year of 2005-2006. Some of
the demographics about our students include 54 percent are
female, 59 percent are full-time students, many of those
working full time as well so that they can afford to go to
school.
32 percent plan to transfer to a 4-year college or
university. More than half of them come right here to UNC. 36
percent are enrolled in career and technical education
programs, leading to a certificate or associate of applied
science.
In 2004-2005, almost half of the financial aid recipients
had incomes of under 15,000. 1349 of these students received
Pell grants in an average amount of $2350. They borrowed an
average of $2298 in subsidized Federal direct student loans,
and an average of $2690 in unsubsidized Federal direct loans,
for a combined yearly average loan debt of $2415.
Despite this, for last year, our default draft rate is
under 10 percent.
Pell grant recipients for 2004-2005, and 2005-2006, were 43
percent first generation students. Loan recipients for the same
were 41 percent first generation.
In 2004-2005, 17.6 percent of Pell grant recipients were
employed full time and 14.1 percent were employed part time.
Direct loan recipients were employed at higher rates in
both years. For 2004-2005, 24.2 percent of loan recipients were
employed full time and 19.4 percent were employed part time.
For 2005-2006, that increased to 30.3 percent full time and
20.4 percent part time. Total borrowers of subsidized and
unsubsidized Federal student loans increased by 15 percent from
2004-2005 to 2005-2006.
In its 2006 report, Grants For Students: What They Do, Why
They Work, the Educational Policy Institute documents that an
increase in available grant aid will help to recruit low-income
students. These students, we find, process the cost-benefit
ratio of postsecondary education differently than more affluent
youth, and consequently are more in need of financial
inducements to encourage enrolling and remaining in school.
The larger question is where will such grant aid come from.
Many priorities vie for Federal funding as the Federal deficit
continues to rise.
However, the deficit reduction act we believe is a positive
one in as much as it limits the profit levels for lenders and
only might be negative in terms of loss of the fluctuating
percent of interest.
The financial aid community is also supportive of the
concept that most dollars should be channeled to neediest
students. Colorado, as you know, is one of the states that has
seen significant decreases in funding for the past years.
That has caused our university colleagues to raise tuition
significantly, in some cases 25 to 30 percent.
As tuition levels rise and more restrictive enrollment
policies are implemented at these 4-year institutions, we
probably will see a corresponding increase in the number of low
and middle-income students enrolling in community colleges.
Indeed, we have seen evidence of that this year as our
enrollments are up 5 percent.
The picture at Aims Community College is reflected
nationally. Nationwide, community colleges enroll 45 percent of
all students in American higher education. 59 percent are
women, and community colleges enroll 55 percent of all
Hispanics attending college in the United States.
66 percent of our funding comes from state and local
sources. We know that preparation for college plays a key role
in access and success, but student financial aid is also
essential.
In 2004,college enrollment in the year following high
school graduation was 35 percent of those with incomes below
10,000 and 75 percent, or more than twice that, for those with
incomes between 75,000 and a 100,000.
In 2005-2006, more than 2 million community college
students received $4.3 billion in Pell grants. Despite this
support an dour low tuition, our students are not immune from
debt, and in 2004, 28 percent of community college associate
degree recipients graduated with an average debt amount of
$5800.
Given this, community colleges, and indeed, all of American
higher education support an increase in the maximum Pell grant
to $4500 per year. We know that the maximum Pell grant
increased dramatically in the last decade but we encourage
Congress to consider the maximum grant being frozen at $4.050
for the last 4 years.
We have managed to keep our in-district tuition at Aims
flat for the past 3 years and we hope to be able to continue to
do that by having Federal and state subsidies for our students.
Last, I would be remiss if I did not mention two community
college priorities. One was certainly reflected in statements
by my colleagues about the academic competitiveness grant. We
would like to see part-time students made eligible for the new
academic competitiveness grants, and also certificate students
should receive these grants.
Finally, helping students fund higher education must become
and remain a top priority at the Federal level, if we wish to
continue to provide access for students from all economic
levels.
Increases in grant assistance to the neediest students are
a means to that end and modest increases in loan limits will be
of some help, but ethically, we must ask the question, how much
debt can we encourage or allow students to accumulate in
exchange for higher education?
Thank you. I also will be happy to answer any questions.
[The presentation submitted by Ms. Liddell follows:]
Presentation Submitted by Dr. Marilynn Liddell, President, Aims
Community College
Aims Community College
Greeley, Colorado
Fall 2006 enrollment: 4518
Aims Student Profile:
Students at Aims Community College are increasingly applying for
and receiving financial assistance. In award year 2004-05, 45.7 percent
of students received some form of aid. Total aid recipients increased
to 52.2 percent in award year 2005-06.
Who are our students? Here are the demographics:
Almost 54 percent are female.
19 percent are 18-24.
72 percent are white; 18.8 percent are Hispanic.
59 percent are full-time students.
84 percent are degree seekers.
32 percent plan to transfer to a four-year college or
university.
36 are enrolled in career and technical education
programs, leading to a certificate or Associate of Applied Science
degree.
Income and Financial Aid:
In 2004-05, almost half of the 2406 financial aid
recipients had income under $15,000.
1349 of these students received Pell Grants in an average
amount of $2350.
They borrowed an average of $2298 in subsidized Federal
Direct Student Loans and an average of $2690 in unsubsidized Federal
Direct Student Loans for a combined yearly average loan debt of $2415.
Additional demographic information:
Pell Grant recipients for 2004-05 and 2005-06 were 43
percent first generation.
Loan recipients for 2004-05 were 41 percent first
generation. That number increased to 42 percent for 2005-06.
In 2004-05, 17.6 percent of Pell Grant recipients were
employed full-time; 14.1 percent were employed part-time. For 2005-06
full-time employed Pell recipients declined to 15.6 percent; part-time
employed also declined to 12.9 percent.
Direct Loan recipients were employed at a higher rate in
both years. For 2004-05, 24.2 percent of loan recipients were employed
full-time and 19.4 percent were employed part-time. Numbers for 2005-06
increased to 30.3 percent employed full-time and 20.4 percent employed
part-time.
Total borrowers of subsidized and unsubsidized federal
student loans increased by 15 percent from 2004-05 to 2005-06. Many
students are eligible for both loans, but make different decisions
about how to use that eligibility. Some accept only subsidized loans so
they will not be responsible for any interest payment or accumulation
while they are in school. Others need the entire amount they can borrow
to meet school and living costs, so accept both loans.
The Local View:
In its 2006 report; Grants for Students: What They Do, Why They
Work; the Educational Policy Institute documents that an increase in
available grant aid will help to recruit low-income students. These
students process the cost-benefit ratio of post-secondary education
differently than more affluent youth, and consequently are more in need
of financial inducements to encourage enrolling and remaining in
college.
The larger question is where such grant aid will come from. Many
priorities vie for federal funding as the federal deficit continues to
rise. However reducing financial aid to offset deficit budget will
severely restrict access to post-secondary education for lower socio-
economic classes. That in turn will cyclically reduce the ability of
future generations to earn sustainable wages, causing an additional
drain on state funding for welfare.
State budgets are also dependent on state economies and changing
ideas of how financial aid funds should be allocated to schools. One
encouraging concept in review now for Colorado is that of determining
aid allocations based on the need levels of students at each eligible
institution rather than on an archaic entitlement model.
The financial aid community is supportive of the concept that the
most dollars should be channeled to the neediest students.
Institutional financial aid needs continued expansion, perhaps in
conjunction with student support services to minority and low-income
students. Institutional priorities such as recruiting and retention of
qualified faculty, administrators and other personnel; maintenance of
physical plant facilities, and development of new initiatives that
respond to changing clientele needs and priorities also compete for
dollars. As tuition levels rise and more restrictive enrollment
policies are implemented at four-year institutions, we may see a
corresponding increase in the number of low-and middle-income students
enrolling in community colleges College Foundations and other
philanthropic organizations recognize the need for student funds as
well, but can't fill the void on their own.
The National Picture:
The picture at Aims Community College is reflected nationally.
Nationwide, community colleges enroll 45% of all the students in
American higher education. 59% are women, and community colleges enroll
55% of all the Hispanics attending college in the U.S. 66% of our
funding comes from state and local sources.
We know that preparation for college plays a key role in access and
success, but student financial aid is also essential. In 2004, college
enrollment in the year following high school graduation was 35% for
those with incomes below $10,000. 75% or more than twice that, for
those with incomes between $75,000 and $100,000. High school graduates
of high ability and low incomes are more likely to enroll in college
than those with low ability and high incomes.
In 2005-06, more than 2 million community college students received
$4.3 billion in Pell grants. Despite this support and our low tuitions,
our students are not immune from debt: in 2004, 28% of community
college associate degree recipients graduated with debt; the average
amount was about $5,880.
Given this, community colleges and indeed all of American higher
education support an increase in the maximum Pell Grant to $4,500. A
significant increase in the Pell Grant was recently endorsed by
Secretary Spellings's Commission on the Future of Higher Education,
which called for a substantial increase in need-based financial aid
generally.
The maximum Pell Grant increased dramatically in the last decade,
from $2,340 in Fiscal Year (FY) 1995 to $4,000 in FY 2002.
Unfortunately, the maximum grant has been frozen at $4,050 the last
four years. This is at a time when, due largely to funding reductions
by state and local sources, community colleges tuitions have been
increased.
We all know that we have a large federal deficit, but we also know
that there is no better investment than higher education. In 2005, the
average high school diploma holder earned $31,600, the average
associate degree holder earned $ 40,600, and the average B.A. holder
garnered $51,000. For millions of students, federal student aid makes
these degrees possible.
Lastly, I would be remiss were I not to mention two community
colleges priorities: Part-time students should be made eligible for the
new Academic Competitiveness Grants, which needs a legislative change,
and certificate students should receive these grants, which we believe
is required by law but which has not been implemented by the Department
of Education.
Helping students fund higher education must become and remain a top
priority at the federal level if we wish to continue to provide access
to college for students from all economic levels. Increases in grant
assistance to the neediest students are a means to that end. Modest
increases in loan limits will be of some help as well, but ethically
how much debt should we encourage or allow students to accumulate in
exchange for higher education?
AIMS JUNIOR COLLEGE DISTRICT SCHEDULE OF FEDERAL FUNDS
[FY02 through FY06]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Federal Grantor/Pass-Through Federal Fiscal Year
Grantor/Program or Cluster CFDA ---------------------------------------------------------------------------- Aims Department Funding Notes
Title Number D02 03 04 05 06 Total or Program
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. Department of Education:
Pell Grant Program....... 84.063 1,953,366 2,418,356 2,758,822 3,173,441 2,794,918 13,098,903 Financial Aid Funding Ongoing
Program
Supplemental Educational 84.007 77,099 75,967 89,812 76,362 82,885 402,125 Financial Aid Funding Ongoing
Opportunity Grants. Program
College Work-Study 84.033 31,202 26,023 22,254 49,996 34,370 163,845 Financial Aid Funding Ongoing
Program. Program
Federal Direct Student 84.268 2,200,237 2,871,658 3,780,736 4,621,033 5,242,404 18,716,068 Financial Aid Funding Ongoing
Loans. Program
English Language 84.195 .......... 104,939 302,199 375,422 279,195 1,061,755 Ft. Lupton Campus Continuing in
Acquisition--Career FY07
Ladder.
Child Care Access Means 84.335 15,036 26,811 .......... ........... 26,000 67,847 MECEC Continuing in
Parents In School. FY07
Trio Student Support 84.042 .......... .......... .......... ........... 146,290 146,290 Student Support Continuing in
Services. Services FY07
Title V--Strengthening 84.031 411,725 327,201 309,162 281,672 247,317 1,577,077 Ft. Lupton Campus Ended FY06
Hispanic Serving
Institutions.
Title III--Strengthening 84.031 .......... 219,799 268,700 391,914 449,016 1,329,429 Strengthening Continuing in
Institutions. Institutions FY07
Passed through Colorado
Community Colleges:
Perkins Vocational 84.048 353,400 298,894 309,912 303,874 344,596 1,610,676 Career & Continuing in
Education--Basic Technical Ed FY07
Grants to States:.
School to Career 84.278 153,071 615 .......... ........... ........... 153,686 ................. Ended in FY03
Partnership.
School to Career 84.278 38,947 79 .......... ........... ........... 39,026 ................. Ended in FY03
Lighthouse.
Passed through Colorado
Department of Education:
Teacher Quality 84.336 .......... .......... 21,244 28,493 5,945 55,682 Education Dept. Ended in FY06
Enhancement--UNC.
Teacher Quality 84.336 .......... .......... 50,956 65,237 ........... 116,193 Education Dept. Ended in FY05
Enhancement--Arapaho
e CC.
Passed through the
University of Colorado:
English Language 84.195 .......... .......... 6,498 8,472 3,539 18,509 Education Dept. Continuing in
Acquisition--CO- FY07
TOP*ELA.
Migrant Education--CU 84.149 .......... 23,357 4,474 ........... ........... 27,831 ................. Ended in FY04
CAMP.
Passed through University
of Northern Colorado:
Disabilities......... 84.333 .......... .......... 27,545 31,868 11,326 70,739 Supplemental Ended in FY06
Instruct.
----------------------------------------------------------------------------
Total U.S. ....... 5,234,083 6,393,699 7,952,314 9,407,784 9,667,801 38,655,681 ................. .................
Department of
Education.
U.S. Department of Health and
Human Services:
Head Start Partnership... 93.600 176,105 171,404 140,233 91,260 147,400 726,402 Education Dept. Continuing in
FY07
Passed through Colorado
Department of Education:
Child Care & 93.575 24,389 7,656 23,219 30,496 29,460 115,220 Education Dept. Continuing in
Development Block FY07
Grant.
Passed through Weld
County Dept. of Social
Services:
Temporary Assistance 93.558 .......... .......... 47,033 206,617 8,113 261,763 Health Prog.-- Ended in FY06
for Needy Families. Bldg Lease
Passed through Weld
County Dept. of Social
Services--United Way:
Child Care & 93.575 .......... .......... 9,624 4,354 4,290 18,268 Education Dept. Continuing in
Development Block FY07
Grant.
Passed through Colorado
Department of Public
Health & Environment
Centers for Disease 93.283 .......... .......... .......... ........... 4,173 4,173 Welness Grant Ended in FY06
Control & Prevention.
----------------------------------------------------------------------------
Total Department of ....... 200,494 179,060 220,109 332,727 193,436 1,125,826 ................. .................
Health and Human
Services.
U.S. Department of Labor:
WIA Pilots, 17.261 .......... .......... .......... ........... 17,520 17,520 Ft. Lupton--Auto Continuing in
Demonstrations, & Prog. FY07
Research Projects.
Passed through Weld
County Division of Human
Services:
Employment Service... 17.207 .......... .......... .......... 22,486 32,514 55,000 C N A Program Ended in FY06
----------------------------------------------------------------------------
Total Department of ....... 0 0 0 22,486 50,034 72,520 ................. .................
Labor.
U.S. Department of
Agriculture:
Passed through Colorado
Dept. of Public Health
and Environment:
Child and Adult Care 10.558 .......... 17,674 22,303 20,698 19,484 80,159 MECEC Continuing in
Food Program. FY07
National Science Foundation:
Passed through Colorado
State Board of
Agriculture--CSU:
Northern Colorado 47.076 .......... 10,920 11,980 ........... ........... 22,900 ................. Ended in FY04
Community College/
University Teacher
Preparation
Initiative.
Exploring New 47.050 29,769 .......... .......... ........... ........... 29,769 ................. Ended in FY02
Frontiers in Spatial
Information
Management.
U.S. Department of Justice:
Passed through Weld
County Office of
Emergency Management:
State Homeland 16.007 .......... .......... 6,189 ........... ........... 6,189 Physical Plant Ended in FY04
Security Grant
Program.
U.S. Department of
Transportation:
Passed through Colorado
Department of
Transportation:
Building Highways/ 20.205 153,776 138,395 124,444 196,292 187,554 800,461 Continuing Ed Continuing in
Building Careers. FY07
U.S. Small Business
Administration:
Passed through Colorado
Office of Business
Development:
Small Business 59.037 37,792 39,812 35,015 37,226 36,294 186,139 Continuing Ed Continuing in
Development Center. FY07
-------------------------------------------------------------------------------------------------------------------
Total Federal Funds.......... ....... 5,655,914 6,779,560 8,372,354 10,017,213 10,154,603 40,979,644 ................. .................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chairman McKeon. Thank you very much.
Well, I really appreciate your testimony. I have chaired
the Subcommittee on Higher Education for almost the last 12
years. You can see how much financial aid has increased during
that time. I have had a big concern that students are
graduating from college with a mortgage and no house. Ten years
ago, they were graduating with an average loan of $8000. Now it
has gone up to about $18,000, and heading up. And a few years
ago, I introduced a bill, because of the concern I had for the
ever-increasing cost of education, and I had my head handed to
me because I was told that is cost controls.
But what seems to be happening is--and I know some people,
the schools say this is not so--but the more the Federal
financial aid goes up, the more tuition seems to go up. And I
know they say there's no correlation, but it is a big
coincidence that that seems to happen.
And so I have had a real concern about accessibility, about
affordability, and about accountability in higher education,
and that is what we really focused on and have been focusing
on, trying to get this reauthorized, the Higher Education Act,
and it seems like when I introduced that bill, there was a
little bit of a lowering but then we are right back up to ever-
increasing costs again, and even though we keep putting more
in, we have increased the Pell grant level. We have given a lot
more students Pell grants and we have increased other Federal
financial aid. The costs keep going up.
So I think it is a problem that the Federal Government, the
state government, parents, students, schools, everybody has to
come together, to work together on this problem, because we
need to do a better job of educating all of our population or
we are not going to be able to compete on the worldwide scope.
I took a congressional group to China last year and saw
what they are doing over there, and it is scary, and we need to
do all we can to be able to meet that competition.
Ms. Shaw, the Deficit Reduction Act has been referred to,
by some, as a raid on student aid. It seems like education
really shouldn't be a partisan issue; but it is. Back in
Washington, everything is partisan. And opponents have called
this a raid on student aid.
I would just like to ask you the question: Will students
receive any less aid after the Deficit Reduction Act than they
did before the Deficit Reduction Act?
Ms. Shaw. Mr. Chairman, I think the clear answer to that is
no. The HERA actually increased the amount of aid students and
families will receive. The two new grant programs alone are
going to provide $790 million in the first year and $4.5
billion over the 5 year period after that. The annual loan
increase has already been mentioned and the reduction in the
loan fees. The changes in the needs analysis formulas will
increase eligibility, especially grant eligibility to the
neediest of students and families. So the answer to that is no.
Chairman McKeon. Thank you. It is good to have that on the
record because that was my feeling, that was my understanding
when we worked on this bill, what we tried to accomplish. Also
when we increased aid in the first part, you know, the first 2
years, increasing aid, because we found that most students drop
out in the first 2 years.
Dr. Liddell, I spend a lot of time visiting schools. I
visit a lot of community colleges. In California, the average
age of the community college--we are not looking at, for the
most part, 18, 19-year-old kids. The average age is up into the
thirties.
How is it at your school?
Dr. Liddell. Oh, one of the statistics i didn't give you,
Mr. Chairman, was that about 20 percent, right under 20 percent
of our students are between 18 and 24. Our mean age for
students at Aims is now about 25. It's dropped a little over
the past four or 5 years, but we're right at 25. So you're
correct. Many of them have families as well.
Chairman McKeon. I think that is a good thing. We used to
title the subcommittee as Postsecondary Education, Training,
and Lifelong Learning. I thought that they made me Chairman
because it took me 30 years to get through college. But I think
it is important that people understand, the way our society is
operating now, you can't get a static education, whether it be
2 years, 4 years, or even a PhD, and then figure you are done
for life. Life is changing, situations are changing so rapidly,
that people are going to have to continue their education, and
community colleges seem to be one of the best places where they
can come back and pick up a class or pick up a degree that will
prepare them for a different job or a different career, because
their job or career has ended.
So you are really performing a vital service here, in
addition to giving a jump-start to students. I understand your
tuition for your community colleges here is not a lot lower
than for here, Northern Colorado, but in California the
community college tuition is much lower, and I know that 50
percent of students start at a community college, and that is
good, because for the most part it is less expensive, they can
stay at home, and they can go there and then move on to a
university for a further degree. So you are performing a great
service.
Dr. Liddell. Thank you.
Chairman McKeon. Ms. Musgrave.
Ms. Musgrave. Thank you, Mr. Chairman.
Ms. Shaw, you talked about the default rate and I believe
you addressed it over a 14-year period, how it had gone down
dramatically. Could you tell me what has taken place to cause
this shift.
Ms. Shaw. Actually, it is a number of things, and my
colleague, here, Ms. DeMuth, mentioned one of them. A critical
shift in emphasis on default prevention rather than default
collection, and all the participants in the programs, schools,
lenders, guaranty agencies, certainly the Department, all work
together, and have worked together, to shift that focus on
default prevention.
We have many outreach efforts like our student loan
repayment symposium, default prevention days. We have a
partnership on debt management with the National Council of
Higher Education, and there has been an incredible, and it is
required now, emphasis on entrance and exit counseling for
students, where when they are entering school, make sure they
understand their Federal student aid and what that means, and
as they are leaving school, they understand their obligation
with respect to repaying their loan debts.
In addition, there has been much better oversight, over the
years, by the Department, leading to the removal of quite a few
schools over the years. Since 1998, I believe it has been in
the neighborhood of a 1000 schools from the programs for
failure to comply with Title 4 regulations.
So it is a number of those things, and those things all
working together, that have led to the decrease.
Ms. Musgrave. Thank you very much.
Ms. DeMuth, are you aware of Colorado taxpayers are
currently funding the education of illegal immigrants? And what
are the documentation requirements that are needed to apply for
financial aid in Colorado?
Ms. DeMuth. I'm not aware that there are a significant
number of illegal immigrants that are receiving financial aid.
The programs that we run are the Federal programs. Under FFEL,
they are required to complete the FAFSA application process,
which goes through and documents their legal residency within
the United States.
As the previous panel discussed, in addition, the state
legislature recently passed Bill 1023, that puts additional
burden on us to verify that a student applying for the College
Opportunity Fund actually is a legal resident of the United
States, and we have implemented additional procedures, in
addition to the FAFSA process, to ensure that those students
are in fact legal residents.
Ms. Musgrave. I just would like to ask you, Dr. Liddell,
could you talk about the unique role that community colleges
play in expanding educational opportunities.
Dr. Liddell. I would be glad to do that. Community
colleges' mission, part of their mission, as I mentioned
earlier, is certainly open access. Its particularly strong draw
is for those students who might not be academically or
economically prepared to go on to a 4-year institution.
One of our great strengths, I believe, is flexibility in
programs. We are able to adapt and adopt curriculum at a much
faster pace than perhaps our 4-year colleagues are able to do,
and so some of the training that we provide for career and
technical programs is absolutely outstanding.
I would highlight, for example, Congresswoman, you
mentioned the nursing hearings you had not too long ago. That
is one of the very big strengths of community colleges.
For example, we have a nursing program where nurses who go
through a 2-year program can in fact sit for their RN after the
period of time. We like to send a lot of them over here to UNC,
and other places, to get their bachelor's and master's degree,
so that they can come back and teach for us, because that is a
huge issue.
But community colleges provide an absolutely wonderful
chance for those students who might not be prepared, in any
way, to go to university first, and also, as Mr. Chairman
mentioned earlier, a wonderful opportunity for adults who
perhaps are downsized or outsized, or their career track is no
longer there because of the changing dynamics of the labor
force, to come back to community college and have an
opportunity to get a whole new career.
Ms. Musgrave. Thank you very much.
Dr. Liddell. Thank you.
Ms. Musgrave. Thank you, Mr. Chairman.
Chairman McKeon. Thank you.
Our time is up. I want to thank you for your being here,
and for your comments, and we are going to, when we get back to
Washington, try to finish up the reauthorization that we have
been working on for 4 years.
I don't know if we are going to have the time to be able to
get it finished up. We passed the reauthorization in the House
but the Senate hasn't had time yet to get theirs done. So we
are running out of time for this session.
But it is very important that we get this done. Education
is so important, to be able to solve the problems, both the
individual's problems and the Nation's problems, and I commend
you for the work that you are doing to make this possible.
I want to commend you, Ms. Musgrave, for letting us come
here and holding this hearing, for arranging with the school. I
met with the president this morning, earlier, and she gave me a
little insight into the size of the school, $3800 a year
tuition. That is fantastic. They are doing a great job of
keeping the cost of education down. That is very important.
And I appreciate the leadership that you are providing,
both on the committee, and here, in your community, on
education.
With that, I would ask if you have anything further that
you would like to add for the record, that we will have the
record open for 14 days, and we would appreciate any other
comments you have, and encourage you to work closely with us as
we go through the full reauthorization process, whether it be
before the end of the year or early next year. We would
appreciate all the input that you have for us on that process.
With that, we will adjourn this hearing. Thank you.
[Whereupon, at 10:22 a.m., the committee was adjourned.]
[The prepared statement of the National Association for
College Admission Counseling follows:]
Prepared Statement of the National Association for College Admission
Counseling (NACAC)
On behalf of the National Association for College Admission
Counseling (NACAC), representing more than 9,000 college counseling and
admission professionals, this testimony is submitted regarding in-state
tuition for undocumented students. NACAC urges the committee to
recognize the success of in-state tuition programs in ten states across
the country, and urge immediate action on behalf of hundreds of
thousands of undocumented children and young adults who have been
effectively excluded from educational opportunity by an inconsistency
in federal law. The Senate's immigration reform bill (S 2611) includes
a legislative remedy (also known as the DREAM Act) that would allow
states to provide in-state tuition for qualified undocumented students.
Legislation sponsored by Congressman Lincoln Diaz-Balart (HR 5131)
provides the same remedy.
By holding hearings like the one in Greely, Colorado at this late
stage of the legislative process, the House of Representatives has
ensured that tens of thousands of students who have worked hard to
graduate from high school in 2006 will effectively have no educational
opportunity beyond high school. This lack of opportunity means real
financial and academic losses to the states in which these students
reside.
As counselors and admission officers, NACAC members regularly
encounter undocumented students who are prepared and willing to pursue
higher education, but are unable to do so because of legal and
financial barriers. These conditions represent a loss to the student,
the college or university where they would have attended, and
ultimately to American society.
As established by the Supreme Court decision in Plyer v. Doe
(1982), these children have broken no law and are entitled to
elementary and secondary education in this country. Provisions in S
2611, as well as the American Dream Act (HR 5131, sponsored by Rep.
Lincoln Diaz-Balart) would allow these students to pursue higher
education and become productive adults in the US workforce by providing
clear, legal paths to higher education and to citizenship.
The DREAM Act was conceived as a remedy for undocumented students
who have legally attended and graduated from high school in this
country, but for whom the law provided no clear paths to higher
education or citizenship. The DREAM Act has enjoyed bipartisan support
in the past, and similar legislation is in effect in ten states (CA,
IL, KS, NE, NM, NY, OK, TX, UT and WA), with successful results.
Passage of the DREAM Act as part of comprehensive immigration
reform or stand-alone legislation would mean real benefits to thousands
of students, the institutions they attend, the states in which they
live, and the country as a whole. The DREAM Act would:
Restore Authority to the States
The Supreme Court ruled in 1982 that undocumented minors are not
responsible for their immigration status and are therefore entitled to
elementary and secondary education. The DREAM Act would repeal a
federal law that discourages states from providing in-state tuition to
these students. This contradiction represents a wasted investment for
the states, who have educated these students through high school but
can't benefit from their tuition dollars or contributions to the
economy or tax revenue.
Increase Educated Workforce
Over 80% of the 23 million jobs that will be created in the next 10
years will require postsecondary education (ACE, 2004). Currently, only
36% of all 18-24 year olds are enrolled in postsecondary education
(NCES, 2004). Providing clear, legal paths to higher education,
citizenship and employment for undocumented students will have a
significant positive impact on the workforce of the future.
Additionally, research shows that a more educated workforce leads to
increased earnings (and subsequent increase in state and federal tax
return), lower crime and poverty rates, and fewer demands on public
assistance programs.
Improve Access to College
The DREAM Act would allow qualified undocumented students to be
eligible for in-state tuition in the states where they graduated high
school, providing they meet certain criteria, including national
service and pursuing legal status. Currently thousands of undocumented
students graduate from high school each year, many at the top of their
class, who are prepared for and interested in pursuing higher education
but cannot afford to do so. Because undocumented students are
ineligible for state or federal financial aid, allowing their
eligibility for in-state tuition would significantly improve college
access. Research shows that access to financial aid improves college
access for all students, from all socioeconomic backgrounds.
Eligibility for in-state tuition would be the only financial aid option
for undocumented students.
Increase Revenue for the States
Ten states have passed legislation similar to the DREAM Act, and
have not seen an influx of immigration, the displacement of other
students in higher education, or a drain on the education system, as
many critics have feared. The Texas Higher Education Coordinating Board
conducted a study of their undocumented student population after
enacting a law similar to the DREAM Act in 2001. The study showed a
significant increase in postsecondary enrollment of these students--
nearly 10 times greater from 2001 to 2004, with most enrolling at
community colleges. While the percentage undergraduate students in
Texas that are undocumented is small (although Texas has the second
largest population of undocumented individuals in the country), the
study still showed several thousand students paying tuition to state
institutions that would not have prior to the 2001 passage of the law.
NACAC members are disappointed that the House of Representatives
has chosen to hold field hearings rather than proceed with conference
on S 2611 and HR 4437, or with progress on The American Dream Act, HR
5131. While field hearings are going on, another graduating class of
qualified undocumented students is barred from giving back to the
American society in which they grew up; state institutions nationwide
will lose thousands in lost tuition dollars; and the American workforce
of the future is diminished.
NACAC urges Congress to proceed to conference with the Senate on
comprehensive immigration reform, and support the DREAM Act provisions
contained in S 2611. Please contact NACAC's director of public policy,
David Hawkins at [email protected] with any questions on college
access and the educational and economic benefits of the DREAM Act.