[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
BARRIERS TO EQUAL EDUCATIONAL
OPPORTUNITIES: ADDRESSING THE
RISING COSTS OF A COLLEGE EDUCATION
=======================================================================
HEARING
before the
COMMITTEE ON
EDUCATION AND LABOR
U.S. House of Representatives
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, NOVEMBER 1, 2007
__________
Serial No. 110-70
__________
Printed for the use of the Committee on Education and Labor
Available on the Internet:
http://www.gpoaccess.gov/congress/house/education/index.html
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COMMITTEE ON EDUCATION AND LABOR
GEORGE MILLER, California, Chairman
Dale E. Kildee, Michigan, Vice Howard P. ``Buck'' McKeon,
Chairman California,
Donald M. Payne, New Jersey Ranking Minority Member
Robert E. Andrews, New Jersey Thomas E. Petri, Wisconsin
Robert C. ``Bobby'' Scott, Virginia Peter Hoekstra, Michigan
Lynn C. Woolsey, California Michael N. Castle, Delaware
Ruben Hinojosa, Texas Mark E. Souder, Indiana
Carolyn McCarthy, New York Vernon J. Ehlers, Michigan
John F. Tierney, Massachusetts Judy Biggert, Illinois
Dennis J. Kucinich, Ohio Todd Russell Platts, Pennsylvania
David Wu, Oregon Ric Keller, Florida
Rush D. Holt, New Jersey Joe Wilson, South Carolina
Susan A. Davis, California John Kline, Minnesota
Danny K. Davis, Illinois Cathy McMorris Rodgers, Washington
Raul M. Grijalva, Arizona Kenny Marchant, Texas
Timothy H. Bishop, New York Tom Price, Georgia
Linda T. Sanchez, California Luis G. Fortuno, Puerto Rico
John P. Sarbanes, Maryland Charles W. Boustany, Jr.,
Joe Sestak, Pennsylvania Louisiana
David Loebsack, Iowa Virginia Foxx, North Carolina
Mazie Hirono, Hawaii John R. ``Randy'' Kuhl, Jr., New
Jason Altmire, Pennsylvania York
John A. Yarmuth, Kentucky Rob Bishop, Utah
Phil Hare, Illinois David Davis, Tennessee
Yvette D. Clarke, New York Timothy Walberg, Michigan
Joe Courtney, Connecticut Dean Heller, Nevada
Carol Shea-Porter, New Hampshire
Mark Zuckerman, Staff Director
Vic Klatt, Minority Staff Director
C O N T E N T S
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Page
Hearing held on November 1, 2007................................. 1
Statement of Members:
Altmire, Hon. Jason, a Representative in Congress from the
State of Pennsylvania, prepared statement of............... 69
McKeon, Hon. Howard P. ``Buck,'' Senior Republican Member,
Committee on Education and Labor, prepared statement of.... 69
Miller, Hon. George, Chairman, Committee on Education and
Labor...................................................... 1
Prepared statement of.................................... 2
Statement of Witnesses:
Alexander, F. King, president, California State University,
Long Beach................................................. 30
Prepared statement of.................................... 32
Bassett, Dr. John E., president, Clark University............ 10
Prepared statement of.................................... 12
Additional submissions:
``About Clark University''........................... 16
``Enhancing Affordability and Access in Independent
Higher Education''................................. 16
``U-CAN Media Coverage''............................. 27
Wellman, Jane V., executive director, Delta Project on
Postsecondary Costs, Productivity and Accountability....... 3
Prepared statement of.................................... 6
BARRIERS TO EQUAL EDUCATIONAL
OPPORTUNITIES: ADDRESSING THE
RISING COSTS OF A COLLEGE EDUCATION
----------
Thursday, November 1, 2007
U.S. House of Representatives
Committee on Education and Labor
Washington, DC
----------
The committee met, pursuant to call, at 11:01 a.m., in room
2175, Rayburn House Office Building, Hon. George Miller
[chairman of the committee] presiding.
Present: Representatives Miller, Kildee, Payne, Andrews,
Scott, Woolsey, Hinojosa, Tierney, Kucinich, Wu, Davis of
California, Bishop of New York, Sanchez, Sestak, Loebsack,
Altmire, Yarmuth, Hare, Clarke, Courtney, McKeon, Petri,
Castle, Ehlers, Platts, Keller, McMorris Rodgers, and Foxx.
Staff present: Tylease Alli, Hearing Clerk; Alfred Amado,
Legislative Fellow for Education; Jeff Appel, GAO Detailee;
Denise Forte, Director of Education Policy; Ruth Friedman,
Senior Education Policy Advisor (Early Childhood); Gabriella
Gomez, Senior Education Policy Advisor (Higher Education);
Lloyd Horwich, Policy Advisor for Subcommittee on Early
Childhood, Elementary and Secretary Education; Lamont Ivey,
Staff Assistant, Education; Thomas Kiley, Communications
Director; Danielle Lee, Press/Outreach Assistant; Ricardo
Martinez, Policy Advisor for Subcommittee on Higher Education,
Lifelong Learning and Competitiveness; Stephanie Moore, General
Counsel; Alex Nock, Deputy Staff Director; Joe Novotny, Chief
Clerk; Rachel Racusen, Deputy Communications Director; Julie
Radocchia, Education Policy Advisor; Dray Thorne, Senior
Systems Administrator; Margaret Young, Staff Assistant,
Education; Mark Zuckerman, Staff Director; Kathryn Bruns,
Minority Legislative Assistant; Amy Raaf Jones, Minority
Professional Staff Member; and Sally Stroup, Minority Deputy
Staff Director.
Chairman Miller [presiding]. The committee will come to
order for the purposes of conducting a hearing on Barriers to
Equal Educational Opportunities: Addressing the Rising Costs of
College Education.
We are going to be in a bit of a time jam here, and in the
name of trying to make this a coherent hearing, we have agreed
that we are going to forego our opening statements.
We all are in agreement on both sides of the aisle that
this is a priority for this committee on how we address both
paying for college and checking the best we can this rapid rise
in the cost of college. It has been a priority for Mr. McKeon,
for Mr. Tierney, for Mr. Keller, for Mr. Hinojosa and many
other members of the committee, but I think we would all be
best served by hearing from you first before the bells ring,
and then we will return after the votes are taken.
And, Ms. Wellman, we are going to begin with you, but I
have to tell people who you are here. So I will get that sorted
out. Maybe, Ms. Wellman, you want to tell people who you are.
Our first witness will be Jane Wellman who is the executive
director of the Delta Project on Postsecondary Costs and
Productivity and Accountability. The Delta Project is analyzing
college spending, seeking to document trends, identify and
promote best practices to help institutions improve
productivity.
Next, we will have Dr. John Bassett, who has served as
president of the Clark University in Worcester, Massachusetts,
since 2001. Before assuming that position at Clark University,
Dr. Bassett was the dean of the college of arts and sciences at
Case Western Reserve University and an English professor and
the department chair of North Carolina State University.
Is Ms. Sanchez here for purposes of introduction?
Ms. Sanchez. Thank you, Mr. Chairman, and I appreciate the
opportunity to allow me to introduce Dr. King Alexander.
Dr. Alexander is the current president of the California
State University at Long Beach, one of the largest 4-year
universities in California, and prior to his current post, Dr.
Alexander served as the president of Murray State University in
Kentucky. He is a foundation fellow at Harris Manchester
College, University of Oxford, and a faculty affiliate at both
the Cornell University Higher Education Research Institute and
the University of Illinois Institute of Government and Public
Affairs. He has over 15 years of experience in the field of
higher education and has co-edited several books and authored
numerous journal articles and book chapters. I am very pleased
that he is able to join us here today, since he is from my home
state and from very close to my district, and I am sure you
will find him as engaging as I do.
Chairman Miller. Thank you.
And welcome to all of you.
We are going to give you each 5 minutes to sort of
summarize your testimony. There will be a green light on, and
then there will be an orange light to warn you that you are
getting close to wrapping up, and then a red light, but we want
you to finish your thoughts and your sentences there.
So welcome again to the committee.
Ms. Wellman, we are going to begin with you. We need your
microphone on.
Prepared Statement of Hon. George Miller, Chairman, Committee on
Education and Labor
Good Morning.
Welcome to today's hearing on ``Barriers to Equal Educational
Opportunities: Addressing the Rising Costs of a College Education.''
New data just released by the College Board show what is by now an
all-too-familiar trend. In the last five years, tuition at four-year
public colleges nationwide soared by 31 percent, after inflation. And
whether a student attends a public college in-state or out-of-state, a
private college, or a two-year college, the bad news is that prices are
up across the board.
To help meet these rising costs, students are relying more than
ever on both federal and private student loans. Worse yet, each year as
many as 200,000 would-be students choose to delay or forego a college
education because they simply can't afford it.
These trends aren't just troubling for students and families, but
also for our country's future. Now more than ever, the strength of our
economy rests on our ability to produce a highly educated workforce.
Business leaders tell us that the most important thing we can do to
drive the innovation we need in today's global economy is to ensure
that all students have access to a good education.
One of the key priorities for this Congress has been to make
college more affordable and accessible for every qualified student who
wants to attend. Already this year, we took a truly historic step
towards this goal by enacting the College Cost Reduction and Access
Act. This law does more to help students and families pay for college
than any federal effort since the GI Bill of 1944. It provides more
than $20 billion in financial assistance to low-and middle-income
students and families over the next five years.
I believe this law will help lead our country in the right
direction by expanding college access--and doing so at no new cost to
taxpayers.
But there is still work to be done in order to ensure that no
student is prevented from going to college because of the price.
Increasing financial aid for students addresses one side of families'
ledgers; today we will address the other side--cost.
As we move closer to reauthorizing the Higher Education Act, one of
our goals will be to develop strategies to help colleges rein in
increases in costs.
It is clear that as consumers of higher education, students and
families need better information about college pricing, and the reasons
behind tuition increases from year to year.
As we examine how best to further address these rising costs, we
must learn more about how colleges and universities set their prices
and the factors that drive their various cost increases. We also must
learn more about how both schools and states spend their higher
education dollars and the relationships between college costs and
education quality. And we must look at the roles of federal, state, and
local governments in helping to keep college affordable.
Today we will hear about these different elements of the college
cost equation. We will also learn more about practices that are already
being used by some states and colleges to help keep college costs
manageable.
I want to thank all of our witnesses for joining us today for this
important discussion.
I also want to recognize two members of our committee, our Senior
Republican, Mr. McKeon, and one of our senior Democrats, Mr. Tierney,
who have put forth interesting proposals to address college costs.
Today's hearing will help us build on their efforts.
A college degree continues to be the gateway to joining the middle
class. I look forward to continuing the work of this Committee and of
this Congress to help ensure that all Americans have the opportunity to
go to college.
Thank you.
______
STATEMENT OF JANE V. WELLMAN, EXECUTIVE DIRECTOR, DELTA COST
PROJECT
Ms. Wellman. Thank you very much, Mr. Chairman, members. It
is a pleasure to be with you today.
I appreciate the opportunity to share my views and some of
the emerging work of the Delta Project on College Costs and
Productivity and Accountability.
I should say at the outset I come to this topic after
almost 30 years of work in higher education and public policy
in the State of California, where I worked in the University of
California and for the legislature for many years. With private
colleges, I worked with the Independent College Association
here in Washington, and then in nonprofit policy work for many
years.
And the topic of spending and how the money gets spent in
higher education as contrasted to tuition or financial aid or
revenues is the least well understood and analytically
documented and, in my view, one of the most important things
for us to collectively get our arms around, if we are to do a
better job of ensuring access and affordability. So that is the
reason for our work.
I just want to make three basic areas of comments today.
You have my prepared testimony. I will not read it, you will be
happy to know. But just in three areas: First, why focus on
this? What is the point? Secondly, a little bit about what the
data say about trends and patterns across all of postsecondary
education, and then I will finish with some comments on what
the federal role might be going forward.
First, the reason for the focus on costs is not an
analytical exercise in data gathering. We can do that, of
course, but the point is our country needs to increase
educational attainment levels and postsecondary educational
attainment levels by significant amounts, some say almost a
doubling of baccalaureate degree recipients in the next 15
years, both for workforce needs and to maintain internal
competitiveness. There is some dispute about whether the
numbers are doubling or only 30 percent. No matter how you
slice it, it is a huge increase.
And even if we are successful in reversing some of the
declines we have seen in state revenues and with the generous
funding from the federal government in recent financial aid
increases, it is hard to see how we are going to get that level
of increased attainment under our current finance and
production model, and this then raises the question of how can
we do a better job of using the resources we have and obtaining
greater attainment, and that means not sacrificing quality, not
sacrificing access to low-income students and building the
system we need.
So it is about attainment. It is not about picking apart
numbers. It is how do we use data to do a better job of getting
kids through making decisions about that.
The second point on the data and what the data say about
trends in revenues and expenditures in postsecondary education:
as you well know, we have a highly diverse system of higher
education, and the patterns of resources between research
universities, community colleges, privates, publics,
proprietaries are so starkly different that other than this
generalization, all other generalizations about spending in
higher education are wrong.
It is very important to look at the different sectors and
to see what the patterns are, and so in the testimony, I have
provided just some snapshots to give you a little bit of a
visual about what those revenue structures look like between
the public research universities, where their money comes from,
masters' associates, private research, private baccalaureate
institutions.
You will note none of the data in here speak to proprietary
education for the simple reason that the data on proprietary
schools is bad. It is getting better, but it is not good enough
to get an historic lens on. It should be included in these
numbers, and it is not.
The most important point I would like to make about the
data are on what is labeled Figure 3, and it shows a snapshot
of what has been happening in the last 6 or so years, and what
has been happening to tuition increases in contrast to
spending, and where the money is going in broad patterns by
types of institutions, and looking at these numbers, one begins
to see the differences between cost and how institutions spend
their money and price, what it is that is paid in the form of
tuition.
Just looking at the top line on this, by example, as a
national average level in public research universities since
1998, in state undergraduate sticker prices went up 40 percent,
an average of $2,200 roughly. Gross tuition revenues, the next
line over, only went up 31 percent. The difference between the
first column and the second column is largely what has been
happening in tuition discounting and institutional financial
aid. So looking at those two numbers helps you get a sense of
those patterns.
Moving over one more column, spending that goes to the
direct cost of instruction--this is the proportion of spending
within the institutions that is going into the classroom--
increased by only 4 percent. So you note the big difference, 40
percent tuition increase, spending increase, particularly that
went into the classroom, only a 4 percent increase in a 6-year
period.
Moving to the next column, you see full educational costs.
What that means is spending on students that are not in the
classroom, for instance, student services, academic support,
libraries, computing. You get a little bit of the sense of
where the money is going.
The last column, the biggest increase in public research
universities is attributable to research.
So this gives you a broad aggregate sense of what the
patterns have been in the last decade, prices going up in the
public sector much more rapidly than spending, absolute
spending reductions, as you see, over this period for public
masters' and community colleges, and the lowest rate of
increase going directly into the classroom in those sectors,
this despite double-digit tuition increases.
The pattern in private colleges is quite dramatically
different--private, nonprofit colleges. There, tuition
increases track spending much more closely, and you see
increases in private institutions, 20 percent tuition over this
period, $7,600 average; increase in tuition revenue, 23
percent; spending of instruction, up; spending elsewhere, up. I
will not belabor all of the rest of it.
But this gives you some sense of what has been happening
and the takeaways from it. The state funding constraints are
significant contributors to tuition increases in public sector.
Public sector tuitions are not going up because the
institutions are spending money at that rate. It is because of
a shift of cost shifting between state and tuition. Spending is
going up, and state spending is going up. It is just not going
up fast enough to keep pace with enrollment and inflation.
Private institutions are paying more, spending more, charging
more and spending more on the classroom.
I see I have the red light on. So I will skip over some of
the other points and conclude with just a couple of comments
about the federal role, and that is that I do not believe the
research supports the view that federal financial aid is
contributing in a significant way to increases in tuition.
There have been several studies done on that, and they all find
the same thing. Now one can argue that any revenue availability
contributes at some level to growing spending because if the
money is not there, it cannot be spent, and so I think one
could concede that without finding a direct causal relation
between federal financial aid.
I think the federal government has obviously a huge
interest in this topic, and in my way of thinking, at least two
very important roles that can be played. The first is on data
and analysis and public transparency about costs. The federal
government has the best cost data. The IPED system is
imperfect, but it is not that bad. The problem with it is that
it is opaque, it is not maintained, it is not edited, and it is
really only accessible to researchers who have time to get into
it and work with it a lot in order to make any sense of it, and
so the Spellings commission had a recommendation on that topic.
I have put that in your text. I think they got that right. I
think it is a matter of moving forward on it.
Secondly, I think the federal government----
Chairman Miller. I am going to ask you to wrap up, so we
can get to your colleagues' testimony.
Ms. Wellman. Okay. I will stop.
[The statement of Ms. Wellman follows:]
Prepared Statement of Jane V. Wellman, Executive Director, Delta
Project on Postsecondary Costs, Productivity and Accountability
Mr. Chairman and members, thank you for the opportunity to meet
with you today. I am delighted to be able to join you today, to share
my views about ways to tackle the college cost problem, based on the
emerging work of the Delta Project on Postsecondary Costs, Productivity
and Accountability. I want to focus my comments today on three issues:
1) the reasons for focusing on costs and productivity; 2) data trends
on spending patterns in postsecondary education, including the relation
between spending and tuition increases; and 3) the federal role in
tackling the root causes of cost increases in higher education.
Why the focus on costs? Because higher education in the United
States has a higher education productivity problem:
Our nation spends almost twice as much per student in
postsecondary education as other countries, yet we are behind in
graduation rates, and falling further behind as other countries are
increasing educational attainment and success. To be sure,
international comparisons do not always use similar measures; still
they raise the question about how the US system can use existing
resources to become more productive, to improve degree attainment
without sacrificing access or quality.
Persistent gaps in enrollment access, and degree and
certificate completion, among low income and minority populations
threaten future economic competitiveness. Our number one performance
challenge is to get more low income and minority students not just to,
but through, college. Managing prices and costs has to be part of that
equation, but we also need to do a better job of targeting resources in
ways that increase student success. Policymakers and higher education
leaders need to develop better ways of looking at spending and
performance and then using the data to put resources behind areas that
will increase student attainment.
Postsecondary education's dependence on annual increases
in revenues is putting higher education out of reach for many students
and making it difficult for the federal government and states to keep
pace with cost increases. Student tuitions are paying an increasing
share of general revenues in all institutions, and public skepticism is
rising about spending within higher education. Without greater public
accountability for spending, and attention to managing growth in
spending, policy makers will remain hesitant to support needed
increases in funding for higher education.
Trends in revenues and spending in higher education: where the money
comes from, where it goes, and the relation between spending
and tuition
There is no single answer to the higher education `cost problem'--
the issues in large urban community colleges bear almost no resemblance
to well-endowed selective private institutions--so generalizations are
risky. But we're not going to tackle spending problems without having
decent data about what those spending problems are. To do that, policy
makers and institutional leaders need better data about spending and
performance. The work of the Delta Cost project is designed to put
spending information into the public domain, through regular reports
about spending trends, and publicly accessible tools to give
institutions, policy leaders, and consumers easily accessible ways to
evaluate postsecondary spending patterns. We have recently a completed
the first comprehensive analysis of trends in revenues and spending in
this century. The work uses similar methodologies to the work done by
the Congressional Commission on Costs, and a follow-up study
commissioned by the National Center for Education Statistics (NCES) in
1998. Some highlights about what we have found:
Cost exceeds revenue from tuition. The cost of providing
students with a college education exceeds the revenue schools receive
from student tuitions. Figure 1 provides a snapshot of total revenues,
by source, for 2005 and shows that total revenues per FTE for public
research universities averaged a little over $40,000/student/year
compared to $16,700 for public masters' universities, and just over
$12,000 for public community colleges. This compares to $78,407 for
private non-profit research universities, $26,705 for private masters'
level universities, and $36,653 for private baccalaureate institutions.
However, not all revenues are available for general purposes and as
a result, the total volume of revenues mask resources spent on core
educational activities. Colleges and universities get and spend money
in areas that are ancillary to the educational teaching and basic
functions even if they contribute to the educational experience. They
are in the hotel business (residence halls), the restaurant business
(food services), the building business (capital outlay, and grounds and
buildings), the R&D business (organized research and community
service), and the health care business (hospitals and clinics).
Resources generated in these areas are fee-for service activities and
the funds are not available for general purposes. The three primary
sources of unrestricted revenues for both public and private
institutions are tuition revenues, public appropriations from state and
local government, and revenue from the combination of private gifts,
earnings from endowments, and investment income. Looking only at the
bottom three tiers of revenue on Figure 1 helps to show what those
resources are.
Spending and tuition. Switching from revenues to spending,
Figure 2 shows a snapshot comparing spending clustered into three broad
areas: spending that goes directly into the instructional function
(faculty salaries for teaching and departmental research); other
educational costs (student services, and the proportion of academic,
institutional and maintenance expenses that support instruction); and
all other spending (primarily organized research, and institutional
spending on scholarships).
figure 2: median educational and general (e&g) spending per fte by
carnegie group and control, 2005
Figure 3 shows the patterns of spending in relation to tuition
since 1998. Reading across the top line, you see the rate at which
sticker prices increased, followed by net revenue from tuition,
followed by spending in the three categories above (direct spending for
instruction, other educational costs, and other spending). These
numbers tell a good deal about the basic patterns. Total spending per
student has gone down after adjusting for inflation since 1998 among
public community colleges and masters' institutions, but is up slightly
in public research universities, and up by roughly two times the rate
of inflation among private non-profit institutions.
In all sectors, net revenue from tuition is going up less rapidly
than sticker prices, because of the growth in tuition discounting.
Among public institutions, spending for instruction has increased
relative to other categories in the research universities, but has
declined in public masters and community colleges. The patterns are
quite different among private institutions--where spending for
instruction increased significantly, but even so, less rapidly than
spending for other educational costs (advising, computing, and
administration).
State funding constraints and tuition increases. Adjusting
for enrollment increases and inflation, spending in public institutions
has not increased significantly in the last decade. Nonetheless,
tuitions have gone up by double digits. In public institutions, the
primary cause of tuition increases has been that state funds have not
kept pace with the combination of enrollment growth and inflation, even
states they have increased funding. The structural budget problems that
are squeezing higher education as a state funding priority are not
expected to go away any time soon. This is not a temporary problem;
it's a long term situation.
Private fund-raising not benefiting the bottom line.
Despite all the attention to fund-raising and capital campaigns,
private unrestricted funds (from gifts, income from endowments and
investment income) still comprise a very small proportion of revenues
in most institutions. The much touted ``privatization'' of finance in
higher education is really about increased reliance on student tuitions
as a general source of revenue. As a result, students increasingly
subsidize general institutional operations--including student aid
(paying for other students), administration, and research.
Growing inequality: the rich getting richer? Resource
disparities among different types of institutions are increasing, with
real cost cutting in public two- and four-year institutions, flat
spending in public research universities, and rising spending in
private institutions. The spending gap between public and private
institutions has never been larger. Competition between institutions is
intense, and competition fuels increases in spending believed to be
necessary to enroll the ``best'' students, and to recruit the top
faculty.
There is no evidence that explicit attention to increasing
productivity and controlling costs is a policy priority within
institutions or in states. Despite repeated calls (Congressional Cost
Commission; NACUBO Cost of Instruction Work; Spellings Commission) for
more `transparency' and better use of cost data within institutions,
most institutions do not publicly document costs, or include
information about spending and subsidies in public communications. A
recent AGB/NACUBO survey shows that governing boards generally see
little information about spending patterns; instead the focus is on
growing revenues and meeting the market for tuition. Spending
information is almost completely absent from state ``report cards,''
and on institutional web-sites offering consumer information. The focus
remains on tuition and financial aid, not on how money is spent.
The bottom line? The accusation that spending in higher
education is `out of control' isn't quite fair. Not all institutions
are spending more, despite the shift in revenue from state funds to
students. But it is clear that spending is going up in some sectors,
for the simple reason that it can. In all institutions, student
tuitions are paying a higher share of revenues, but these resources
aren't going into the classroom. The economic benefit from a college
degree has never been higher, and students and families will do
everything they can to get a college education. But there's no evidence
the resources are going to pay for student success or increasing degree
attainment, and low income students are most at risk. It's a funding
trajectory that bodes ill for the future, and will require an
unprecedented level of attention from policy makers and institutional
leaders if we're going to turn it around.
Suggestions about the federal role
The federal government clearly has an interest in increasing
productivity in higher education--both to maintain the value of federal
financial aid funds going to needy students, and to tackle the
challenges of increasing educational attainment for all students. There
are two areas where I believe interventions would make a difference:
one is in information and data; the other is in incentives to states
and institutions to do more to manage costs.
On the data front: We need to pay as much or more attention to
spending as we now do to fund-raising, tuition and financial aid.
Regular transparent reporting about cost trends can help this. Despite
imperfections, these NCES/IPEDS finance data are the best source for
this information. They need to be made more accessible to lay users--
through regular editing, routine publication, and an annual reporting
on trends. The recommendation in the Spellings Commission report on
this topic is right on from my perspective:
``The secretary of education should require the National Center for
Education Statistics to prepare timely annual public reports on college
revenues and expenditures, including analysis of the major changes from
year to year, at the sector and state level. Unlike the data currently
available, institutional comparisons should be user-friendly and not
require a sophisticated understanding of higher education finance.''
For incentives: history has shown that federal funding incentives
make a difference in moving states and institutions in new directions.
With a relatively modest investment of funds, the federal government
can provide incentives to states to ramp up their oversight capacity of
college spending, and to do more to tie increases in state
appropriations to evidence that institutions are investing resources in
improving student attainment. One model might be adopted from the
recent effort through the Fund for Improvement in Postsecondary
Education, working with the Association of American Colleges and
Universities, in partnership with the public four-year institutions, to
pilot innovations in student learning. Figuring out how that will work
will take some discussion, it's sure to be an idea that will be
controversial in some quarters. But it will take some serious
collective action to turn around the path we are on, to ensure that we
have a financing system capable of meeting our nation's needs now and
in the future.
Terminology
All revenue and expenditure data come from the Integrated
Postsecondary Education Data Surveys, special analysis developed by the
Delta Cost Project.
Auxiliary enterprises: revenue-generated activities, such as
dormitories and bookstores.
Direct instruction: spending going directly to pay for the
instruction; primarily faculty salaries and benefits, including adjunct
faculty, and costs of departmental staff. All credit and non-credit
bearing instruction (such as developmental education) are counted as
``instruction.''
Full cost per student: educational or student-related spending
other than instruction; such as student services, admissions and
registrars, and non-research portions of academic and institutional
support (administration), and operation and maintenance of the physical
plant.
Full education and general spending per student: all spending
including research, public service and student scholarships, but
excluding hospitals and clinics.
About the Delta Project on Postsecondary Costs, Productivity and
Accountability
The Delta Project is a non-profit policy and research organization
chartered in 2007 with the mission of helping to improve college
affordability by controlling costs and improving productivity. The
Delta Project is focused on the spending side of the college cost
problem--how institutional spending relates to access and success, and
ways that costs can be controlled without compromising quality. The
work is animated by the belief that college costs can be contained
without sacrificing access, or educational quality, through better use
of data to inform strategic decision making. Located in Washington,
D.C., project work is supported by Lumina Foundation for Education and
other national philanthropies as part of Making Opportunity Affordable,
a national initiative focused on increasing college opportunity and
success through increased productivity. This statement is the sole
responsibility of the Delta Project, and does not imply endorsement of
any partner organization or funding agency.
For more information: [email protected]; or http://
www.jff.org.
______
Chairman Miller. Thank you.
Mr. Bassett?
STATEMENT OF JOHN E. BASSETT, PRESIDENT, CLARK UNIVERSITY
Mr. Bassett. Thank you, Chairman Miller and Ranking Member
McKeon and the other members of the committee.
I appreciate the opportunity also to come and testify on
these very, very important issues, and I also want to thank the
committee for its work in increasing federal financial aid for
students and particularly for the recent increase in the Pell
grant. These are real questions about costs. There is no
question.
I am also testifying on behalf of the National Association
of Independent Colleges and Universities, or NAICU, which is an
association of over 1,000 private universities and colleges in
America.
But I have spent the majority of my life in the public
sector, with 14 years at Wayne State and 9 years at North
Carolina State, so I feel sensitive to the issues in both the
public and private sector.
I have been asked to focus this morning some of my time on
the issue of transparency, particularly since I was the one
that chaired the NAICU committee that developed the U-CAN
proposal, the University and College Accountability Network,
and the seeds of U-CAN actually lie in this committee, I think,
when Congressman McKeon and others began to ask questions about
the availability of information.
We were somewhat frustrated, too, because we know that high
school seniors and their parents are deluged with information
about colleges, and we know that we submit the IPEDS to the
government with, as you say, reams of paper with data, but
there was no way that a family could get in a concise user-
friendly format some comparable information in a concise manner
about size of schools, about tuition, about financial aid,
about emphasis of schools.
And out of that came the initiative of NAICU. We began with
focus groups made up of high school students and their parents
from diverse economic backgrounds and tried to develop a
compact, clear, concise user-friendly device with comparable
information, and that really is what U-CAN is.
Parents and students also wanted to know, ``What is it that
makes your school distinctive? What is it that makes you
special? What is different about your school as well?'' And so
what you have posted up there on the wall, but also in your
materials is--they have chosen my own university, Clark, as an
example--is a two-page Web site--concise, clear--providing
general information about things from tuition to financial aid
to geographical distribution to number of students who
graduated each year.
But then also there are 47 data elements there, 25 hot
links to things that are more specific about your college.
``What do you students do when they graduate? What kind of
careers do they go into? ``What kind of community service are
your students involved in?'' And Clark students, most of them,
are involved in the community, and so there is a whole page on
community service.
Since U-CAN was rolled out in the last week of September,
there are now over 700 colleges and universities that have
joined the U-CAN Web site. We have had over 70,000 hits, about
418,000 pages being used.
I think it is important to remember that this is only a
starting point, that students will begin to narrow down the
number of colleges they are really interested in at some point,
and then they ask much more focused personal questions. ``I am
interested in pre-med. What kind of biology program do you
have?'' ``I may want to play soccer while I am in college. Do
you have a soccer team?'' ``I am interested in being involved
in theater.'' ``What kind of accounting program do you have?''
There is no two-page insert that can cover all of that, but
this can help people know more about each specific college,
what it can do, what its majors are, what programs it has.
Still, we are left with some of the fundamental questions
about costs, and let me turn to those briefly because prices
are up. I looked at the Clark data. Our tuition between the
mid-1990s and the middle part of this decade went up about 59
percent. Our financial aid went up about 64 percent per student
in that same time period, which means we actually recouped less
than the tuition increases provided.
The main reasons for the great growth in tuition: costs--
utility costs, health care costs, technology costs, insurance
costs--and some of those went up well over 100 percent and the
others close to 100 percent at the same time period.
Higher education at its best, moreover, is very labor
intensive. It is still 20 students and a professor, 30 students
and a professor, 40 students and a professor. You do not have
the same kind of savings that you may have in certain kinds of
productivity, in manufacturing, for example, from technology.
Colleges are cutting costs. They are joining consortia.
They are outsourcing. They are saving on energy. They are
double-paning their windows. They are cutting the temperature
in classrooms. And you have a compendium attached with a lot of
what is happening in colleges.
I will be brief in finishing up. Every year, moreover,
colleges and universities also make cuts that they do not like
to make because they impact quality. They replace a professor
with part-timers and teaching assistants because they are
having a hard time making budget. They increase class size.
They cut library holdings. They cut counseling staff.
In the private sector, it is a very tight market that all
except the wealthiest universities are in. When we figure out
what our budget of expenditures will be and then figure out
what tuition increase a college can make, we will reach a
tipping point where a further increase in tuition will have a
negative impact on revenue. Those that cannot afford to pay
will not come, and those that are getting financial aid will
continue to get it.
I still believe the best solution to these problems is a
healthy partnership between colleges and universities, public
and private, and the government and the state governments
working together to get their arms around these issues.
Thank you.
[The statement of Mr. Bassett follows:]
Prepared Statement of Dr. John E. Bassett, President, Clark University
Chairman Miller, Ranking Member McKeon, and members of the
committee, I appreciate having the opportunity to testify today on the
critical issue of college access, cost and pricing. This is an
important topic and is one with which we all struggle. My name is John
Bassett, and I am president of Clark University.
I am testifying on behalf of the National Association of
Independent Colleges and Universities (NAICU), which represents more
than 1,000 private, non-profit institutions of higher education and
related associations. NAICU membership reflects the diversity of
private, non-profit higher education in the United States--including
traditional liberal arts colleges, major research universities, church-
and faith-related institutions, historically black colleges and
universities, women's colleges, performing and visual arts
institutions, two-year colleges, and schools of law, medicine,
engineering, business, and other professions.
I recognize that many members of the Committee have some very real
questions about why college costs so much--particularly in the private
sector. I hope this hearing will help us find answers to some of those
questions, and explore ways we might move forward, together, to ensure
that all Americans can afford to go to college.
First, I want to thank this committee for all you have done to fund
the student aid programs. We deeply appreciate the bipartisan support
this Committee has shown over many years for the federal student aid
programs. We especially welcome the infusion of new funding coming into
the Pell Grant program this year under Chairman Miller's leadership.
This increase will make an important difference, and we know that
finding the resources to fund these programs in the face of competing
budget pressures is a difficult task.
I was asked today to focus on one aspect of access to college--the
transparency issue. In particular, I have been asked to highlight a
recent effort by NAICU. Five weeks ago the association launched U-CAN--
the University and College Accountability Network--in response to the
call of public policy makers for more user-friendly information about
colleges. As the chairman of the NAICU task force that implemented this
idea, I am particularly excited about what we have accomplished in a
relatively short time, and on a comparatively modest budget.
The seeds for U-CAN came from this very committee. For years,
Representative McKeon has called for colleges to be more transparent
about our prices. His goal was to assure that consumers have better
access to simple, understandable information about the most important
financial aspects of college attendance--such as patterns of tuition
increases, the amount of available aid, typical student loan burdens,
and graduation rates.
As you know, we have not agreed with many of the cost-related
proposals coming from this committee. We have, however, shared your
frustration that mounds of potentially useful information sit largely
unused. Colleges expend considerable effort and resources in compiling
data for the federal government.
Several legislative proposals were laid out as a clear path for the
Department of Education to improve access to this kind of information
through their COOL website; but--with the exception of the recent
improvements made by the College Navigator--little action has been
taken. Certainly, there were no signs of activity when, in the spring
of 2006, we decided to attempt to develop a response to what we thought
was this Committee's vision for improved consumer information.
We began by asking focus groups of parents and high school students
to tell us what they most wanted to know about college. Their wish list
that was remarkably similar, but not identical, to the College Consumer
Profile that was included in this Committee's recent Reconciliation
bill, as well as in HR 609 from the last Congress. We also asked about
format, length, and style. We learned that consumers wanted something
that would be concise, consistent, comparable, and colorful. It needed
to be Web-based, so that they could quickly explore various colleges,
then drill down for more information in areas of special interest.
However, they also wanted to be able to print out information on a
college, then lay it on the dining room table and compare it with
similar information from other colleges.
The many end users we talked with were clearly more astute college
evaluators than we sometimes appreciate. They appropriately regarded
this kind of a consumer information tool as a starting point, not an
end point. In other words, they want to begin by comparing colleges on-
line, but ultimately want to refine their lists and make their
decisions based on visiting campus, speaking with informed counselors,
and weighing a college's strengths against their expectations. This is
a smart, cost-efficient approach, and one we applaud.
Interestingly, the focus groups also asked us for something beyond
comparable data. They asked us to find a way for colleges not only to
be compared, but for each college to tell how it differs from its peer
institutions--what, in the college's view, makes it special or
distinctive.
The product that resulted from this year-long exercise is a two-
page consumer profile that has a similar look and feel for each
college. There is a wealth of consistently-presented facts and figures
in those two pages. Beyond that, though, are brief blocks of narrative
and a series of click-on buttons that allows each college to tell its
story. One high school college counselor we talked with said, ``I like
to ask colleges that come in to visit me to tell me about the things
they are most proud about on their campuses. Tell me the programs, the
things that make you special. I want to know what they brag about,
because that tells me about who they are.'' A college's U-CAN profile
captures this kind of important qualitative information.
There is a rich array of information--and paths to additional
information--in the U-CAN profile as it was unveiled a few weeks ago.
There are a total of 47 comparable data elements provided. Beyond that,
however, there are 25 click-on buttons that link to various sections of
the college's Web site for additional details on areas of interest. The
links cover the wide range of information that families told us they
wanted to explore--everything from spiritual life to the surrounding
community to campus crime reports. Included are some links that
Congress is especially interested in as well, such as information on
transfer of credit. We do not seek to rank schools. Rather, we believe
that families should consider a wide range of institutions at a wide
range of prices, as well as the highly visible brand-name colleges and
universities. Such an approach is good for students, good for
competition, and good for this nation.
The U-CAN project is funded entirely from NAICU reserve funds.
Neither participating colleges nor consumers are charged a fee. We are
not seeking any federal funding, nor do we accept any advertising.
NAICU and the participating institutions consider this effort a public
service.
It has been an enormous undertaking to get this new tool developed
and launched in less than a year. However, more than 600 private
colleges had signed up to participate by the time we launched U-CAN on
September 26. We now have more than 700 schools signed up, and the list
continues to grow daily. This is a remarkable achievement when you
consider that the total number of colleges and universities that belong
to NAICU is 943 (we have an additional 65 association members).
Though only five weeks old, the U-CAN Web site, www.ucan-
network.org, has already become a busy gathering place for those
seeking college selection information. Over 400,000 pages have been
viewed so far by 60,000 visitors.
College-going students can find U-CAN on Facebook, YouTube, and
Wikipedia, as well as in Google search ads. We're also about to mail
information on the project to 2,700 high school guidance counselors,
and we're appearing on radio talk shows nationally--not just to promote
U-CAN but also to help consumers find and use other tools for an
informed college choice.
We are learning as we go. What you presently see on the Web site is
``U-CAN 1.0.'' We have a comprehensive feedback mechanism built into
the site, so that we can gather user comments on problems and
shortcomings, and can continue to improve our product in the coming
months
As proud as we are of U-CAN, we understand that this greater
transparency, while important, does not answer all your questions about
cost. Parents are increasingly anxious about how they will pay for
their children's education. We do hope that if they see how much aid is
available, and understand the range of pricing structures even just
within the private college sector, some of that anxiety will be
lessened. However, this committee has many legitimate policy questions
on price that I would also like to address.
At it simplest level, prices have gone up because our annual costs
have gone up, and because we are providing more services than ever. To
be very specific, let me lay out some of the principal cost drivers for
last year, as found in a survey of NAICU institutions. While this list
changes somewhat from year to year, there are some cost drivers--such
as health insurance and financial aid--that have perennially appeared
on such a list for the past decade.
From 1994-95 to 2004-05, grant aid provided by private
colleges increased 150 percent, more than twice the rate of tuition (71
percent).
Since 2005, the price of utilities has risen 27 percent,
according to the Commonfund Institute. This is almost triple the
average annual increase over the previous four years.
The median increase for health care costs at colleges was
9 percent in 2005-06, according to the College and University Personnel
Association.
In recent years, annual premiums for many types of
insurance, including general liability, property, and worker's
compensation, have commonly increased by double-digit rates. Experts
expect property insurance to increase between 10 to 50 percent in 2006,
according to the Chronicle of Higher Education.
Periodicals and other library materials routinely increase
by double-digit rates each year. The Association of Research Libraries
reports that between 1986 and 2004, research library expenditures for
scholarly journals increased 273 percent.
Next, let me tell you some of the ways institutions are organizing
to counteract the effect of these rising costs, including innovative
affordability and cost-cutting initiatives. There is, however, no
single approach, because of differences in institutions' mission,
student population, and fiscal resources.
To control operating expenses, institutions are:
Entering into consortial arrangements to reduce
administrative and academic redundancies, and leverage their purchasing
power to obtain lower costs for energy, insurance, information
technology, and other services.
Outsourcing campus services, such as grounds and
facilities maintenance, alumni relations operations, residence hall
management, billing and other back-office functions, and bookstores.
Turning to environmentally friendly systems to lower
energy consumption; streamlining staff; and consolidating offices and
programs to enhance efficiency.
Increasing the revenue they receive through non-tuition
sources, including philanthropic giving, and the selling and renting
out of underused campus-owned facilities and properties.
A compendium of college affordability, cost-saving, and consortial
initiatives is posted on the NAICU Web site and is also attached to
this testimony.
Further, many of the state associations affiliated with NAICU are
deeply engaged in collaborative efforts. Representative Petri has been
particularly engaged in helping one of our most innovative and active
states--Wisconsin--on their model statewide efforts to reduce costs.
But other states are also undertaking similar efforts. In fact, a
number of private college state associations have made such progress in
this area that they have formed a separate non-profit called the
Coalition for College Cost Savings to promote the power of collective
action to drive better bargains on the cost of services at private
colleges. Although this is not a NAICU initiative, it is a related
response by the private college sector to the concerns of Congress.
As many members of this Committee know, independent colleges
believe that the best solutions to college access challenges come
through our working in partnership with the federal government. We have
opposed, and will continue to oppose, measures that we believe
represent inappropriate restrictions on our ability to secure the
revenues we need to maintain our financial security and improve our
educational offerings--or any policy measures that threaten our ability
to fulfill our distinctive missions. When Congress invests in the
traditional student aid programs, it makes a real difference for our
students. Indeed, welcoming students from all income levels to our
campuses is not just something we want to be able to do--it is at the
very heart of who we are.
In this regard, we also want to address a grave misperception that
exists in some public policy arenas today. Time and again we have heard
the argument that somehow the federal investment in student aid drives
up college prices. Exhaustive research has conclusively shown that this
is not the case. Still, the misperception persists, so let me try today
to put it in simpler business terms.
When a low-income student arrives at our door, with the tuition
glass partially full because of federal aid, it is less expensive for
us to fill that cup. If it costs us less money to enroll that student,
then there is less upward pressure on our student aid budget, and
ultimately on our tuition.
Formal research bears this out. For more than a decade, researchers
have sought to determine whether a causal relationship exists between
increases in federal student aid and increases in tuition. The
conclusion reached is that there is no analytical evidence to support
the existence of such a linkage. You have authorized several studies at
the Department of Education on this question, and those findings have
clearly indicated this not to be the case.
One of the most authoritative studies on the topic was the 2001
Department of Education report, ``Study of College Costs and Prices,
1988-89 to 1997-98,'' which investigated whether federal or state
student financial aid led directly to tuition increases. The study, and
I quote, ``found no associations between * * * federal grants, state
grants and student loans and changes in tuition.''
Then in 2003, the Department of Education prepared a summary of
research related to higher education financing, ``Congressionally
Mandated Studies of College Costs and Prices.'' That document
highlights information from four major studies. While the studies
address the issue of college pricing from several angles, together they
clearly demonstrate the depth of research on this topic--with no
evidence that federal student aid is impacting college prices.
Mr. Chairman and Members of this Committee, thank you for this
opportunity to give you an overview of U-CAN. I also want to assure you
that we are hard at work to contain costs. We would welcome a further,
national conversation about this matter, through which we look for
constructive solutions that do not reduce innovation or educational
quality. Finally, I want you to know how much we appreciate the
continuous support you have all shown for the federal student aid
program.
______
[Additional submissions by Dr. Bassett follow:]
------
Enhancing Affordability and Access in Independent Higher Education
Price and Cost-Control Initiatives at America's Private Colleges and
Universities
national association of independent colleges and universities
Enhancing Affordability--Replacing Loans with Grants; Reducing Expected
Student and Family Contributions
Over the past decade, private institutions have made themselves
more accessible and affordable to students of modest means through
unprecedented investments in their institutional grant programs. They
have retooled institutional needs analysis formulas to reduce expected
student and family contributions, lowered work expectations, and
replaced loans with grants.
Amherst College, Amherst, MA
Amherst will replace all loans with scholarships in its financial
aid packages beginning in the 2008-09 academic year. The policy will
eliminate loans for all students. It will affect incoming students in
the Class of 2012 and current students. In 1999, Amherst eliminated
loans for low-income students.
Baylor University, Waco, TX
Baylor has increased grant aid and the percent of the need covered
by institutional scholarships, and reduced student loan expectations.
Brown University, Providence, RI
Beginning with the class of 2003, students who qualify for
institutional aid receive larger grants and smaller loans. It gives
students with the greatest financial need approximately $17,000 in
additional grant aid over four years. All students can now apply 100
percent of any outside grants toward the self-help portion of their
financial aid packages, reducing loan or campus work expectations.
Centenary College of Louisiana, Shreveport, LA
Centenary offers the Centenary Affordability Program (CAP), which
is open to all parents who qualify for a federal PLUS loan. For the
four years their child is enrolled at Centenary, the college will pay
the interest on annual loans of up to $15,000. A fixed rate payment
option and four years of interest-free borrowing result in fast
principal reduction. CAP can be combined with other financial aid for
which a student may qualify.
Columbia University, New York, NY
Beginning in 2007-08, Columbia will eliminate the debt burden on
students whose families earn less than $50,000 per year, replacing
loans with grants. In 2007, an alumnus pledged $400 million, all
designated for financial aid. It came a year after Columbia announced a
$4 billion fundraising campaign to build an endowment for financial aid
and faculty development.
Davidson College, Davidson, NC
Beginning in 2007-08, Davidson will eliminate loans from financial
aid packages. Students will have their demonstrated financial need
funded entirely through grants and student employment, and graduate
debt-free. The policy applies to both incoming and upper class
students. In 2006-07, Davidson capped student loans at $3,000 per year,
increasing grants by whatever amount it reduced loans.
Emory University, Atlanta, GA
Beginning in 2007-08, Emory will replace need-based loans with
grants for students whose parents earn $50,000 or less. Students whose
families earn between $50,001 and $100,000 won't have to take out more
than $15,000 in loans over a four-year period. Emory will pay the rest.
Gannon University, Erie, PA
Gannon matches the state grants of eligible students from New York
and Ohio.
Harvard University, Cambridge, MA
Since 2006-07, parents in families with incomes of less than
$60,000 are no longer expected to contribute to the cost of their
children attending Harvard. Harvard also reduced the contributions of
families with incomes between $60,000 and $80,000. The new thresholds
build on those announced two years ago, with eliminated expected
contributions for families with incomes below $40,000, and reduced
contributions for families with incomes between $40,000 and $60,000.
The number of students enrolled at Harvard from these income brackets
increased by 24 percent for the class entering fall 2005--the first
full year of the program.
John Carroll University, University Heights, OH
John Carroll makes it possible for families making under $40,000 to
enroll their incoming freshman tuition-free, effective for the 2007-08
academic year. Once federal and state aid eligibility is determined,
John Carroll scholarship and grant aid will be awarded to cover the
remainder of the cost, up to full tuition and fees.
Lyon College, Batesville, AR
Students transferring to Lyon from two local community colleges,
who come with the dean's recommendation and a 3.0 grade point average,
will receive a scholarship that, combined with state and federal
assistance, allow those living at home to complete their junior and
senior years at a cost comparable to attending the two year
institution.
Massachusetts Institute of Technology, Cambridge, MA
Since 2006-07, MIT has matched students' Pell Grants, up to their
maximum amount. Earlier, MIT revised its financial aid package to
replace $2,000 in loans or work-study with grants for all students.
Princeton University, Princeton, NJ
Princeton no longer requires undergraduates on financial aid to
obtain loans, providing grants instead. In addition, the summer
earnings expectation for financial-aid students was reduced, with the
largest reductions for students from lower-income families. The amount
that students are expected to contribute from their own savings was
also reduced. Princeton's calculation of expected parental
contributions has been reduced by removing home equity from
consideration (or giving an equivalent renter's allowance to those who
don't own homes, but have other investments). As a result of these
improvements, the portion of tuition covered by the average grant for a
freshman aid student rose from 65 percent in 1997, to 90 percent in
2006.
Schreiner University, Kerrville, TX
Schreiner pays the interest on federal Plus loans taken out by
parents.
Stanford University, Stanford, CA
Since 2006-07, families with annual incomes of less than $45,000
have not been expected to contribute to the cost of tuition at
Stanford, and the requirements for families earning $45,000 to $65,000
have been cut in half. In 2007, Stanford increased need-based financial
aid by 15.2 percent, to $76 million annually, to assist students from
middle-income families and reduce the sum parents are expected to
contribute. It reduced the amount of home equity it assesses when
calculating need, capping the amount at 1.5 times family income. An
allowance is also made for renters. It also reduced the amount middle-
income students are expected to borrow during the school year to $2,000
from $3,500. Both of these reductions will be offset by increased
scholarship funds for students.
University of Pennsylvania, Philadelphia, PA
Since 2006-07, Penn replaces loans with grants for students of
families earning less than $50,000. As a result, the highest-need
students will each receive grant aid of more than $45,000 in 2006-07.
The move coincides with a $6.3 million increase in Penn's undergraduate
financial aid budget for the coming academic year, with those funds
targeted to middle- and low-income students. In 2005-06, the university
reduced the summer savings requirement and increased allowances for
incidental expenses for students from low-income backgrounds.
Williams College, Williamstown, MA
Several times in recent years Williams College has reduced what it
expects students to borrow and has made up the difference with
increased grant aid. Students in the lowest income bracket now have no
loans at all. The next bracket borrows a cumulative total of $3,800 at
graduation. The highest loan expectation is a cumulative total of
$13,900 at graduation.
Enhancing Affordability: Tuition Cuts
Tuition cuts have been a small but growing trend over the past
decade. In the five past years, a dozen have cut their list price. To
date, one institution has cut tuition for 2007-08.
International College, Ft. Myers/Naples, FL
Cut tuition by 20 percent.
The following reduced tuition in 2006-07.
Alliant International University, San Diego, CA
Cut tuition by 26 percent.
Regions University, Montgomery, AL
Cut tuition 42 percent.
Enhancing Affordability: Tuition Freezes
One-time tuition freezes keep an institution's list price at the
previous year's level. These universities will not increase tuition for
2007-08.
Beacon College, Leesburg, FL
Freed-Hardeman University, Henderson, TN
Harrisburg University of Science and Technology,
Harrisburg, PA
Philander Smith College, Little Rock, AR
Princeton University, Princeton, NJ
Rollins College, Winter Park, FL
Rust College, Holly Springs, MS
Enhancing Affordability: Tuition Guarantees
A growing number of private institutions offer four- or five-year
tuition guarantees to freshmen. Tuition will not increase for the years
they are enrolled. These programs give families peace of mind that
their tuition won't increase by unexpected amounts, and allow them to
more easily budget. These colleges and universities include, but aren't
limited to, the following.
Baylor University, Waco, TX
Capitol College, Laurel, MD
Concordia University, River Forest, IL
George Washington University, Washington, DC
Hardin-Simmons University, Abilene, TX
Hiram College, Hiram, OH
Hiwassee College, Madisonville, TN
Merrimack College, North Andover, MA
Northwestern College, Orange City, IA
Ouachita Baptist University, Arkadelphia, AR
University of Charleston, Charleston, WV
Enhancing Affordability: Partnerships with Community Colleges and High
Schools
Private institutions are giving community college and high school
students opportunities to earn credits at reduced prices and to ``test
the waters'' before enrolling. Many institutions partner with local
two-year colleges to offer joint degree programs that lower overall
costs for students.
Benedictine University, Lisle, IL
Students with an associate's degree from one local community
college are able to earn a bachelor's degree from Benedictine through
an on-site program at the two-year institution. Tuition is half what
the students would pay if they enrolled as adult nursing students at
the Benedictine. The university is exploring similar partnerships with
two other community colleges.
Gannon University, Erie, PA
Gannon has dual enrollment programs with local and regional high
schools where qualified high school students can take college courses
and earn college credit while they are still in high school.
Hiwassee College, Madisonville, TN
Hiwassee, a two-year institution, provides dual enrollment courses
for high school juniors and seniors in surrounding counties. The
program essentially provides collegiate course work for students with
no out-of-pocket expense.
Lyon College, Batesville, AR
Students at two nearby community colleges may take one course a
semester at Lyon while paying their community college's rate, allowing
them to ``test the waters'' before transferring. In addition, Lyon
students may take a course each semester at these institutions,
allowing Lyon to save the cost of creating courses that are already
locally available and meet the college's academic standard.
Schreiner University, Kerrville, TX
Schreiner provides at no cost to qualified area high school seniors
access to one course to promote higher education as an option, and give
them the opportunity to explore the college classroom before committing
to enroll. The university has also developed articulation agreements
with nearby community colleges.
Walsh College, Troy, MI
Walsh gives students the opportunity to complete three college
degrees within a total of five years. The program offers a seamless
transfer from an associate's in business program at two local community
colleges into the bachelor's, and then master's business programs at
Walsh. This shortens total degree completion time by as much as one
year, with 87 hours offered at community college rates.
Enhancing Affordability: Accelerated Degree Programs
Private institutions nationwide offer accelerated degree programs.
These programs get students out into the workforce earning a salary
earlier, and saving on their tuition, room, and board costs.
Adelphi University, Garden City, NY
Adelphi offers a five-year combined bachelor's and master's
teachers program, as well as accelerated joint-degree programs
combining undergraduate liberal arts with professional studies
(dentistry, engineering, environmental studies, law, optometry, and
physical therapy), in conjunction with six other public and private
institutions.
Albertus Magnus College, New Haven, CT
Albertus Magnus College offers both undergraduate and graduate
accelerated programs. Tuition for these programs is approximately half
of tuition for traditional day programs.
College of Notre Dame of Maryland, Baltimore, MD
The College of Notre Dame offers Accelerated College, a program in
business and nursing for working women and men. Once a student enters
an accelerated college cohort, tuition will remain the same for that
cohort until graduation.
Gannon University, Erie, PA
Gannon offers accelerated joint-degree programs in law, pharmacy,
osteopathic medicine, podiatry, physical therapy, and other fields with
three other institutions.
Hiram College, Hiram, OH
In 2006, Hiram added an accelerated biomedical humanities program,
which prepares students to take the MCAT or GRE exams at the end of
their second year, and to enter medical school or graduate school after
three years.
Judson College, Marion, AL
Judson allows students to graduate with bachelor's degree in two
years, ten months, saving time and money.
Mount St. Mary's University, Emmitsburg, MD
Mount St. Mary's offers accelerated undergraduate and graduate
degree programs, including several for returning adult students.
Tuition for the undergraduate accelerated program is less than half
that of the traditional program.
Nichols College, Dudley, MA
Nichols offers an accelerated joint bachelor's and master's of
business administration program in on-site and online formats, both of
which cost less than the traditional programs.
Peirce College, Philadelphia, PA
Peirce allows adult learners to earn an associate degree in half
the usual time.
Saint Joseph College, West Hartford, CT
Saint Joseph offers seamless undergraduate/graduate degree programs
that allow students to earn baccalaureate and master's degrees in five
years in biology, chemistry, and psychology/counseling. The college
also offers an accelerated degree program in nursing.
Seattle University, Seattle, WA
Matteo Ricci College at Seattle University is the three-year
university phase of a program that integrates high school and
university level studies. It allows students to complete their high
school and university education in six or seven years, rather than the
traditional eight.
Waldorf College, Forest City, IA
Waldorf offers all its bachelor's degree programs in a three-year
format.
Enhancing Affordability: Four-Year Graduation Guarantees
These guarantees ensure that students at private colleges and
universities graduate in four years. They avoid an additional year of
tuition payments and get graduates into the workforce sooner than most
of their peers at public universities. Institutions that don't deliver
on the promise for a student who follows university guidelines and
stays on track, will provide the remaining classes at no cost.
Augsburg College, Minneapolis, MN
Centre College, Danfield, KY
DePauw University, Greencastle, IN
Doane College, Crete, NE
Dominican University of California, San Rafael, CA
Milwaukee School of Engineering, Milwaukee, WI
Muskingum College, New Concord, OH
Pace University, New York, NY
Regis University, Denver, CO
University of the Pacific, Stockton, CA
Enhancing Affordability: Job Guarantees
Job guarantees for new graduates keep institutions accountable for
the quality of education provided, and assure students that their
financial investment is worthwhile.
College Misericordia, Dallas, PA
College Misericordia offers a guaranteed placement program that
ensures graduates of a paid internship in their fields if, six months
after graduation, they do not have a job in their fields or have not
been admitted to graduate school.
Manchester College, North Manchester, IN
Students who have not secured a job within six months of graduation
may take additional undergraduate courses free of charge for one year
to help prepare for employment.
Milwaukee School of Engineering, Milwaukee, WI
Undergraduate course may be repeated at no cost within three years
of graduation if the graduate or his/her employer believes job
performance will be enhanced.
Newbury College, Brookline, MA
Students who graduate with a bachelor's degree and at least a 3.0
grade point average, may take up to 10 courses at Newbury free of
charge, if they are not employed after six months.
Robert Morris College, Chicago, IL
The 180-Day Guarantee offers associate degree students additional
free education if they are unemployed within 180 days of graduation.
Enhancing Affordability: Work Colleges
Work colleges blend liberal learning and applied studies into the
undergraduate curriculum. Every student is required to work on campus
or in the community. In return, partial or full tuition is covered by
the institution. Five of these institutions are listed below. For more
information, visit www.workcolleges.org.
Alice Lloyd College, Pippa Passes, KY
Every full-time student is required to work as a part of his or her
overall educational experience, helping to significantly defray the
cost of attendance. Tuition at Alice Lloyd is guaranteed to students
residing in 108 central Appalachian counties in parts of five states.
Berea College, Berea, KY
Every admitted to Berea is awarded the equivalent of a four-year,
full tuition scholarship. All students are required to work at least 10
hours a week in campus and service jobs.
Blackburn College, Carlinville, IL
Every student works a minimum of 160 hours a semester, keeping the
cost of attendance low.
College of the Ozarks, Point Lookout, MO
No full time student at College of the Ozarks pays a penny of
tuition. Students work 15 hours a week during the regular school year,
plus two 40-hour weeks during holiday periods, to help offset the costs
of their education.
Deep Springs College, Deep Springs, CA
Each student attends for two years and receives a full scholarship
valued at over $50,000 per year. Students work at least 20 hours a week
on the campus and accompanying ranch.
Controlling Costs: Outsourcing; Streamlining Staff; Integrating
Information Technology; Employee Incentives to Cut Costs
Private colleges and universities are launching--and expanding--
innovative initiatives, and adopting business practices to control
operating costs, enhance efficiency, and give students a high quality
education at the lowest price possible. These include outsourcing
services, targeting cost reductions, implementing new information
technology for administrative functions, and streamlining staff while
safeguarding quality.
Clark University, Worcester, MA
Clark has launched initiatives in strategic fuel purchasing,
computerized energy co-generation and management, which have resulted
in a 33-percent annual savings. Clark practices ``enterprise''
budgeting, which treats certain parts of the university as self-
contained businesses.
Columbia College Chicago, Chicago, IL
Columbia College Chicago has a financial incentive program that
rewards faculty and staff who save money by eliminating processes and
procedures without harming student services or outcomes. Recipients are
given a financial award equal to one-third of the cost savings, up to
$2,000.
Denison University, Granville, OH
The university's personnel committee now requires that any growth
in staff size be approved only if it can be accomplished without
creating any additional burden to the student body. The increase must
be funded by either non-student revenue or by a tradeoff with an
existing expense.
Emory University, Atlanta, GA
Emory has consolidated departments and is collaborating with
regional institutions to purchase commonly used supplies. It is
eliminating contractor redundancy by combining contracts with major
vendors for lower prices, and pursuing smaller vendors for greater
discounts.
Flagler College, St. Augustine, FL
To enhance efficiency, Flagler requires faculty to teach at least
five courses or 300 credit hours each semester; has replaced permanent
tenure with rolling one- to three-year contracts; and increased the use
of part-time adjunct faculty.
Georgetown College, Georgetown, KY
Georgetown College outsources much of its alumni relations
operations, including the production of alumni publications, management
of alumni events, and development of an alumni website.
Massachusetts Institute of Technology, Cambridge, MA
MIT launched a re-engineering project to close the gap between the
institute's income and its expenses. MIT has consolidated suppliers and
steamlined facilities operations.
McKendree College, Lebanon, IL
To serve students more cost effectively, the McKendree restructured
its administrative staff. Without reducing the quality or degree of
service to students, several staff positions were closed.
Spartanburg Methodist College, Spartanburg, SC
Spartanburg reorganized its administrative structure, replacing six
academic departments with four academic divisions. The new structure
also reduced the number of administrators reporting to the vice
president for academic affairs, enhancing efficiency.
Stetson University, DeLand, FL
Stetson has reduced administrative costs through program
consolidation and new computer applications. It replaced the chief
academic officer with a dean's council, giving the deans of arts and
sciences, business, and music direct responsibilities for institutional
planning.
Union University, Jackson, TN
Union University has outsourced several of its operations,
including bookstore, facilities, grounds, and housekeeping. Through
careful budget monitoring, it has taken steps to reduce hiring.
University of Notre Dame, Notre Dame, IN
Notre Dame has re-bid and streamlined administration of benefit
plans; implemented campus-wide budget reductions; enhanced procurement
processes; outsourced the cashier's office; and implemented incentive
plans to encourage departments to improve expense management.
Controlling Costs: Cost Savings through Environmentally-Friendly
Systems
Private colleges and universities are moving quickly to implement
and expand environmentally-friendly systems that reduce energy
consumption and result in significant cost savings.
Adelphi University, Garden City, NY
Adelphi installed a geo-thermal heating system in 2003 for its new
residence hall and reduced the building's projected consumption by 30
percent. The university cuts back 400 kilowatts of power on high demand
days in exchange for payment from its energy supply company.
Illinois College, Jacksonville, IL
To reduce energy costs well into the future, Illinois College
opened a resident hall in 2006 that emphasizes state-of-the-art
strategies for sustainable site development, water savings, energy
efficiency, materials selection, and indoor environmental quality.
Juniata College, Marion, AL
Juniata buried cool-water lines at all the main buildings to reduce
the electrical load for air conditioners, making it more cost efficient
to cool buildings. The college has created a LEED-certified classroom/
multipurpose building that uses recycled materials, natural heating and
cooling systems, composting toilets and a variety of other systems to
reduce the environmental footprint and cut down on energy consumption.
Juniata installed new boilers that can be switched between natural gas
and heating oil, allowing the college to save money by locking in long-
term supplies at reduced costs.
Park University, Parkville, MO
Park has had significant savings by building classroom and office
space underground, including saving more than 50 percent on the
construction cost of new distance learning facilities. Park also reaps
ongoing savings through lower operating and utility costs.
Princeton University, Princeton, NJ
Princeton has implemented an electricity supply load management
system that predicts electricity demand on an hourly basis, compares
demand to pricing, and allows Princeton to use major equipment when
energy costs are lowest; this system saved about $2 million in the 2006
fiscal year. Princeton also produces chilled water when costs are
lowest, stores this chilled water until it is needed, and has been
recommissioning heating and cooling systems to original or improved
designed standards for additional savings.
University of Evansville, Evansville, IN
The University of Evansville produces approximately half of its own
electricity with a guaranteed savings of at least $400,000 annually
over the next 15 years.
University of Scranton, Scranton, PA
During summer 2005, the University of Scranton implemented a water
conservation project that will save the university nearly $100,000 a
year and conserve more than 10 million gallons of water consumption.
The savings from reduced water consumption, sewer taxes, and thermal
energy for water heating are estimated at about $95,000 per year.
Wilson College, Chambersburg, PA
Vegetable oil from Wilson College's 100-acre, on-campus, organic
farm, is recycled into biodiesel fuel for the farm's equipment, and
waste products from the dining hall and equestrian center are used as
compost for the fields.
Controlling Costs: Student Employment Initiatives
A growing number of institutions are giving students an opportunity
for paid on-hands work experience related to their field of study.
Colleges save on the higher costs of full-time, permanent employees.
See also Work Colleges, page 7.
Juniata College, Marion, AL
Juniata's entire information tech support operation is run by its
students. Student managers direct budgets, hire (and fire) student
employees, and take on R & D assignments for new software or products.
Marquette University, Milwaukee, WI
To save costs, Marquette supplements its finance staff by hiring
student accounting interns who apply classroom knowledge while
providing a needed university service.
Rhodes College, Memphis, TN
Since 2004, students compete for jobs as ``student associates'' in
areas related to their academic field of study. Rhodes pays the
students staff wages, while reaping the savings of assigning only
fractional positions, and the students gain valuable training and
experience. With 60 students involved, Rhodes has already seen cost
containment almost triple in the third year of the program. The
positions solve departmental needs at a fraction of the cost and gave
resulted in improved services, extended programming, and greater
student satisfaction.
Controlling Costs: Regional and Metropolitan Consortial Arrangements
Increasingly, private colleges and universities in a common
metropolitan area or region are working together to cut operating costs
while improving quality. These multi-institution alliances allow
colleges to leverage joint purchasing power for lower costs on energy,
insurance, and information technology; reduce administrative and
academic redundancies; offer students new learning opportunities and
better services; and share best practices.
Associated Colleges of Central Kansas, McPherson, KS
ACCK's consortial activities collectively save participating
campuses an estimated $1.2 million each year. It provides
administrative computing services and selected academic programs from a
central location; an undergraduate major in special education, and
upper-level coursework in several disciplines. ACCK offers a health
insurance pool; Internet access through a single vendor; daily courier
service; and a Blackboard server used by faculty at the member
institutions.
Colleges of the Fenway, Boston, MA
Six neighboring institutions in Boston formed the Colleges of the
Fenway consortium to share courses, programs, and services, while
retaining their individual names, missions, and independence. The
consortium offer cross registration of students and collaborate on
master planning and information technology. It offers temp services and
advertising contracts; and teams together to hold admissions and
marketing events.
Five Colleges, Inc., Amherst, MA
Five Colleges, Inc., a consortium of five private and public
institutions, promotes long-term education and administrative resource
sharing. Members make joint appointments in areas such as risk
management and recycling; jointly recruit for admissions; conduct joint
management training; and have a cooperative purchasing agreement that
allows the institutions to jointly save $1 million each year. The
colleges have common academic calendars; offer a joint automated
library system and online course catalog; share several academic
departments; and make joint faculty appointments.
Independent College Enterprise, Charleston, WV
The Independent College Enterprise is a collaborative effort
between seven Virginia, West Virginia, and Massachusetts institutions
to share all of their administrative computing services. ICE owns and
operates the hardware and software that support the financial
management, human resource, financial aid, admissions, alumni,
development, and student records processes for all seven schools.
Lehigh Valley Association of Independent Colleges,
Bethlehem, PA
LVAIC's collaborative purchasing programs have generated
substantial cost savings, giving smaller institutions better pricing,
and access to higher quality products and services. It handles $60
million in group purchasing of products and services. Seven other
regional colleges, universities, and private secondary institutions
have joined LVAIC's six member institutions in these programs.
Southeastern Pennsylvania Consortium for Higher Education,
Glenside, PA
The eight private colleges and universities that make up SEPCHE
share administrative services; a common calendar among groups of
colleges to facilitate co-curricular and curricular activities; cross-
registration and transfer processes; and collaborative student
activities. They jointly hire faculty and staff in mutually beneficial
areas, develop new academic programs, and provide faculty development.
Controlling Costs: Statewide Consortial Arrangements
State associations of private colleges and universities are
innovating and expanding collaborative initiatives that cut operating
costs while improving quality. These statewide alliances allow colleges
to leverage joint purchasing power for lower costs on energy,
insurance, and information technology; reduce administrative and
academic redundancies; offer students new learning opportunities and
better services; and share best practices.
Association of Independent Colleges and Universities in New
Jersey, Summit, NJ
AICUNJ provides New Jersey's 14 independent colleges and
universities consortial purchasing for communications, energy,
insurance, computer software, equipment financing, mattresses and
travel, and employment benefits such as temporary and long term
disability benefits plans. Collaborative professional development
workshops also help keep costs down.
Association of Independent Colleges and Universities of
Pennsylvania, Harrisburg, PA
AICUP member institutions participate in several joint purchasing
agreements, including licensing for major Microsoft products, with an
average cost savings of 60 percent to 70 percent; repair and
maintenance contracts, with an estimated overall cost reduction of 10
to 30 percent; local and long distance phone service; Internet access;
natural gas; electricity; bond financing, with an overall savings of
$1.5 million in insurance expenses; and worker's comp and auto
insurance.
Connecticut Conference of Independent Colleges, West
Hartford, CT
CCIC has a multi-pronged administrative collaboration effort that
is focused on group purchasing, shared services and the development of
new markets. Members have access to shared staff training and contracts
for various products including legal online music downloading, internet
security tools, personal security options, parcel delivery, bottled
water, conference calling, and news clipping services. Other services
include student health insurance, workers compensation insurance,
internal audit services, an annual risk management conference, and
collaborative emergency planning. Work groups meet on a regular basis
to explore options, expand services and share best practices.
Council of Independent Colleges in Virginia, Bedford, VA
CICV is involved in several collaborative business programs,
including a volume discount program for long-distance telephone service
and a discounted Microsoft Campus Agreement. CICV is also engaged in
extensive collaborative efforts to recruit students for member
institutions.
Independent Colleges and Universities of Florida,
Tallahassee, FL
ICUF sponsors the Independent Colleges and Universities Risk
Management Association that offer property, liability, workers
compensation, and auto insurance. This group will soon add pooled
coverage for property, casualty, workers compensation, auto, pollution,
e-commerce, and a number of other products. ICUF provides its 28
members with self-insured medical benefits; maintains a purchasing
arrangement with UPS, Dell, and Siemens; and offers a statewide
Microsoft Campus Agreement.
Maryland Independent Colleges and Universities Association,
Annapolis, MD
MICUA offers collaborative purchasing programs its 18 member
colleges, including student, property and casualty, group life, and
long-term disability insurance; and student tuition payment plans.
Ohio Foundation of Independent Colleges, Columbus, OH
OFIC's 35 member colleges share technology hardware, software, and
expertise; software licensing; faculty development and teacher
education programs in technology use; consultative referral service in
health and property and casualty insurance solutions; and consultative
referral services in energy management solutions. OFIC also provides
collaborative programs in minority student recruitment and retention.
Oregon Independent Colleges Association, Portland, OR
On behalf of its 17 member institutions, OICA has initiated and
sustains volume purchasing programs for all voice and data
telecommunications; multiple lines of software and hardware; a self-
insured workers compensation benefit trust; a self-insured employee
health benefits trust; moving vans; public notices; and management
training. Annual savings are estimated at $3 million to $5 million.
Students at OICA member institutions can also cross-register, without
cost, at other schools to complete required courses not offered in a
given term at their home campus.
Tennessee Independent Colleges and Universities
Association, Nashville, TN
TICUA offers its 35 members a self-funded health insurance program;
and has its own procurement program that offers discounts with over 30
vendors, ranging from computer software to electrical services. TICUA
partners with its sister organizations in Kentucky and Florida to offer
Tuition First and Independent Colleges and Universities Risk Management
Association, respectively, to its members.
Wisconsin Association of Independent Colleges and
Universities, Madison, WI
The WAICU Collaboration Project is a comprehensive initiative to
perform all administrative support (back office) functions of
Wisconsin's 20 private colleges and universities. According to the most
recent statistics, WAICU reduced members' costs in 2005 by more than $5
million--a 58 percent increase in savings from 2004. The effort, now
halfway through its implementation process, includes joint
administration of health plans, a study abroad consortium, professional
development for faculty and departmental chairs, collection services,
background checks, and a student health plan, which is being adopted in
other colleges and universities outside of Wisconsin. The congressional
report The College Cost Crisis called the WAICU project
``transformative.''
Controlling Costs: National Consortial Arrangements
These consortial efforts allow institutions from around the nation
to pool resources to control costs and improve services.
Association of Jesuit Colleges and Universities,
Washington, DC
Twenty-one AJCU member institutions provide a collaborative virtual
reference service, which allows participating colleges to extend
standard hours of operation by distributing the staffing of the service
across multiple libraries and multiple time zones. Online reference
librarian assistance is offered 24 hours a day, seven days a week.
Coalition for College Cost Savings, Nashville, TN
CCCS helps small to medium sized independent institutions in 16
states enhance efficiency through joint procurement agreements for
several services and products. Joint contracts for comprehensive asset
management programs and employee long-term care insurance will be
offered.
Controlling Costs: Non-Tuition Revenue Sources
To help reduce the pressure of rising costs on tuition, private
institutions are generating and expanding alternative revenue streams.
Augustana College, Rock Island, IL
Augustana launched a capital campaign with the goal of endowing $50
million in need based scholarships.
Hampton University, Hampton, VA
Hampton uses income and interest from real estate and other
investments to fund approximately $4million in scholarships for
students each year.
Loyola University Chicago, Chicago, IL
Loyola University Chicago converted the first floor of a college
owned building in Chicago to commercial retail rental property, and has
leased university-owned land for 99 years in exchange for annual rental
income of $2 million plus cost of living increases each year and 36,000
square feet of education space.
Martin Methodist College, Pulaski, TN
MMC has encouraged alumni to use the new, but temporary, federal
IRA charitable rollover provision to establish scholarship endowments.
Nichols College, Dudley, MA
Nichols' facilities are rented out in the summer at 100 percent
capacity to help offset costs.
Price and Cost Transparency
To keep prospective and enrolled students, their families, and
policymakers informed on the cost of attendance, major campus
expenditures, and budget priorities, private colleges are better
communicating consumer and institutional financial information.
Drake University, Des Moines, IA
Drake posts audited financial statements on the web, distributes
letters and e-mails explaining tuition increases, holds town meetings
on the budget, and e-mails financial updates to the campus community.
Emory University, Atlanta, GA
Emory posts its financial statements online.
Gannon University, Erie, PA
Gannon's president sends an annual letter to all students,
undergraduates and parents explaining not only the rationale for
tuition increases, but outlining the new projects, facilities
renovations, and faculty support.
Hiram College, Hiram, OH
Hiram outlines typical costs to prospective students and families
through a number of ways, including providing financial scenarios on
its website and in recruitment materials.
Princeton University, Princeton, NJ
Princeton established the first institution-specific financial aid
calculator, which allows any family to go online and get a
confidential, detailed estimate of how much aid they would receive and
what they would pay for a Princeton education.
______
U-CAN Media Coverage
Before and after its launch, U-CAN has generated considerable
national attention. What follows is a list of national, regional, and
trade stories that have reported on the initiative.
Bergen County, N.J., Record (October 27, 2007)
A new resource for comparing private colleges (syndicated column)
Chicago Tribune (October 24, 2007)
Private colleges fighting back with their own guide
Norfolk, Va., Virginian-Pilot (October 21, 2007)
Career Connection (no web link available)
Asbury Park Press (October 19, 2007)
New Web sites aid college search
Tampa Tribune (October 8, 2007)
Database Has Score On Private Colleges
Westchester, N.Y., Journal News (October 6, 2007)
Need to Pick a College?
Fort Worth Star-Telegram (October 6, 2007)
Private College Resource
Reading Eagle (October 4, 2007)
High marks are given to new Web site on college selection
Philadelphia Inquirer (October 4, 2007)
Rethinking college rankings (opinion piece)
Tampa Bay Business Journal (October 3, 2007)
Eckerd College joins new college ranking system
Carlisle Sentinel (October 1, 2007)
Private colleges offer data
WPTZ.com (October 1, 2007)
Four Private Colleges Join Web-Based List
University Business (October 2007)
Changing Student Demographics
Burlington Free Press (September 30, 2007)
Four Vermont colleges join consumer information network
Allentown Morning Call (September 30, 2007)
U-CAN helps students and their parents choose the `right' college
or university (editorial)
San Antonio Express-News (September 29, 2007)
Comment: College comparison is now made easy
Baltimore Business Journal (September 28, 2007)
Shop for Maryland colleges online
Newport News Daily Press (September 28, 2007)
Online service quickly compares private colleges
Lansing State Journal (September 28, 2007)
Need to pick a college? Headline online
Chicago Tribune (September 27, 2007)
Private colleges get a bit of a boost
Seattle Post Intelligencer (September 27, 2007)
New web site makes picking college easier
Cedar Rapids Gazette (September 27, 2007)
National Web site offers admissions info for 600 colleges (no web
link available)
Greenville News (September 27, 2007)
College comparison Web site unveiled
Wilkes-Barre Citizens Voice (September 27, 2007)
New web site brings private colleges to the public
Columbia Daily Tribune (September 27, 2007)
Colleges launch site to rival U.S. News school rankings
Albany Times Union (September 27, 2007)
Colleges unveil own database
Northwest Indiana Times (September 27, 2007)
U-CAN look it up
Wilkes-Barre Times Leader (September 27, 2007)
Local schools on new online database
Allentown Morning Call (September 27, 2007)
College profile Web site unveiled
Asbury Park Press (September 27, 2007)
Need to pick a college? New Web sites can help
Watertown Daily News (September 27, 2007)
Two schools like new college-guide index
Chambersburg Public Opinion (September 27, 2007)
Wilson joins effort to make comparisons of colleges easier
BusinessWeek (September 26, 2007)
A new tool for the college bound
Inside Higher Ed (September 26, 2007)
Accountability and the Applicant
Chronicle of Higher Education (September 26, 2007)
Information, Please: As One Consumer Database Debuts, Higher-
Education Leaders Ponder Another
Abilene, Texas, Reporter-News (September 26, 2007)
Local universities seek new national ratings
USA Today (September 25, 2007)
Need to pick a college? New websites can help
St. Paul Pioneer Press (September 25, 2007)
New web site to smooth college quest
Chronicle of Higher Education (September 25, 2007)
College Comparison Web Site Debuts
Education Week (September 10, 2007)
Colleges Build Web Sites to Enable Campus Comparisons, Sans Ranks
St. Louis Post-Dispatch (September 9, 2007)
College Rankings: Is it rank, or a rank?
Minneapolis Star Tribune (September 5, 2007)
Colleges are changing the rankings game (editorial)
Chronicle of Higher Education (September 4, 2007)
The `U.S. News' Rankings Roll On
San Antonio Express-News (August 31, 2007)
Compare college rankings to reality (opinion piece)
Kerrville, TX, Daily Times (August 21, 2007)
Schreiner University makes U.S. News list
Cleveland Plain Dealer (August 21, 2007)
College ranks and college angst (opinion piece)
San Antonio Express-News (August 20, 2007)
Use college rankings with a grain of salt (editorial)
Carlisle Sentinel (August 19, 2007)
Dickinson president serves on panel challenging college rankings
Time Magazine (August 18, 2007)
Much Ado About College Rankings
Baltimore Examiner (August 18, 2007)
College presidents developing alternative to U.S. News rankings
Greenville News (August 17, 2007)
Clemson, Furman move up in magazine rankings
Washington Post (August 17, 2007)
U.S. News's College Rankings Face Competition and Criticism
Omaha World-Herald (August 17, 2007)
Colleges promote alternative to ranking
Minneapolis-St. Paul, Star-Tribune (August 17, 2007)
Colleges increasingly avoiding `Best' label
San Antonio Express-News (August 17, 2007)
Colleges call `elitist' list distorting; magazine defends it as
useful tool
York, Neb., News-Times (August 16, 2007)
Better information for a better college choice (opinion piece)
St. Petersburg, Fla., Times (August 6, 2007)
Do your homework on college rankings (editorial)
Waterbury, Conn., Republican-American (August 3, 2007)
College Dropouts
Sioux Falls, SD, Argus Leader (July 25, 2007)
College guide: Useful or irrelevant?
Macon, Ga., Telegraph (July 23, 2007)
Wesleyan boycotts college rankings
Bloomberg News (July 23, 2007)
Williams, Amherst Won't Fight System
Indianapolis Business Journal (July 21, 2007)
Some Indiana Colleges Revolt Against Survey
Christian Science Monitor (July 19, 2007)
A better way to rank America's colleges
Columbus Dispatch (July 14, 2007)
Magazine's college rankings done poorly
Lynchburg, Va., News & Advance (July 10, 2007)
Sweet Briar boycotting U.S. News and World Report rankings
Burlington, Vt., Free Press (July 10, 2007)
College rankings rile some schools
Richmond Times-Dispatch (July 7, 2007)
Colleges question U.S. News rankings
New York Times (July 4, 2007)
Colleges Join Forces on a Web Presence to Let Prospective Students
Research and Compare
Cincinnati Enquirer (July 2, 2007)
Ranking the college rankings (editorial)
Spartanburg, S.C., Herald Journal (July 1, 2007)
Converse, Wofford balk at taking part in U.S. News survey
Chronicle of Higher Education (June 26, 2007)
Private-Colleges Group Proposes Template to Foster Comparisons of
Members
Inside Higher Ed (June 26, 2007)
Campus Accountability Proposals Evolve
Philadelphia Inquirer (June 24, 2007)
U.S. News' College Rankings Overrated (editorial)
U.S. News & World Report (June 22, 2007)
About the Annapolis Group's Statement (column)
Cleveland Plain Dealer (June 21, 2007)
Liberal arts schools protest U.S. News survey
Time (June 20, 2007)
A Better Way to Rank Colleges?
CNN (June 20, 2007)
Many American colleges balk at U.S. News rankings
USA Today (June 20, 2007)
Some colleges may opt out of rankings
Inside Higher Ed (June 20, 2007)
More Momentum Against `U.S. News'
Chronicle of Higher Education (June 20, 2007)
Annapolis Group Challenges `U.S. News' Rankings
Allentown, Pa., Morning Call (June 20, 2007)
3 local colleges join others in bucking U.S. News rankings
New York Times (June 20, 2007)
Some Colleges To Drop Out Of Rankings By Magazine
Bloomberg News (June 19, 2007)
More Colleges Plan to Snub Annual U.S. News Ranking
______
Chairman Miller. Thank you.
Mr. Alexander?
STATEMENT OF KING ALEXANDER, PRESIDENT, CALIFORNIA STATE
UNIVERSITY AT LONG BEACH
Mr. Alexander. Thank you Chairman Miller and members of the
committee for this opportunity to share my thoughts with you
about the rising college costs, public accountability and, I
also want to point out, equal opportunity.
I am president of a university of 37,000 strong, but I am
here representing the largest university system in the United
States of 450,000 students, and we are the most diverse system
in the United States where 54 percent of our students come from
underrepresented backgrounds and 40 percent of those students
are Pell grant eligible students, roughly first-generation
students seeking college attainment and attendance.
I am also representing many of the public universities who
do what we do throughout the United States. Our tuition and
fees this year will reach $3,164, roughly half the national
public university average, and we do a very good job at keeping
our fees low. The CSU System is roughly at about $3,400 or
about half of the national public university average. We grew
by 1,400 students alone just in our institution, in the CSU
group by 25,000 new students just between last year and this
year.
I am here to talk to you about two issues: accountability
and transparency, which we welcome, we welcome with open arms.
I am also here to thank the committee for the work that they
did 4 years ago when we first started talking about the concept
of net tuition and exposing net tuition and real differences
between net tuition and sticker pricing as well as making sure
parents have better information, and I will hit this a little
bit later.
Accountability and transparency first, it is the first
issue, and we certainly commend the efforts and support all the
work that you are doing. We also, NASULGC and the American
Association of State Colleges and Universities, will unveil our
volunteer system of accountability this month. This makes
actually 12 pages of data and information about student
learning, as well as the type of colleges that they are
attending, volunteer service opportunities, lots of
information, lots more information available to students and
parents, and this will be unveiled this month through a NASULGC
as well as ASCU to the nation. This represents all public 4-
year sectors in higher education.
I would like to point out that the CSU does not want to
stop there. We also have taken this opportunity to add our own
CSU VSA, and if you turn to my testimony, you will see a chart.
That chart highlights some of the things that we want the
public to know. These are things we want our taxpayers to know,
that we want our policymakers to know: average student loan
debt versus national averages, percentage of students leaving
in debt, net tuition of the average family that may attend, not
an awarded student, but just an average family so they have an
idea of what they may pay to attend our institution.
In addition to that, we think it is absolutely vital that
we measure and calculate economic diversity in our
institutions. So, when we take into account graduation rates,
we also take first into account the types of students that we
are serving within our institutions.
As I mentioned, we have 40 percent first-generation Pell
grant-eligible students, and we would like these issues raised
and we would like these issues accounted for by those
institutions who remain public in mission and who remain public
in practice in the type of students that they serve around the
United States.
I would also like to focus on the issue of college costs,
state appropriations and the maintenance of state funding
efforts. The biggest issue, as Ms. Wellman pointed out, for us
is the abdication of state governments in their roles and
responsibilities to provide universal access for all of our
students to public higher education.
Roughly 80 percent of our students are in the public
sector. We are highly contingent and reliant on what the states
do for us. We greatly appreciate the financial aid that you
helped by putting into the system to help offset many of these
cuts, but, in many cases, it does not allow us to keep pace
with the cuts that we have had to endure.
When states step to the plate, as California did 2 years
ago, we also stepped to the place and we did not increase our
tuition and fees one single dime 2 years ago when the state
came through and helped offset the enrollment growth numbers
and the enrollment growth cost escalation that we experienced
through fixed-cost growth.
When our state steps to the plate, we do not raise tuition
nearly to the degree that we do when our states remove
themselves from these fiscal responsibilities. That is why I
think it is imperative to do two things.
First of all, when we follow these college costs issues,
that we must also follow dollars, not percentages. The
universities out there with the lowest dollar rates are often
generally the institutions who, when they increase, increase
their rates by the highest percentages. Now former Chairman
McKeon took this into account by incorporating the $500, I
think, exemption which helps many of our institutions who have
fought hard to keep costs low and who will continue to fight
hard to keep costs low.
But the most important issue that I think we need to
address as a federal government, and we need to address as
higher education is how can we use the leverage of the federal
government to maintain, to make sure that state governments do
not remove themselves from these important responsibilities. We
have done this in Medicaid. We have done this in Title 1 for
public schools. Yet we are any easy cut. We are the first
organization or first institution cut when states need to make
budget cuts, and this comes at a time when higher education has
never been more important to this nation and never been more
important to society.
By incorporating state maintenance of effort, provisions in
new legislation that protect states and ensure that states keep
up to their responsibilities to ensure that states like
California, North Carolina, Texas, West Virginia are rewarded
for having high tax effort in support of keeping costs low is
very important for this nation. To not address this issue, I
think you will see most states continue to slide in the
direction that many states have done throughout the New England
area, as well as Ohio, and many states that have not funded
higher education very well in the last two decades.
This is my greatest concern, and I think it is the greatest
crisis that we address, is the formation of a federal
partnership between the federal government and states to
maintain state levels current or increasing levels of state
appropriations for their public institutions of higher
education.
Thank you.
[The statement of Mr. Alexander follows:]
Prepared Statement of F. King Alexander, President, California State
University, Long Beach
Thank you Mr. Chairman and members of the Committee for this
opportunity to share with you some of my thoughts regarding the
important national issue of rising college costs, public accountability
and equal opportunity.
I am president of California State University, Long Beach which is
the nation's 24th largest university with an enrollment of 37,000
students. We take great pride in providing high quality educational
opportunities at costs that are less than half of the national public
university average. We are pleased that we serve so many students who
come to us from first generation college families and diverse
populations. Currently, approximately one third of our students are
Pell Grant eligible and nearly 65% are African-American, Asian-
American, Hispanic, and of other ethnic origins. With the support of
the American Association of State Colleges and Universities and our
California State University Chancellor, Dr. Charles Reed, I am here
today representing AASCU and the CSU System, the largest university
system in the nation which currently serves 450,000 students. Fifty-
four percent of our students in the California State University System
are from underrepresented, minority, and diverse backgrounds.
Before making my comments, I want to thank the members of the
Committee for the progress that has been made over the last four years.
Nearly four years ago in a hearing before the House Education and
Workforce Committee on 21st Century Competitiveness, I remember
stressing to the former Chairman and others a number of important
issues including the introduction of the ``net tuition'' concept which
has since been taken very seriously by this Committee. You have also
acted to address the critical issue that we raised regarding dangers of
simply monitoring percentage growth without considering actual dollar
increases which substantially disadvantages those colleges and
universities that have worked hard to keep costs low. Too, I made the
point then and I repeat now that by simply making new reporting
requirements instead of developing new policy strategies to provide
incentives for institutional effectiveness in addressing real public
needs, we are missing a crucial opportunity to reform the current
system of higher education.
On these important points, I would like to focus my comments this
afternoon and address two distinct areas, both of which have
significant ramifications for collegiate costs and equal opportunity;
(1) Accountability and transparency; and (2) college costs, state
appropriations and ``maintenance of state tax effort.'' In each of
these areas I will attempt to describe the existing problems and then
offer policy recommendations that, in my view, would help remedy some
of the primary concerns of taxpayers and policy-makers.
1. Improving Accountability and Transparency
We commend and support the efforts of this Committee to require
that higher education become more transparent and accountable to
students, parents, and taxpayers. The marketplace for education or any
market cannot function effectively or efficiently without adequate
information. California State University, Long Beach and the CSU System
have taken these legislative and public concerns very seriously and
created the most transparent and accountable measurement system in the
nation. This system is known as the California State University
Voluntary System of Accountability (CSU VSA) which augments the soon to
be released national public university Voluntary System of
Accountability (VSA). The CSU VSA is an important addition to the
national VSA and adds numerous measurement categories designed to
indicate the role that the twenty-three public universities in the CSU
are playing when addressing a series of ``Public Good'' domains. This
information will be made available for policymakers and taxpayers
throughout California and the nation in addition to the institution-
specific information resulting from the national VSA. While the
national public university VSA was developed primarily to address
student and parental concerns regarding the lack of substantive
institutional student learning information, the CSU VSA was developed
to address additional concerns that are of value to the general public
at-large.
In November 2007, both the American Association of State Colleges
and Universities (AASCU) and the National Association of State
Universities and Land-Grant Colleges (NASULGC) will release the
``Voluntary System of Accountability'' template for public discussion.
This reporting system will make additional information available to
parents and students regarding student specific actual college costs,
financial aid results, community service participation as well as
numerous standardized test results that assess value-added learning
growth both inside and outside of the classroom. We fully endorse the
public university VSA and our university will be among one of the first
pilot institutions to provide the necessary information for reporting
purposes. The California State University System will, in addition, set
forth what is called a ``Public Good'' measurement system that will
provide more clarity and transparency especially for categories that
are not included in the national VSA or the model adopted by the
private higher education sector.
In addition to the national VSA, the augmented CSU VSA (see
Appendix A), addresses four important ``Public Good'' categories that
are either deemphasized or not included in the other measurement
systems. If approved by the CSU Board of Trustees in mid-November, this
information, which has already been collected from each of the 23
universities in the Cal State system, will be made available for public
discussion. The categories include:
1. Average Undergraduate Student Debt
Average amount in debt of graduating seniors
Proportion of graduating seniors in debt
2. Degrees Granted
Degrees Granted in High Demand Fields
Race/Ethnicity of Undergraduate Degree Recipients
3. Economic Diversity: Access and Completion
Undergraduate Pell Grant Eligibility (enrollment &
percentage enrolled)
Undergraduate Pell Grant Recipients 5-yr. Average
(enrollment & percentage)
Undergraduate Degrees Awarded to Pell Grant Students
(Degrees & Percentage)
4. Actual ``Net Tuition and Fees'' paid by an average
student when compared to the posted sticker price
As you can see from the categories exhibited in Appendix A, it is
our hope that the federal government will also consider these items
when developing new reporting requirements for colleges and
universities. Currently, many institutions refuse to make economic
diversity data readily available to consumers, taxpayers and other
constituencies.
Recommendations for more effective accountability and transparency
A. In addition to the current reporting of graduation rates, the
federal government should collect and distribute aggregate graduate
numbers and economic diversity characteristics of enrolled and
graduating students. This reporting can be accomplished by requiring
and publishing Pell Grant eligibility access and completion data in
aggregate numbers and percentages. Also, existing graduation rate
reporting should be disaggregated using federal financial aid receipt
(Pell Grant eligibility) as a proxy for income so that policymakers can
better understand risk categories earlier in order to support timely
and successful graduation.
B. Require that an average ``net tuition and fees'' be calculated
by each institution and made available to students, parents and
taxpayers. This average net tuition should reflect the average cost
versus the sticker price per full-time student, not simply aided
student. Sticker prices do not reflect the actual cost of higher
education. Using ``sticker prices'' distorts and creates a flow of
misinformation to consumers and students further confusing the economic
realities of college attendance. If the federal government is to help
improve the efficiency of the marketplace of higher education it can
contribute materially by collecting, calculating, and distributing
actual program cost information by types of institutions. Such
information can then be used to develop as a more viable basis for the
allocation of federal subsidies. This initiative would simplify federal
policies while not penalizing states that continue to publicly support
higher education and encourage institutions to keep costs down.
C. Require the colleges and universities to collect and distribute
average student undergraduate debt amounts and the percentage of
seniors graduating with student loan debt. Consumer information about
student debt loads is currently very difficult to obtain for most
people.
D. Require that federal agencies collect and pay much closer
attention to institution specific expenditure trends when making
policy-based determinations. Understanding institutional expenditure
trends is essential for determining which colleges and universities
have actually increased their costs to serve more students, more needy
students, or simply to maximize the prestige of the institution.
2. College Costs, state appropriations and ``maintenance of state tax
effort''
In addressing the issue of college and university tuition and fee
growth, it is obvious that the problem of higher education costs and
tuition does not detrimentally affect parents, students and
institutions the same. This fact is evidenced in numerous
congressionally-mandated studies of college costs and prices, showing
drastic variations in average tuition and fee growth between private
and public universities during the last two decades. Public perception
of rising tuition costs has been shaped by a number of reasons,
including geographic location and the media which is heavily influenced
by high cost institutions in the northeastern region of the U.S.
Importantly, misunderstanding is fueled by an overall lack of
information in the academic marketplace that prevents students and
parents from distinguishing real net costs from ``sticker prices.'' For
example, students and families pay college tuition in dollars, not in
percentages, yet the vast majority of public discourse by policymakers
and the media dwell on college cost increases reflected simply as
percentage growth. In fact, ``if you analyze actual tuition and fee
dollar increases, instead of tuition and fee percentage growth, you
will discover that many of the public universities with the largest
percentage increases over the last few years are the very institutions
that are the most affordable and accessible. A small dollar increase
may well be reflected in a relatively large percentage increase at
lower tuition institutions. This is especially true in lower cost/high
tax effort states like California, Hawaii, North Carolina, West
Virginia, and Kentucky which have worked hard to keep student tuition
and fees at very reasonable levels in exchange for maintaining above
average tax support. These low tuition states remain low cost in an
effort to ensure widespread access and affordability. Also, these same
states are among the lowest in the nation in average student loan debt
per graduate.
Furthermore, it is quite obvious that as state appropriations slide
downward, student tuition and fees must rise. The interlocking
relationship between public institutions, tuition and fee policies and
state appropriations is an area that seems to be pervasively
misunderstood by taxpayers and policymakers. Over the last decade
studies have highlighted the instability of state appropriations and
the effects of state policy on public institutional tuition changes. In
a recent Congressionally mandated NCES study on college costs and
prices, it was shown that state general fund appropriations was by far
the most significant factor in determining public college and
university resident tuition rates . This is especially evident when
reviewing overall public college and university tuition and fee changes
when compared to state appropriation changes during the last decade. As
shown in Table 1, the most influential reason for increases in public
college and university costs is the drastic fluctuations of state
appropriations. Therefore, in my view it should be a federal imperative
to ensure that states maintain their public support of higher
education. This ``maintenance of fiscal effort'' is a necessary part of
the federal/state partnership to ensure that states continue their
current level of support. A ``maintenance of effort'' federal/state
partnership would make it more difficult for states to further reduce
their fiscal responsibility to public colleges and universities by
shifting the increasing costs of higher education to students, and
ultimately, federal tuition-based programs.
In the case of the State of California, the dependent relationship
between state appropriations and student tuition and fees was never
more apparent than when the state budget was developed two years ago.
State legislators and the Governor made a conscience decision to
increase funding for higher education by approximately 6.5 percent to
alleviate the need for a student fee increase while still allowing the
CSU to expand by 25,000 additional students. The result was that
student tuition and fees did not increase one dollar during that year.
It is also important to point out that state legislatures do not
allow, in most cases, public institutions to set their own tuition and
fees. Currently, there are only 14 states that allow individual
institutions such prerogative.
College Costs and Equal Opportunity Recommendations
A. Federal Partnerships: Cost of Education Allowances Program (with
maintenance of state fiscal effort provision):
Thirty-five years ago, the original Pell Grant legislative proposal
called for the creation of a companion program that would grant
additional funds to the institutions that served Pell Grant recipients.
The program was premised on the well-recognized fact that it costs more
to educate lower income students at all levels. The original
legislation recommended the creation of ``cost of education''
allowances to be allocated directly to institutions. These grants were
to accompany the Pell Grant recipients to their respective college or
university. This proposal emphasized the benefit to the individual as
opposed to the institution by recommending that the Department of
Education create ``cost of attendance'' allocations in the amount of
$2,500 per Pell Grant eligible student. This plan provided additional
assistance to institutions serving needy students. To ensure that these
funds were properly devoted to student enrichment, the proposal
required that federal funds be used to support campus-based academic
and student service programs that primarily assist lower-income
students. This program would have created important fiscal incentives
for institutions to enroll lower-income students. However, this part of
the original plan was never enacted.
Currently, there are no federal incentives of this kind in place
and as a result many high priced private and public institutions have
seen their enrollments of lower income students stagnate and even
decline. The incentives we propose today would foster greater fiscal
collaboration among federal, and state governments and institutions.
This would promote greater college access for lower income students,
support retention efforts, and reward higher completion rates. As part
of this partnership, our recommendation calls for the creation of a
``state maintenance of effort'' provision to ensure that states do not
reduce their commitment to public higher education. These federal
incentives would not only provide invaluable support to those
institutions serving the neediest students but would ensure
sustainability of state funding at federally supported levels. To
accomplish this, the federal government should require that states
maintain current levels of state support in the form of average per
student appropriation or an expected level fiscal tax effort which
would be defined at the federal level. If states do not abide by this
provision and used these federal funds to ``supplant'' existing state
support then the amount of the federal institutional grant can be
reduced or withheld pending.
B. The federal government should not continue to increase the
current aggregate federal loan limits so long as such are tied to the
sticker prices established by the individual institutions. Rather any
increases in federal loan limits should be based on the actual costs
incurred by the institutions in the provision of the educational
programs. If the current system that incorporates sticker pricing
remains in place when aggregate loan limits are expanded we fear that
this will result in even higher sticker prices in the years to come on
many college campuses. This trend also would further generate more
public backlash against all higher education institutions not just the
institutions that have escalated their pricing. By simply expanding the
aggregate loan limits without making additional formulaic changes the
federal government would ultimately drive more students toward higher
amounts of student loan debt.
Institutionally, the expansion of the aggregate loan limits would
primarily advantage public and private wealthy institutions that charge
significantly higher tuition rates over the lower cost, less affluent
public universities and community colleges. Instead, it is our belief
that the federal government should direct institutions to provide
adequate student loan counseling and assistance that encourages
students to use all federally supported loan opportunities. Currently,
numerous studies indicate that students who have been increasingly
turning to additional private loans to pay for college have not fully
maximized the existing federal loan programs. Federal loan programs and
their subsidies should be focused on expanding access instead of
providing choice. By not expanding the aggregate loan limits the
federal government is also putting more pressure on the wealthy
institutions to better control their sticker pricing and expenditures.
C. The federal government should require that all colleges and
universities that receive federal direct student aid enroll at least a
given percentage of Pell Grant eligible students or demonstrate that
the institution is making progress toward this goal. Institutions with
less than the prescribed percentage of Pell Grant eligible students
would face federal direct student aid reductions.
In summary I have spoken to you today about important issues
regarding the enhancement of institutional accountability and
transparency, the determination of actual college costs, and the role
of the federal government in ``state maintenance of effort'' in
supporting higher education. I realize that some of these
recommendations require a significant overhaul in our national higher
education agenda by requiring a much more strategic partnership between
the federal government and our state governments. I also realize that
timeline for this Reauthorization is very short and upon us now.
However, I do think that we will require these kinds of national
conversations to reform our current higher education system if we are
going to promote equal and affordable education opportunities in order
to remain competitive with other OECD nations in the decades to come.
______
Chairman Miller. Thank you very much.
The committee will recess for the purposes of going and
casting our votes, and we will return as soon as those votes
are done.
Thank you.
[Recess.]
Chairman Miller. Thank you very much for your patience.
The committee will reconvene.
Thank you for your testimony.
I am going to begin with Mr. Tierney. Mr. Tierney has a
conflict since he is in the Conference Committee on the
Intelligence Committee. So Mr. Tierney is recognized for 5
minutes.
Mr. Tierney. Thank you very much, Mr. Chairman.
Thank you, our witnesses today.
I think you are probably aware that we have had a bill out
there for the last couple of sessions that talks about state
maintenance of effort, and I think the concept is acceptable to
most people. What we are having difficulty with is how do we
accomplish it.
So, if we could start maybe from right to left on this,
sir, if you could give us some ideas of just what would we use
as either an incentive or a stick or both to get states to do
that?
Mr. Alexander. Okay. Thank you for the question.
I know that you have been working to try to incorporate
these provisions into the act, in the Reconciliation Act, and I
commend the efforts. I know that the LEAP funds were used as
potential leverage for this earlier, and I know that our
counsel and state government certainly do not want their
flexibility constrained.
But what I think could be done--in 1972, the Pell grant
program, when it was put into effect, had a companion program
that was supposed to be adopted at the same time. It was called
the Cost of Education Allowances. Those Cost of Education
Allowances would partner with institutions and reward
institutions who enrolled, retained and eventually graduated
lower-income Pell grant students. That initial grant to that
institution that would follow the low-income student was $2,500
in the discussions in 1972. For some reason or another, that
companion program was left off the table when the Pell grants
were adopted and the final proposal was finished in 1972.
I believe that you can use a similar structure to shape the
type of grants that would go to institutions and leverage them
with state appropriations so that that grant would ebb and flow
or increase and decrease based on what the state's commitment
to their own appropriations are.
Mr. Tierney. Would you give me an example of that?
Mr. Alexander. Certainly. For every Pell grant--for
example, our institution with 37 percent Pell grant students--
we would actually get a companion grant that would follow those
students to our institution to help them succeed.
Now the actual amount of that grant could fluctuate based
on how California contributes to public higher education and,
actually, put pressure and leverage on the state legislature by
saying if the grant were on national average $2,500, but in
California the grant could be $3,200 because it is a more
commonly supported tax system and tax base, our appropriations
are higher.
Those appropriations could be shaped, or at least the grant
size could be shaped, based on tax effort of those states
either to advantage those states that want to continue
supporting higher education or disadvantage those states that
think that it is in their best interests to remove themselves
from these appropriations.
This also does another thing. It creates an environment
where states cannot supplant the federal resources, like we
state in Title 1, and it works very much like the Title 1
proposals in our Title 1 schools. There is a provision in Title
1 that says that the states will not supplant these monies with
state monies, and it is designed, in the same similar design,
to aid schools that support low-income students and aid schools
to support them throughout their educational careers.
Mr. Tierney. Thank you.
Sir?
Mr. Bassett. Congressman Tierney, we both live in a state
that has not taken very good care of public higher education
over the years, and one of the excuses really is the strength
of the private-sector system, which is not a very good excuse
for taking such bad care of the public system. Even though I am
at a private university, you may know that Governor Patrick
recently asked me to co-chair a committee to look at the
governance structure of public higher education in the state.
The only thing I would encourage--and the federal financial
aid works in both the public and private sector, but even
limiting the discussion to the public sector for the moment--is
I would encourage us to study carefully the consequences of any
of these linkages that we develop here. How are states likely
to respond if the formula is the kind of one that President
Alexander talked about? What will universities respond? How
will CFOs respond to this structure?
I think something needs to be done. I think you are
probably on the right track with the proposal here, but I also
know that all these linkages have consequences that one does
not predict when one sets them up, and simply looking ahead to
the next stage and seeing what that would probably be would
probably be helpful. But I do believe that some of our states
are taking a lot better care of public higher ed than others
are.
Mr. Tierney. Thank you, sir.
Ms. Wellman?
Ms. Wellman. I am not sure if I have a lot to add. I like
the shape of the proposal that Dr. Alexander put out. It makes
sense to me.
The one thing I would hope could be considered is to add a
tension through accountability metrics about how resources are
used and look for examples of ways that degree attainment is
increased, not just make it about increasing money on top of
money.
It has to have indicators of spending and productivity to
provide incentives for the states and the institutions to do a
better job of paying attention to money.
Mr. Tierney. Well, thank you very much.
Mr. Chairman, thank you for your courtesy as well.
Chairman Miller. Thank you.
The gentleman from Florida is recognized for 5 minutes.
Mr. Keller. Well, thank you very much, Mr. Chairman. I want
to especially thank you for holding this very important
hearing.
Congress is very concerned about the skyrocketing cost of
college tuition. Tuition is up 31 percent at public 4-year
colleges over the past 5 years. What good is it to college
students if Congress raises Pell grants by $2,000 only to see
colleges respond by raising tuition by $3,000?
The author of the College Board report, Ms. Sandy Baum, was
quoted recently in USA Today, on October 23, 2007, saying,
``Clearly, finding some way to temper prices is necessary.''
We have heard some excuses that, ``Well, we have expenses
that are going up, and health insurance and electricity and
other bills, and inflation has played a role in this,'' and I
frankly think that that is an unacceptable excuse. When I
pulled the numbers, the 1-year change in inflation, the CPI, is
2 percent, yet college tuition at 4-year universities,
according to the College Board, is up 6.6 percent in the last
year, triple the rate of inflation. Over the past 5 years, the
change in inflation is 15.1 percent, yet the tuition at public
4-year universities is 31 percent, double the rate of
inflation.
I am not saying that we are so frustrated that we are about
to implement price controls. I am saying the skyrocketing cost
of tuition is starting to tick people off around here, and we
have to get a handle on this situation.
I do not want to paint too broad a brush. When I look at
states like California, you can get a community college
education for $633 a year. What a spectacular bargain. And then
after you graduate from a 2-year community college, many of
their universities have articulation agreements that allow you
into their 4-year schools for a mere $4,971, again a bargain.
My home state, not to brag, but is also a great bargain, $2,000
to go to community college, $3,300 to go to a 4-year school.
And so let me begin by, Ms. Wellman, asking you some
questions. And, certainly, I do not blame any of you all who
are testifying for any of these problems, actually, and Mr.
Alexander here is from one of the best states, California.
But, Ms. Wellman, when you look at the increasing costs
that colleges or universities have to deal with in terms of
their overhead, what percentage of that is the salaries of the
college professors and the staff?
Ms. Wellman. It is a different number in different
institutions, and the general pattern is that it has been going
down.
Mr. Keller. College or university professors are getting
decreases in their salaries?
Ms. Wellman. There are two things going on. The high-end
faculty are getting paid more, and the regular faculty are not
getting paid that much more, and most of the faculty are part-
timers, so----
Mr. Keller. So take the high-end guy. Let us say it is a
famous professor that you need in your chemistry department
because he has published some stuff. He is getting a bigger
percent increase because he is a valuable commodity, and you
have to compete with other universities, correct?
Ms. Wellman. Yes.
Mr. Keller. But when you talk about the lower-end person,
someone who teaches, you know, Intro to History to an undergrad
at community college, they are still getting a little bit more
than they were the year before, but not a whole lot more.
Ms. Wellman. That is right.
Mr. Keller. Of a university president's budget, when he
looks at electric bills and costs of other things, what
percentage typically are salaries for the professors and staff?
Ms. Wellman. I think the standard in the industry is that
it is someplace between 80 percent and 90 percent salaries. I
think the data show that it is actually going down a little
bit, but it is a hefty percentage. The biggest single area of
spending increase in institutions has been merit-based student
aid, number one, followed by benefits, health benefits.
Mr. Keller. Mr. Alexander, as someone who runs a university
out there, can you give us any suggestions, based on
California's success in this area, as to what we might do or
what might be done to address the increasing costs of tuition?
Mr. Alexander. I think it is very important. I think you
are hitting in and around a very important issue that I have
made one recommendation in my testimony that we should pay a
lot more attention to, is instead of, I think, incorporating
everybody in sort of the same criticism, I think we need to pay
close attention to the expenditures, per-student expenditures.
I think it will tell the whole story of college costs, and
for the last 20 years, you will find out which institutions
have increased their expenditures because they are serving more
students, which ones have not changed their per-student
expenditures.
I am speaking on behalf of a university since 1985 that has
gone from about $11,500 a year in per-student expenditures to
about $13,200, so we really have not changed very much. But I
know there are other institutions out there that have gone from
$30,000 to $80,000 per student, and I think the expenditure
considerations are very important to pay close attention to.
And in addition to that, I think that then the federal
government should play a role in identifying those institutions
who are doing a good job and then rewarding or supporting those
institutions that are doing a good job in keeping costs down
and being efficient to the public.
Mr. Keller. Thank you.
Mr. Bassett, sorry I did not get to you, but my time has
expired. So, hopefully, one of the other folks will be able to
ask.
Chairman Miller. Do you want him to answer?
Mr. Keller. Mr. Bassett, do you have any suggestions for
the chairman and other members here as to what we might do or
what might be done to address the skyrocketing costs of college
tuition or the increasing costs, however you phrase it?
Mr. Bassett. Well, you put your finger on the reasons for
the increases in costs, clearly. There are utilities. We talked
about this. There are tremendous increases in technology costs.
As I indicated just at my own school, utility costs were up 152
percent over a decade; technology costs, 189 percent; health
insurance, 90 percent; and regular insurance, 90 percent.
But, to some extent here, it is still the labor-intensive
industry that it is, people, and if you do not change the ratio
of the number of faculty members to the number of students or
if you do not change replacing a full-time professor with a
teaching assistant or a part-timer, those costs continue to be
probably a little out of whack with consumer price indexes.
If it costs $40,000 a year to educate a student at a good
private college, and we charge them $30,000, the other $10,000
is coming from philanthropy, from the endowment, from the
annual fund. To provide education of the same quality at a
public, however, is going to have the same cost factor, and if
you are only paying $7,000 of that $40,000, the rest is going
to be covered by taxes, or you are going to develop your own
philanthropic foundation, as you have to do, but philanthropy,
taxes and tuition are really the three sources of income here.
I think we have to work together on containing costs
because I agree with you. Americans are saying, ``How do we
limit the cost of college education?''
But I do know the Pell grants do not lead to higher
tuition. In fact, the Pell grants help us keep tuition lower
because in our market--and, again, I cannot speak for the
wealthiest of the universities--if we raise tuition above a
certain point, we do reach a tipping point, and we are going to
lose revenue, and the existence of a Pell grant makes it
unnecessary for us to raise tuition as much as we would have to
otherwise or to reduce quality, which is the other option.
Chairman Miller. Thank you.
The chair is going to be recognized for his time. I
recognized another member previously, for those who just came
in.
The issue that was raised by Mr. Tierney and, Mr.
Alexander, in your testimony, the idea that somehow we have to
not supplant language or something along those lines, we have
that in almost every other big grant program to the states.
In this particular situation, the grant program is not
exactly a grant program. It is access to federal loans, and it
is access to the Pell grant and a few other things that we do
in higher education. I used to be staff in the state
legislature, and many members here used to be members of the
state legislature. You do make decisions based upon what you
put at risk with respect to the federal government, whether it
is Title 20, whether it is Medicaid, whatever it is, you weight
that, and small cuts sometimes carry high risk, and
legislatures do not do that.
You know, we just made this commitment of some $20 billion
in various ways to higher education, and yet we can see that if
we continue this pattern, that advantage will be nullified
rather rapidly, and so I think that the idea of trying to
construct a partnership here where we cannot just keep putting
money in at the top--you know, the idea that you respond to Mr.
Tierney that you might have a partner--what did you call it? A
Pell grant? A shadow? Or the one that follows the Pell grant?
The original from the----
Mr. Alexander. Yes. Cost of education allowances.
Chairman Miller. Yes, but we now live under a pay-as-you-go
system, so I have to come up with billions of dollars to once
again try to get you, the states, to meet their public
obligation to their public institutions. I do not think that we
can do that, and that is why we have these other ways of
dealing with it, with the maintenance of effort or supplanting
or whatever regulations we put in place.
I think to more and more members of Congress that is
starting to look like a wise decision. Otherwise, we are on a
fool's errand. We just keep shoveling coal in at the top, and
they just keep taking it out the bottom, and that is not
working out for the families we represent, and it is certainly
not working for the use of federal tax resources.
Having said that, that is the easy part. Constructing it is
the difficult part because you do not want to start harming
individual institutions or students, and it sort of leaves out
of the equation the privates in this one because we are talking
about the obligation of the states.
And I just do not know if you want to elaborate on this,
but, you know, we in this committee have been struggling with
this for a number of years, and after you get past
transparency, there are not many levers left unless you move to
a larger maintenance of effort idea.
Mr. Alexander. I would say a couple of things have
certainly evolved perhaps the way that they were not supposed
to. The federal government 40 years ago was supposed to augment
states, not become the primary revenue supplier through grants,
loans and tax credits, and for the first time in the history of
American higher education, the federal government now is at $90
billion in tuition-based assistance, while the states are at
$85 billion. So they have passed the states. The states have
not been keeping up with their obligation. That is certainly
true.
Anecdotally, when I was in the State of Kentucky, I was
standing in the parking lot, and the speaker of the state
senate of Kentucky leaned over to me and said, ``Why should we
give you more resources when you can just get it through
federal loan and grant programs?''
This is an interesting comment because it basically said,
``I am going to get re-elected by not helping you, but you can
help yourself by increasing tuition,'' ultimately getting
students in greater debt, pushing students into greater debt.
I think more legislatures are understanding this is an
easier out than many of their other obligations.
And with regard to private sector, there are many private
institutions out there who have also remained true to serving
low-income students and large numbers of low-income students.
Those are generally your lower-cost private institutions also,
and they could also be included in this federal program that
creates cost of education allowances to help them educate,
retain and graduate those students.
If I could add, my greatest concern is that the incentives
work in the opposite fashion right now, and universities are
quickly fleeing their responsibilities to low-income students
all over the United States. We see it from Maine to the State
of Washington, and if you have followed these trends over the
last 20 years, the only two states who really have increased
their Pell grant eligible students substantially throughout the
state systems have been states with large demographic changes,
like Texas, New Mexico, Florida and California. So it is a
national issue of national significance.
Chairman Miller. Thank you.
Mr. Castle.
Mr. Castle. Thank you, Mr. Chairman, and thank you very
much for the hearing.
And thank all of you.
I am particularly interested in this subject, and I have
several questions. I would like to get into the actual costs
themselves.
I see, Mr. Bassett, for example, in this enhancing
affordability and accessing independent higher education chart
all the good things that some of these schools are doing, and I
look at the schools, and I wondered if any of us could get in
most of these schools. I mean, we have Amherst and Brown and
Columbia, Davidson, Stanford and Harvard and Princeton or
whatever. It is nice that those schools are doing it, but I am
also concerned about the vast majority of our kids who need
education.
I am one who believes that we should educate every child
possible in this country for economic reasons and maybe
societal reasons in general, and the question I have is
directly to the actual costs of all three of you, and as either
heads of organizations or as heads of schools or whatever, you
have had some exposure to this, but I am interested in
innovations that may be going on that could save costs.
I just jotted down some things: for example, using retired
professors. Every one of us in this room could talk about some
professor who is probably 70 years old now who was really
extraordinary when we there who probably on a per diem or per
hour basis would be willing to come back.
Are there volunteers available? We use them in political
campaigns? Are there coaches who would volunteer to some
degree? What about alternative energy, going to solar and those
kinds of things? I mean, various ideas out there that perhaps
could help with these costs because I do not care how you cut
it, the costs of higher education have gone up faster than the
cost of living in this country.
We need simply to deal with this, and maybe this is one way
we can deal with it. Are there innovative ideas out there that
have either been tried or could be tried that we could be
looking at that you have run across or tried yourself or
whatever? Any one of you.
Ms. Wellman. I think the short answer is yes, and one of
the things we are working to do is identify those examples of
effective management practices that have reduced costs and, at
the same time, gotten more kids to and through college.
Course redesign has been tried, and it is very successful
in a number of colleges to increase the students' success in
first-year programs. The programs are less expensive. The
students learn more. They retain more. They graduate more.
There have been a lot of colleges that have done good
things with energy conservation, and if you look at it
nationally, there are good numbers and a good track record on
cost reduction in energies. There is administrative savings and
information systems savings.
The biggest changes are going to come when we are able to
look at different ways of using instructional staff to put more
full-time faculty in classes for the freshman and sophomore
year and get those students retained and on to graduation.
We fund our systems now in a kind of lopsided way. There is
more money per student spent the farther the student gets in
the career, and if we are going to be smart about being cost
effective and increasing attainment, we can move money around
to really increase productivity without compromising costs. It
can be done.
Mr. Castle. Thank you.
Mr. Bassett. I think that most of the colleges I am
familiar with have done a number of these things, certainly
energy reduction, reducing temperatures. I mean, my university
was proud to get the first gold rating from LEEDs on a new
building in the City of Worcester, but that is part of a larger
energy commitment we have made to save money there. Using
retired faculty, yes, and often it does reduce costs, but it is
at the margins. It is not something that is going to have a big
impact.
Ms. Wellman's point about instructional costs, though, is
not an unimportant one, and a lot of the less fortunate savings
maybe right now we are doing come from less expensive per
student teaching at the lower levels. If we start taking that
as seriously as we should, it could potentially increase costs
so we have to be creative in how we build that in.
But consortial arrangements and purchasing, state
arrangements, such as one they have, I believe, in Wisconsin
that Representative Petri helped set up for savings--those
colleges that operate in a very tight market have to be looking
at all these things. What we may need is a better information-
sharing system, a best practices communication system where we
could all more efficiently share new ideas with each other for
cutting some of those costs.
Mr. Castle. Dr. Alexander, do you have any thoughts on
this? You have about 30 seconds.
Mr. Alexander. Just briefly, in California, we have some
environmental restrictions that force us to do a lot of these
things at much earlier times from the cars we buy, fuel-
efficient hybrids to solar panels to all our new buildings
being green buildings. So we are moving in this direction.
Sometimes sustaining things initially and working on
sustainability initially costs you more up front and, actually,
the savings do not come for 10 or 15 years down the line.
I have 11 unions on my campus that, and using part-time or
retired faculty does sometimes get into that, but we continue
to grow as an institution, and our expenditures are relatively
flat, and we serve about 1,300 to 1,500 new students every
single year, and our campus is pretty crowded.
So we are doing everything we can to serve those students
as efficiently and effectively as possible, and we will
continue to look for ways to do that as well.
Mr. Castle. Thank you.
I thank the panel.
Chairman Miller. Thank you. The gentleman's time has
expired.
I was just looking at new information put out by the Public
Policy Institute in California this morning, and it said that,
``In Californians' minds, the state's economic vitality is
closely tied to higher education, with 76 percent calling the
state's college system very important to California's future.
It is the belief of most residents, 68 percent, that the
state's economy will need a higher percentage of college
education workers in 20 years.''
They recognize that these institutions are economic engines
for the future of the state, and yet 43 percent say they are
very worried and 32 percent say they are somewhat worried about
being able to afford college for their youngest child. So they
recognize this as an asset to the state, and yet they have this
anxiety about whether they are going to be able to participate
in the benefits of that asset.
And I think sometimes you know, when we see the state
legislatures--and I know there are economic cycles in states--
walking away from this on the assumption that, well, you can
just make it up in tuition, that is what creates that anxiety.
Mr. Courtney, you are recognized for 5 minutes.
Mr. Courtney. Thank you, Mr. Chairman.
Dr. Bassett, in your handout, you had some examples of
colleges that are doing different ideas or, you know, pointing
out different ideas in order to make college more affordable,
and there were a couple of colleges that have actually
eliminated using loans and just replacing them with grants--
Amherst, Baylor, Brown University. Are they able to do that
just because they have large endowments? I mean, what are they
doing right there that allows them to do something that
extraordinary?
Mr. Bassett. Yes. [Laughter.]
All of the rest of us would like to do that because it is
tremendous P.R. I would say it is large endowment. It is also a
larger percentage of the students able to pay full tuition,
again, the two sources of revenue being their endowment and
gifts and tuition.
Clark, I find, has the smallest percentage of families
making over $100,000 of any lead private in New England, and,
therefore, we may have the smallest percentage of full-paying
students of any of the group of schools we compare ourselves
with.
I would love to be able to say, like Harvard, like Amherst,
no more loans, grants if you need it. We would try to come as
close as possible to that, but we cannot get all the way there
ourselves, and I think that is true of 95 percent of the
colleges.
Mr. Courtney. I kind of figured it was like that.
Mr. Bassett. Yes.
Mr. Courtney. And, Mr. Alexander, the other two witnesses
have sort of expressed their opinion about the question of
whether or not increasing Pell grants has an effect of pushing
up tuition. I do not think you have actually weighed in
yourself specifically this morning on that. I am just curious
whether or not you wanted to at least go on record as far as
what your thoughts are on that.
Mr. Alexander. On the record, I will say I have studied
this issue for quite some time as well, and I have seen
virtually every report that referenced this area, and Pell
grants are the least cost sensitive or price sensitive of all
the grant programs. They are more income sensitive, which is
wonderful.
When you move into the other programs, when you move into
SEOG, when you move into the federally subsidized loan
programs, when you move into the unsubsidized loan programs,
and when you take into account state individual grant programs
which are highly cost sensitive to the extent that many of them
even have been started under the guise of tuition equalization
programs, I would say that is not the case with most of the
other programs, and it does tend to give institutions that have
higher inflated sticker prices more aid or qualify their
students for more aid, but that is outside of the Pell grant,
and those are the other programs that exist.
Mr. Courtney. You made a reference to the fact that New
England was one of the places where the public support at the
state level has been a little weak, and coming from Connecticut
and being a former state legislator, I can plead guilty to that
assertion because I think it is clear that that has occurred
and there has been a corresponding increase in tuition.
I think the chairman is right that having been a former
state legislator, when you are doing budgets and you are aware
of the fact that, you know, whether it is child and protection
services or Medicaid budgets, if you are going to lose money,
you tread carefully whereas, obviously, it does seem like an
ATM card when you are looking for ways to sort of balance the
budget.
But I am still sort of waiting to get that specific
suggestion about, you know, how you implement that maintenance
of effort sword over a state legislature. I mean, what do you
threaten them with if they do not adequately fund this part of
state government?
Mr. Alexander. Well, you have the carrot and the stick
circumstance, and I am concerned, too, that down the road, if
we do not address this issue, we are going to be back at this
table every 5 years like we were in 1997, the college costs
commission 4 years ago when I was here representing Kentucky
and what we were doing.
I think that there are lessons to be learned on how we have
funded schools and poor students in Title 1 and how we have not
supplanted state resources in Title 1 funds for K through 12
education. We have not even ventured down this road, and, in
fact, we do a better job at even knowing where our low-income
students are in our K through 12 sector than we do in higher
education.
We have institutions who do not want to talk about their
Pell grant eligible numbers and who do not want to talk about
their income levels of the students that they serve, and they
may give a lot of money and a lot of aid to a small number of
students, which looks good for the small number of students,
but with the nation with 25 percent children in poverty who are
all going to need some form of access to higher education, I
think a much more comprehensive system that rewards
institutions based on state appropriation levels and sets it by
tax effort, could actually encourage states like Connecticut,
states like Colorado, quite frankly, who is a rich state that
does very little to nothing for higher education. They simply
rely on out-of-state students to come in and fund public higher
education.
I think that you could devise this quite easily, a system
that rewards states or pulls lower-funded states up from lower
areas or puts pressure on them to keep funding or put more
money into higher education while at the same time rewarding
those states that continue to fund publicly accountable systems
of higher education in terms of keeping costs low, like North
Carolina and California.
Chairman Miller. Mr. Petri?
Mr. Petri. Thank you very much, Mr. Chairman. I just have
two questions of the panel, and the first one actually, Mr.
Bassett, referred to briefly. I was going to mention that for
the last 6 years or so, myself, Mr. Obey and others from
Wisconsin have been working with our organization called
WAICU--that is the Association of Independent Colleges and
Universities--in an effort to help them consolidate backroom
functions. Universities or colleges are a series of small
businesses and they do not really need to replicate a lot of
things back office that can be consolidated without merging the
front and instructional classroom experience where it is not
appropriate.
They have done that with information technology, computer
programs, with health care, I think, the dining halls and
energy purchases and a number of other areas. Significant
savings have been realized, and I just wonder if you would care
to comment on that, whether that is a fruitful area. Is that
being done in other states, or is this something that is only
unique to Wisconsin?
Mr. Bassett. It is being done. If done, it is done at a
local consortium level. For example, we have 13 colleges in the
College of Worcester Consortium, public and private, and a lot
of those things are being combined, the back office, maybe not
as far as they could go, but having both public and private at
times in a state can limit the number of things you can put
there.
But the committee that I am now chairing in Massachusetts
looking at public higher education in the state is beginning to
raise that question about the public system in general, that
there are all kinds of consortial savings that lie out there
for combining some of the back-office operations that they have
not yet begun to do in the public sector generally.
So I think whether or not it is a public-private
combination or public sector or just the private sector, there
are a lot of things that those, as you say, small businesses
can be doing that can lead to savings that are savings of
efficiency and not as I was speaking before cost cuttings that
will reduce quality. None of these things will reduce autonomy
and they will not reduce quality either.
And I think what we need again is a way of sharing our best
practices around the country as to what exists out there that
we can emulate and learn from each other.
Mr. Petri. One other area is dealing with federal financial
aid itself, and each school has staffs trying to learn all
this. It actually can be done quite simply. The private
financial guarantee agencies have kind of resisted that because
one of the ways they have signed up colleges is to provide some
of the services as a benefit to the colleges. The direct loan
program does not do that. But this is an area where significant
savings or efficiencies can be realized, and it actually will
help save the federal taxpayer a little money if they adopt a
more efficient program.
My time is limited. Let me just switch to another subject
that I did not hear mentioned that does, I think, drive up
costs in many instances, or at least disrupts the normal
planning process, maybe for good, maybe for bad, and that is
the accreditation process, and I wonder if you could comment on
whether accreditors place arbitrary burdens or policies that
might be outdated or burdensome or even appropriate on
institutions and whether the accreditation process is driving
up costs in America.
We all should be looking at it as a way of trying to, you
know, make sure we have quality, but that we do not just let
different people put their agenda in and say, ``You have to
build this building or put in that library'' or whatever it is
because some particular part of the university takes over and
hijacks the whole process.
Mr. Bassett. Actually, it is a good question. I thought it
was going to go in a different direction. I thought you were
going to ask what has been the increase to budget caused by
state and federal regulations, which is not accreditation but
sometimes those factors do increase costs also.
Accreditation, generally speaking, I think, is probably one
of the least expensive qualitative controls per hour in the
sense that most of the accrediting agencies are working with an
awful lot of volunteer consulting help coming from
administrators and faculties in universities and associations.
Whether it is the five regional accrediting bodies in
America or whether it is the many, many professional
accrediting bodies for nursing and law, physical therapy and
everything else, there is--of course, most of this usually
begins with a self-study, which does take resources to do, but
asking the very questions that Congress and the Secretary have
been asking us, how effectively are we operating as an
institution. An outside body visits and comes up with a report,
which, while it creates a bottom line of accountability, also
provides a great deal of help to the institution in improving
itself.
So it is not clear to me at this point that accreditation
is one of the excessively expensive operations that
universities and colleges pay for, if they believe in
accountability, but my colleagues may have other perspectives
on that.
Chairman Miller. The gentleman's time has expired. I have
11 members waiting for----
Mr. Andrews?
Mr. Andrews. Thank you.
I would like to thank the chairman and the committee for
having the hearing.
I think that one of the things I hear most frequently from
my constituents is their stress and worry about the very high
cost of paying for higher education, and this is a problem that
needs to be approached by looking at data, and I think we have
had three excellent witnesses this morning to help us do that.
I have some questions and maybe if there is some data that
we have not heard about, I could learn where to find it.
What percentage of students in American higher education
pay the sticker price? That is to say net of Pell grants or any
institutional scholarships or grants, what percentage of
American students either borrow or write a check for the whole
amount themselves? Do we know?
Ms. Wellman. Not off the top of my head, but I bet you
roughly 60 percent or more get some form of financial aid at
the higher number----
Mr. Andrews. So my hypothesis would be that the relevant
price comparison should not be the top line. The most relevant
price comparison for a student is the bottom line of what he or
she must borrow or write a check for to go to school.
The second hypothesis: I think that there is a
misconception that there is not much price differential in the
marketplace for people to choose. In other words, all schools
cost about the same. I do not think that is true. Are there
data available that compare the price range for what I would
call similar schools? And I would, I guess, President Bassett
this question.
Not all NAICU schools are alike, I understand that, but
many of them are smaller, private, 3,000-4,000-or 5,000-student
schools that focus on liberal arts or similar areas. Are there
data on the price ranges for those kinds of choices?
Like in my state, Drew University is a member of your
association, as is Fairleigh Dickenson, I believe, and they are
fairly similar schools. Are there data on the price range that
one can choose from among types of schools like that?
Mr. Bassett. I do not have the figure at my fingertips, but
I believe if you go to the new U-CAN Web site, you could
probably do a study of the 700-plus colleges that are involved
on that Web site and do a study of the small liberal arts
colleges in a certain part of the country, both for sticker
price and for net tuition price.
Mr. Andrews. And can any of you tell me if there are data
that express the range of price? I mean, if you buy a mid-size
car, right, I guess it ranges from a low of $27,000 to a high
of $45,000, $50,000, depending upon what you put in the
vehicle. Is there a similar discussion of the range of prices
for similar categories of institutions?
Mr. Bassett. Probably, although even among the liberal arts
privates, there would be different categories depending on
where they are in the market, I think.
Mr. Andrews. Well, let me test another hypothesis and ask
each of the three of you to respond to this. One of the reasons
why tuition inflation has outpaced regular inflation is that
there is this considerable amount of cross-subsidizing going on
where students who cannot otherwise afford to go to the school
are having their tuition cross-subsidized in the form of
institutional aid by other students.
Now I do not say that accusatorially. I think that is a
good thing, but when we talk about, you know, other
institutions pay higher health insurance bills, higher heating
bills, higher energy bills, how come you are at 6\1/2\ percent
and they are at 2 percent? Well, one of the reasons is that one
of the areas that make up that difference is money that the
school is collecting from students' tuition and then allocating
it toward institutional aid.
Here is my question: What percentage of the difference
between tuition inflation and regular inflation can be
attributable to institutional aid that is covering for what we
are not doing in Pell grants and states are not doing in state
budgets?
Mr. Bassett. The answer would vary somewhat from college to
college depending on the kind of endowment they have to put
into the need-based scholarships for students. If they do not
have a large endowment for that purpose, then it would be a
larger percentage of that gap you are talking about that is
being covered by the tuition that others are paying. If you
have a huge endowment that can cover that need-based
scholarship aid, that extra money is probably going into hiring
extra chemistry professors and having a better laboratory.
Mr. Andrews. Ms. Wellman, are you familiar with any answers
to that question?
Ms. Wellman. We can get the data. I do not have it in my
head. I want to say it is the average discount, the gap between
what revenue from sticker and what is obtained for spending, is
close to 40 percent.
Mr. Andrews. It is a lot of money.
Ms. Wellman. Yes, it is a lot of money.
Mr. Andrews. Mr. Alexander?
Mr. Alexander. This is not true for most public
institutions. It is a little different for public institutions,
especially when we do have our rates posted and the ranges
within our own institutions. Then we get into out-of-state
issues, which most students have to go into the individual
states.
But one-third of every dollar that we increase in our fees,
in our tuition in the State of California, it is mandated that
we put into state grant institutional aid. If we increase $250,
roughly $80 to $90 of that will go into an institutional aid
that then we actually distribute within the CSU system to
different students----
Mr. Andrews. I appreciate it. I see my time has expired----
Mr. Chairman, I would just say that I am glad the committee
is looking at this--I think what we have created here is a
situation where we have an implicit student tax where some
students pay a higher fee to go to school to help their brother
and sister students, which I think is a good thing, but we have
to ask ourselves whether that is the most progressive and fair
way to pay for that. Perhaps the system that raises more in
Pell grants and public aid that is based on a more progressive
and all-inclusive means of raising revenue is a fairer way to
do that.
I yield back.
Chairman Miller. Mr. Bishop?
Mr. Bishop of New York. Thank you, Mr. Chairman. Thank you
very much for holding this hearing.
I want to go back to this issue of cost drivers that we
were talking about before. Ms. Wellman, perhaps you can help
me, but when I worked with these numbers every day, these were
approximately the case, that about 60 percent to 70 percent of
an independent institution's annual expenditures were in salary
and fringe, about 10 percent in operation and maintenance of
plant, maybe about 5 percent in debt service, maybe about 15
percent in unfunded student aid. Are these approximately right?
Ms. Wellman. Its individual license can vary, but, yes, it
sounds about right.
Mr. Bishop of New York. Okay. So, if we are going to focus
in on the issue of holding the line on price, the most fruitful
area for trying to hold the line on expense would be in salary
and fringe, correct? And we already have a situation in which
the sticker price is less than the cost of providing the
educational service to the student. So we have a real dilemma
here.
We also have a situation that is layered with complexity.
Higher education is labor intensive. We know that. There is
also an enormous amount of competition, particularly in the
independent sector. There is also an enormous growth in
discounting, particularly in the independent sector, so it is
very difficult to chart, if you will, the right path.
And what we are struggling with is, as the chairman said,
we are putting money in at the top end, $20 billion more for
Pell, and, hopefully, that will go a long way towards helping
needy students attend, but what is the best role for the
federal government to play beyond sharing of best practices in
terms of helping institutions deal with this personnel cost
issue? I mean, is there a role for the federal government to
play?
Ms. Wellman. My reaction is two--one is data. The federal
government can make data about spending much more accessible,
make it more readily benchmarked, get it in the hands of
governing boards and institutions and state legislators so that
the conversation is not just once every 5 years, but ongoing,
about where you are spending your money, where you can do a
better job. This is a topic that is way too shrouded in
technical detail and not accessible, so the feds have a role to
play there.
The feds also have a role to play in tackling the root
causes of increases in spending on benefits. One of the biggest
areas of growth in spending is health care benefits, and you
know that conversation, and I will not belabor it here. It goes
well beyond the jurisdictions of most education committees or
budget committees, and it is a complicated topic because
everybody lives with the consequences and nobody controls it.
But if the federal government could get the rate of increase in
health care costs down, that would make a huge difference.
Mr. Bishop of New York. Okay. Dr. Bassett?
Mr. Bassett. Congressman, you put your finger on a main
issue. Personnel costs are an enormous part of the budget, and
even though all of those other factors have gotten more
expensive, still a large part of our budget comes from
education being so labor intensive.
I would love to come up with creative ideas to allow a
professor, for example, to work with more students per
professor than they do now, while still keeping the quality of
the student-student and student-faculty interaction at the
level that we all would want in going to college, rather than
it simply becoming a kind of factory there.
I think health care costs are one factor there. There may
be, however, certain kinds of pedagogical advances we can work
together on that will help us change some of those ratios
because I agree, 10 years from now, it may not be us back here,
but somebody is going to be back here raising those same
issues.
But it is so personnel intensive, the value of higher
education is personnel intensive, that unless we can find some
ways to make ourselves more efficient on the personnel side--
and I say that knowing this can lead to reduced quality--we are
not going to get our arms around this completely.
Mr. Bishop of New York. I have very little time left. But,
Dr. Alexander, you have made several comments this morning
about the importance of focusing on needy students and seeing
to it that low-income students represent the first priority,
both of the federal government and, I believe, the state
governments.
Given that, can I just ask for your opinion? We have moved
now to a merit-based component to Pell, some, I think, $400
million. I am not sure what the number is in the current year.
What is your thought on that? Is that the best use of a federal
resource, to add a merit-based component to Pell, or would that
money be better spent on additional need-based aid?
Mr. Alexander. I think there is a merit-based movement in
the United States that I think is also a backlash to the public
and private tuition increases, and you are seeing this backlash
in many forms, in HOPE scholarships in the State of Georgia. I
know we have a presidential candidate who is advocating a
national merit-based scholarship. I am very concerned about
this direction as a nation, and many governors have been
elected on the platform of merit-based scholarships and
developing merit-based scholarships.
I think, actually, the best use of funds, I believe, at
this time is to create what I have been mentioning earlier
today and discussing, is to create ways to reward the
institutions and states for maintaining their commitment to
public missions, which means enrolling, supporting, retaining
and graduating low-income students, and I do believe that until
we really address this issue that we are only going to see
marginal gains down the road for higher education, and we will
have another committee meeting at some point down the road.
Mr. Bishop of New York. Thank you very much.
Chairman Miller. Okay. Mr. Sestak?
Mr. Sestak. Thanks, Mr. Chairman.
My first question--I think both the chairman and I walked
in while he was talking--may have already just been addressed
here, but to make sure--2 weeks ago, I met with about a dozen
presidents of universities and colleges in my district for a
second meeting on the cost growth because it is what I heard
throughout the campaign when I ran.
And their statement was not unlike yours, Mr. Alexander,
that we really need to grow need-based states, so to speak, you
know, where the federal government's role here truly might be a
carrot, yes, but a stick where the money in the grants or the
loans, whatever we give to the states, actually forces them to
focus more upon the lower income, the needs, and they say that
because it was a mixture of private and public universities and
colleges. There has been in my state of Pennsylvania a movement
of those who can afford private, you know, going to state where
they can more readily afford it.
And so is that what you are talking about, is that it is
conducive to the states to get more money or to get money only
if X amount is going to needs-based. Now I know in my state we
have so much set aside, but it is not near what it might be. Is
that what you are suggesting?
Mr. Alexander. Well, this is where the Pell grant
differentiates from a lot of state need-based programs. The
devil is in the details of these need-based programs. The Cal
Grant B, for example, is very income-based. The Cal Grant A is
perceived as a needs-based program, but is a very merit-based
program.
I think one mistake we make in higher education is not
assuming that $85 billion in state appropriations are not need-
based support for students to keep costs low because that is
truly, I think, the biggest issue, the biggest issue for us,
and the dollars that the state puts into----
Mr. Sestak. I apologize. You said it better than I did, is
that the attraction to federal monies is that their
appropriations is going towards need-based more. Is that
correct?
Mr. Alexander. I am sorry?
Mr. Sestak. The incentive from federal legislation might be
that the $85 billion that they are appropriating is more
focused on need-based because, if it is not, they would not get
X amount. There would be an attraction in the federal law.
Mr. Alexander. Well, it should be as state appropriations
are supposed to protect equal opportunity and to make sure
costs are staying low. That is the main purpose, to offset
those costs and to make sure that public institutions do not
grow, escalate their increasing costs for higher education.
So, in many ways, it was devised, state appropriations, for
higher education. Initially, it was--certainly in California
until the 1980s--to provide free education for as many people
as possible. So protecting those resources and ensuring that
states remain committed to those resources is, I think, the
biggest concern for the public sector.
Mr. Sestak. But you can do that by helping to make federal
aid dependent upon focusing more of their $85 billion towards
need-based. Is that wrong?
Mr. Alexander. You can, and, you know, this is not
precedent setting, by the way. The SSIG program was started to
encourage states to adopt need-based programs in 1972 when only
six states would allow them because of constitutional issues of
public-private mixes, and rapidly 50 states quickly adopted
them within the next 10 years.
The difference now is that many of those need-based
programs, some would argue might be more institutional need as
opposed to student need, and the cost of attendance or the
sticker prices that drive a lot of that aid can be fluctuated
and can advantage higher-cost institutions and students who
pick higher-cost campuses as opposed to focusing in more need-
based areas based on students and access and real need and
income.
Mr. Sestak. Ms. Wellman, in your testimony, you talked
about incentivizing from the federal levels student attainment,
and my limited understanding is that--and you kind of focus on
not just getting them into college, but making sure they
graduate--the best predictor of completing college is actually
the income level of the family and if the parents have a
college degree.
And so I was taken by your testimony, it is just not
getting them there, but how do you get them through, because if
you are lower income, there is less success. Has anyone thought
financially about a stepped type of an approach in aid so that
if you complete your freshman year, there would be a more
attractive loan grant or whatever to the second year, the third
year and the 4 years, or that does not play in the field that
you are----
Ms. Wellman [continuing]. For the year first step was
financial aid programs to front load grants, to provide the
greatest assistance at the freshman year, or to increase
granting aid as the student progresses through the degree. So--
--
Mr. Sestak. Any studies of how well that does----
Ms. Wellman. I am not aware----
Mr. Sestak [continuing]. Particularly the one where you
attract them to the next year?
Ms. Wellman. I am not aware of one being systematically
implemented with the goal of getting students through to
graduation. In fact, I believe the tendency, the general
pattern is for students to move away from grant increasingly
toward grant-loan mixes as they move through their degree.
And I think that one would want to look not just at student
aid packages to encourage students to move through, but
institutional financing strategies to move students through.
You would want to do it on both sides.
Mr. Sestak. Thank you.
Chairman Miller. Mr. Hare?
Mr. Hare. Thank you, Mr. Chairman. Thank you for holding
the hearing.
I have mentioned the City of Galesburg, Illinois, many
times here. It is my home town, and it is a community that lost
1,600 jobs when the Maytag plant went to Mexico.
The challenge that I have is ensuring that the workers
receive training and other assistance that they need to find
new employment, you know, equal to the wages that they had,
and, unfortunately for these workers, like many nontraditional
students, they must balance, you know, school, family, part-
time, full-time work, and the federal student aid process, like
FAS, tends to steer colleges towards offering programs that
make it difficult for nontraditional students to access and
complete college.
So my question for the panel would be--one question would
be--what changes do you think we can make in Title 4 of the
Higher Education Act to help dislocated workers and other low-
income adults have access to college?
Ms. Wellman. You know that better than anybody.
Mr. Alexander. I think you are correct in asserting that
the programs were really never designed to help those types of
students. We need to carefully analyze the limitations and
barriers of displaced workers, adult learners, part-time
students and students where the families that are working full
time. We do need more student-friendly programs of that kind,
both by state programs as well as in federal discussions and
federal directives.
The only way we are going to start addressing these large-
scale numerical issues that I think that we are all dealing
with and starting to slip in OSCD and just about everything is
to address the adult worker issues, displaced worker issues and
adult learning opportunities and graduate learning
opportunities even from community college to graduate school.
Mr. Bassett. One of the strengths of American higher
education, one of the special strengths, is that it is just
about the only country where if you do not begin college at 18,
you still have a chance to begin college at 32, but that is
only part of the workforce need that really you are addressing
there. There are people that come back. They need retraining.
We need to think about this on a statewide and regional
basis, how we are really meeting our workforce needs with our
educational system there and particularly for the older worker,
and I think President Alexander is right. Some of these things
were not set up with that in mind, and we need to rethink them.
Mr. Hare. Thank you.
Dr. Wellman, has the Delta Project looked into the costs
and trends of higher education in rural communities? You know,
I represent a large rural area, and I would imagine that these
areas struggle with unique challenges that may not be seen in
other parts, especially in terms of access or availability,
resources and outreach. Could you speak about specific data for
students who live in rural or geographically isolated areas?
What does the data tell us and how can Congress address the
challenges of the population to people in the rural
communities?
Ms. Wellman. I do not know. I do not know, and we can find
out. We just put the data together to allow us to answer
exactly questions like this. So we will look at that, and I
will tell you what we find.
Mr. Hare. Okay. That would be great.
I am sorry. Go ahead.
Mr. Alexander. Having been president of a rural institution
in Western Kentucky for 4 years, there are significant
differentiated issues in travel. The administrative costs, when
most of the rural schools have about half the student
enrollment that larger schools have, the economies-of-scale
issue--larger institutions in more urban areas will have more
resources for a number of reasons, and many of those rural
areas also have to reach out into other communities through
extended campus creations to address many of the issues that
you just began to talk about in the first question.
Mr. Hare. Just one final thing, I would be very interested
if maybe you could get back with me or at some point maybe we
could talk about--when we were talking about the first
question, some of these programs for dislocated people--those
are the kind of workers that are coming back into the
workforce--because it is really difficult for them, and, you
know, their lives have been turned upside down, and we are
trying to get them back up on their feet, and they have health
care to deal with and families and everything that goes with
losing your job, and so if there is anything I can do to help
or some ideas that you have and you can get them to me, I would
love to have them and maybe we could proceed from there.
So thank you very much, Mr. Chairman.
Chairman Miller. Mr. Yarmuth?
Mr. Yarmuth. Thank you, Mr. Chairman.
And I would like to offer my welcome to Dr. Alexander and
tell him we miss him in Kentucky. Thank you for everything you
did.
And for those who are not as familiar with you as we were
in Kentucky, he took an institution in great need of help and
elevated it to a considerable height.
So thank you for your service to Kentucky.
One of the things that I am curious about because we heard
earlier in the discussion the issue of proprietary schools--and
I guess from kind of a very uninformed position, you would say,
``Well, there are schools that know how to make money out
there,'' because there are profit-making schools out there, and
you said the data was not very good on proprietary schools, but
what is it about proprietary schools that allows them to
control costs--I guess maybe this is a softball and a free
shot, if you want to take it--allows them to at least control
costs apparently better than nonprofit institutions do.
Ms. Wellman. I am on the board of a proprietary school so I
can speak to that model, and I think it is a typical one. It is
a very different cost model than in a public or a private
institution. The institution and the delivery system are very
different. Faculty are used only for those things that only
faculty will do well. They are used to teach.
There is a much stronger complement of professional staff
that put a lot more into student services and counseling.
Students are given fairly aggressive curriculum plans and
expected to stick to them, so the curriculum is more rigid and
standardized. They use data. If students get in trouble, they
get in touch with them fast.
So they are very bottom-line oriented, they watch how they
spend their money like a hawk, and their most expensive
investment is in faculty are used only for the purposes that
only faculty will do, whereas in other institutions, faculty
are expected to provide a whole host of services, including
curriculum development.
In the proprietary sectors, the curriculum is developed
centrally, modified by the faculty, but it is a very different
cost model.
Mr. Yarmuth. Well, I guess my follow-up would be for both
the other members of the panel, is to what extent, if any, are
those models applicable to the nonprofit sector, and is that
something that institutions are trying to examine?
Mr. Bassett. We are learning about how the for-profit
sector works, the proprietary sector works. They are often very
focused in ways that most of your universities are not focused
on, certain kinds of curricula. They do not have the breadth.
They, obviously, do not have the research dimension that some
universities have as well. A whole set of student services--
some, they do spend time on. Others, there is not that sense of
the larger student, the whole student that colleges focus on.
I am interested in learning from any sector I can, whether
it is the for-profit educational sector or the business sector
generally or other countries, but I think some of it is new
enough so there is very little longitudinal kind of data
available as to how effective they are. So we will keep our
eyes open and learn what we can and use what is applicable.
Mr. Alexander. If I could add just, first of all, it is
interesting that these institutions are the most reliant on the
student aid when you look at percentages of students getting it
and acquiring amounts and percentages.
Secondly, they rely on part-time faculty, quite simply. I
think Phoenix has 10 full-time faculty members. I think that
makes, what, a 10,000 to 1 faculty-student ratio. We are in
some ways moving in that direction, and the College Board study
showed recently that in the last 20 years, public and private
higher education have gone from 53 percent full-time faculty to
40 percent full-time faculty. So, in some ways, we are already
moving in that direction.
We have not assessed the consequences of it, some good,
some bad. In addition to that, the for-profit sector picks
fields that they think they can succeed in and make a profit
on. I am still waiting for the for-profit universities to
produce 500 engineers a year. It is an expensive field of study
that our nation needs very badly in very high-demand fields.
Nursing, other medical services, other high-demand fields might
not make them as much money. I know in the Cal State University
system we produce 9,000 engineers a year for the economy of
California. The high-demand fields are being neglected in some
of those areas as well.
Mr. Yarmuth. Probably a problem with philosophy, too.
One quick question--I hope it is a quick question--one of
the statistics I saw in the testimony was that the percentage
of students who are on Pell grants actually graduating is
relatively low, and I have some legislation actually to try to
help create a grant program to provide support services for
Pell grant recipients. How much does that noncompletion rate,
that turnover of students, add to the overall cost of the
system? Is it a factor in cost?
Mr. Alexander. It is a very big factor in terms of remedial
education that we provide for students, in terms of advising
structures that we provide for students, and we are so heavy on
Pell grant eligible students on our campus, with, as I
mentioned, nearly 40 percent, it costs us a lot of money to
particularly get them from freshman to junior year, and it
takes a lot of attention because they are coming from schools
where they have not had the backgrounds in many ways, and we
have to get them college ready.
We are working with our public schools even prior to
getting to college, which costs resources for us, to get them
college ready even prior to coming to the institution. So this
is a very costly item. We know it is costly in K through 12
schools. We have never really recognized it, though, in terms
of what does it cost the institutions to get these students
from freshman year to senior year or transfer junior year to
senior year.
Mr. Bassett. I agree. It costs an awful lot. There are two
reasons why students do not continue and complete college. One
is financial. The other is the rigor of their high school
education. They come in unprepared. They do not stay. Either it
takes remedial help or they do not stick with it, and that is
something we cannot ignore, is the connection between the K
through 12 education issues and higher ed.
Chairman Miller. Mr. Payne?
Mr. Payne. Thank you very much. Thank you for having this
very important hearing, and I hope we can really come up with
some ways that we can give more support to the whole question
of costs.
You know, there are a number--I missed most of the
testimony, but did hear the HOPE scholarship mentioned about
and I hear a lot of acclaim given to the HOPE scholarship
because it is sort of merit, and a youngster doing all right in
Georgia really has access to these schools.
However, if you evaluate the HOPE scholarship, which is not
based on income--the money comes from lottery and other kinds
of gaming that, unfortunately, the lower end of the community
participates in, and, as we all know, people that are doing
worse sort of are looking to try to make that big win, and so a
disproportionate amount of people who cannot afford the lottery
play it.
However, a person who might make $100,000 a year, $200,000
a year as a couple or whatever, their child can take a test and
get the HOPE scholarship, a person who might have gone to some
other school and paid the tuition, but why not stay in
Georgia--they have some good colleges--and let the public pay,
let these people who play the lottery pay for my education? You
know, I have not looked at it and, if I am wrong, tell me.
And how do you see the kid who goes to the schools where
all the children are left behind, so to speak? How do they
compete, even though I understand the score is based on that
school? However, once they get into the college, the diluted
education from the poor schools are going to have the person
wash out probably because they are going to be unable to
maintain the scholastic level that they need.
Maybe the one that mentioned the HOPE scholarship might
want to deal with that. I am just curious.
Mr. Alexander. I think the merit-based scholarships have a
couple distinctive elements. In states that readily have a
drain brain impact, like Kentucky, prior to the merit-based
scholarship. It does have greater value to a state that has
traditionally lost many of its students and many of their
investments from kindergarten through high school. For states
that have not been losing them, it puzzles me why they were
incorporated in the first place.
With regard to how they are financed, I think that in
states that truly need them to keep the brain drain from
leaving, then perhaps they should be funded through a much more
progressive system. The use of lottery money to provide
resources to merit-based scholarship programs perhaps is the
most regressive funding structure we have ever adopted in
American higher education.
Mr. Payne. Thank you very much. I agree with you. Of
course, that is why I asked the question.
My last question: It was mentioned by you, Ms. Wellman, in
your written testimony that--you point to productive problems
at colleges and universities that create higher costs. Number
one, could you just quickly define the productivity problems,
and how do you think that this problem arises and what does it
mean to the institution?
Ms. Wellman. The short definition of a productivity problem
is that we do not know how to reduce spending without
compromising quality or access, and in order to meet the goal
of increasing attainment without compromising quality or
reducing access, we have to think about the production process
very differently and getting students through to the degree,
and there are ways to do that if we make the focus on degree
attainment and resource use to get the student to the degree.
It is not about cutting costs. It is about using the money to
accomplish degree attainment.
Mr. Payne. And just finally on that HOPE scholarship, the
original purpose of HOPE-type scholarships, the one that they
have in Georgia, is primarily to try to keep Georgia students
in Georgia or keep Kentucky students in Kentucky that they do
not go to other states and remain there or to stay there at the
end of the day, more or less. That is what it was supposed to
be.
Mr. Alexander. Was Georgia a net loser of students prior to
the program?
Mr. Payne. Right.
Mr. Alexander. Okay.
Mr. Payne. Yes. Well, I really do not know, but I suppose
they were and that may be one of the reasons that they did it.
All right. Thank you, Mr. Chairman.
Chairman Miller. Mr. Scott?
Mr. Scott. Thank you. Thank you, Mr. Chairman.
A question was asked about the proprietary schools, but it
is my view they have a different message, a different mission.
They are focused on getting a specific job. You come in, you
get trained, you get a job. And it is just focused on that.
They change the situation when they feel like it. They do not
have tenured professors, academic freedom, research, college
life, all the extracurricular activities and everything. And
essentially it is just more expensive to educate the entire
person holistically than train somebody for a job, and,
actually, you are just getting what you are paying for, and you
make your choice.
I guess the question along those lines--I guess for Mr.
Bassett and Mr. Alexander--we have shortages in certain career
fields. Are you not fulfilling those positions because they are
more expensive to do? Do you find that you are, because of
financial considerations, having to have more slots in less
expensive fields rather than the more demanding fields?
Mr. Bassett. I do not want to speak for President
Alexander, but I think he has tried to say that he is
addressing those needs, actually, in areas like engineering and
nursing.
I think most universities are trying to address those needs
in terms of their own capacity to do so. We do have a problem
in education in America where fewer and fewer American students
seem to be going into science and engineering to begin with,
and, therefore, companies are hiring more and more of their
engineers from India or China or somewhere else, and that is an
issue we have to take back to K through 12 as well as higher
ed.
But I think in the nonprofit sector, both publics and
privates do try to address the workforce needs in those areas
up to their capacity. If they do not have the funding in areas
to add engineering programs that they need to or nursing
programs or teacher programs--we are certainly not attracting
enough people into teaching, at least high-quality people into
teaching--I do not think there are many universities that would
not try to help solve that problem if they have the capacity to
do so, but I defer to my colleague here.
Mr. Alexander. Well, I think you have begun to address
these, I think approximately so, creating incentives, the Teach
grants, the SMART grants. The SMART grants are, I think, funded
at about twice of what is being spent on them because we are
not getting students in the SMART grants, but the Teach grants,
I think, will help. We are already using Teach grants.
I guess the question is: We know it is far more expensive
to educate an engineer than it is a journalist or a historian.
We in California are not differentiated by state appropriations
either. But I can say from our perspective that we are working
as hard as we can to meet these high-demand fields and to
provide the workforce for California through these areas.
The one challenge that we have that was brought up a little
earlier, Congressman Petri brought up, was accreditation. Some
accrediting bodies like high demand because it means high
salaries. So engineering insists that our engineering students
need 5 years of college education to get through the
engineering curriculum. You need 5 years to become a speech
pathologist, to be certified as a speech pathologist. Thus, our
public schools suffer by not having enough speech pathologists,
and our health care agencies suffer by not getting enough
speech pathologists into the arena.
Sometimes we face some internal issues within ourselves
within academe to keep that demand at a very high level, while,
at the same time, we are trying as rapidly as possible to get
more students into these areas so that we can provide the needs
for society.
Mr. Scott. Thank you.
I have heard substantial a number of low-income students do
not go to college because they cannot afford it. What would the
Pell grant have to be to eliminate the financial barriers for
low-income students getting to college?
Well, let me ask another question. [Laughter.]
Mr. Alexander. We range from $3,000 a year to $50,000 a
year now. The range is quite expansive.
Mr. Scott. Let me get another question in. I think Mr.
Bassett indicated some colleges have endowments. Others do not.
Is there any way through technical assistance or otherwise that
we could help colleges build their endowment?
Mr. Bassett. Help colleges build their endowments?
Mr. Scott. Right.
Mr. Bassett. They are doing a pretty good job of building
them right now, I would say. You know, the question came up as
to whether colleges should be forced to spend more of their
endowment or something like that. Endowment and annual giving,
like tuition, are all part of a revenue stream that you are
trying to put into manage your college there.
I think the biggest change that has happened in fundraising
and seeking endowments is how the public sector has found the
need to create foundations to try to build their own endowments
and build their annual funding stream, both to improve quality
and to make up for the lack of state funding there.
I think if the tax policies are not in place to encourage
people to give to endowments, we probably are disincentivizing
people from increasing college endowments. But at the moment, I
think most colleges are working very aggressively to increase
endowments.
Mr. Scott. Well, thank you, Mr. Chairman. I think he just
came out in opposition to the repeal of the estate tax, but I
was not quite sure. [Laughter.]
Chairman Miller. Mr. Hinojosa?
Mr. Hinojosa. Thank you, Mr. Chairman.
My first question is directed at Dr. Bassett. Should
private colleges and universities participating in the federal
student aid programs be obligated by Congress to enroll a
certain percentage of Pell grant recipients?
Mr. Bassett. Should those private colleges be required to--
I did not get the last part.
Mr. Hinojosa. Should they be required to enroll a certain
percentage of Pell grant recipients?
Mr. Bassett. Well, to some extent, of course, the number of
Pell grant recipients that we enroll depends on the number of
Pell grant potential recipients that apply, and assuming that
the same qualitative standards are used for them as would be
used for all of the other students, we would be enrolling and
funding with our own private scholarship dollars up to the
level of need all of those students. The only thing we could
not do is to require people that do not want to come to our
college to apply.
Mr. Hinojosa. No, you do not have to require, but you could
recruit. You can recruit down in South Texas where the
population is about 84 percent Hispanic and where we have
schools that are listed in the top 100 best high schools in the
country. But if these private schools do not go out, which they
never do--the only ones that really go out there to recruit are
more of our public universities.
Mr. Bassett. Well, I would love to have more of those
students come to Clark University. I cannot speak for all of
the other privates. As I think I said earlier, we probably have
a smaller percentage of families making over $100,000 than any
of the other privates with which we compete for students. So we
are happy recruiting those students.
It gives us also greater diversity, which is one of our
primary goals, is to increase the economic diversity, the
ethnic diversity, the international diversity on campus. So
that would be very much in line with our philosophy.
Mr. Hinojosa. Well, we have a large pool, and many,
especially the girls, wind up staying somewhere close to home
because many of their parents prefer to see them stay within
the region. But if somebody comes out and recruits and gives
them all sorts of information, maybe that could be turned
around.
Mr. Bassett. We will be there.
Mr. Hinojosa. My next question is for Ms. Wellman. Some
public and private institutions have pursued a strategy of
charging higher tuition to be able to fund higher institutional
aid. In your view, what is the impact of this type of policy on
the enrollment of low-income, first-generation college
students?
I cannot hear you.
Ms. Wellman. Good question. I think it is a different
experience in different institutions. In general, the upper-
income students respond better to that than low-income
students. But it is a mixed bag.
Mr. Hinojosa. Yes, Mr. Alexander?
Mr. Alexander. I thought I would never see the day when a
public university would actually charge all students the full
out-of-state rate and then turn around and give what they call
in-state institutional aid scholarship awards to everybody who
lives in the state to offset the difference between the two.
But that happened about 3 years ago at Miami University in
Ohio.
I think this is a dangerous trend, and I think it is
devastating for low-income students, and it chases them into
jobs earlier than they should be, and it just limits their
opportunities in ways that we still have not done enough
studies to fully understand.
Mr. Hinojosa. Thank you for that advice.
Mr. Alexander, since I have your attention, Title 3 and
Title 5 institutions educate a large percentage of low-income
minority students. I can tell you that easily 60 percent of all
Hispanic students are in HSIs, and that is a fact. These
institutions tend to be low cost and low resourced. Could you
please elaborate on how your proposal for a cost of education
allowance could benefit students at these minority institutions
of higher learning?
Mr. Alexander. I believe it would benefit those
institutions, and it would also create incentives for other
institutions to start enrolling those students as well, and
that is, I think, two-faceted.
The first is that those institutions need additional
resources, and if this program had been adopted initially in
1972, we probably would not see as many institutions that have
moved away from low-income student populations as we have
today. That incentive is very important to help those
institutions not only enroll, but to retain and succeed with
those students.
We are an HSI at California State University, Long Beach,
and 16 of our 23 universities are HSI institutions. We know how
important those resources are and the programs that we need to
put in place to help those students succeed on our campus. They
cost money. We need help in providing those types of avenues
and resources for those students.
And just like in the K through 12 sector, we know at the
federal level that these students require more additional and
augmented assistance, and it would be a very good day for us to
see when the federal government also recognizes additional
assistance to those institutions that are committed to----
Mr. Hinojosa. We recognize it, and we are trying and,
hopefully, when we do the reauthorization of higher ed, there
will be a component where Title 5 will have a Part B for
encouraging Hispanic students to get into the graduate
programs, master's and Ph.D.
Do you see how you could utilize that state money that we
would put out so that we could get more students? In many
cases, some have 5 years experience and they just need a little
bit of help to get into the master's or the Ph.D. programs.
Mr. Alexander. It certainly would help and, I think, as we
work to educate more and as we work to increase--we were sixth
in the nation in number of Hispanic students graduating from
our institution. We do have hundreds and hundreds of more
students seeking graduate opportunities that are Hispanic, that
are African-American, Asian-American, Cambodian and others.
These resources are very important for us to help provide the
type of programs that encourage them to pursue higher levels of
educational attainment.
Mr. Hinojosa. It is good to hear that.
Thank you, Mr. Chairman.
Chairman Miller. Thank you.
Mr. Wu?
Mr. Wu. Thank you, Mr. Chairman.
On those occasions when I ask questions, they are genuine
questions and they are very short to permit long answers, and I
just want to say in advance that this time I intend to talk
because I want to talk about three very different topics and
then invite your comment on any of the three.
First of all, the issue of outreach about financial aid,
the most well-attended events that I have done in my
congressional district are about college financial aid. Parents
and students come. There is an insatiable demand for
information about how to get college financial aid, and, you
know, I could do college financial aid fora all the time, I
mean, just do nothing else, but there are other things that a
congressman needs to do at home also.
So I would just encourage you all to do aggressive outreach
about what college financial aid is available because so many
people just do not know what is available, and programs may
exist. They do not do any good if people do not know about
them.
Number two, a potential source of nongovernmental revenue
for college financial aid, not within the jurisdiction of this
committee--we almost got this passed in 1999--is an H-1B Visa
proposal that couples high-tech workers with college financial
and does so in the following way: If you are IBM and you want a
H-1B worker, you come to an accredited college or university,
you plunk down an amount of money equal to the then maximum
Pell grant, you get a ticket from the college. The college is
obligated to use 100 percent of that money for financial aid.
There is no administrative fee to be drawn out from that. You
take the ticket to ICE, and you get your worker in 15 days.
Companies typically spend $100,000, $150,000, $200,000 to
recruit a worker. To pay an additional $5,000 per year to get
their H-1B worker is not a big deal for most of these high-tech
companies, and the expedited processing has not worked in many
other arenas at Immigration. I believe it would work in this
instance because it turns out that roughly 80 percent of H-1B
workers, I think, are already in the United States at American
institutions, and all the background checks can be done because
the person is available to be checked up on.
This was a way of leveraging federal dollars and increasing
college financial aid, making H-1B visas more palatable by
coupling it to educating American students.
And third and last point, as we approach HEA
reauthorization, just as our college financial aid outreach
programs are our most well-attended programs in my
congressional district, the most mail that our office has ever
gotten has been our work on the textbook pricing issue. Mr.
McKeon and I asked for a GAO study on textbooks, and it turns
out that materials and books average out to close to $1,000 a
year per student, and if you are attending Harvard or
Georgetown, $1,000 may not be a whole lot more money, but if
you are at Portland Community College or at a CSU, $1,000 is a
significant question.
This is a matter of access and fairness because the reason
why the issue came to our attention is because students got on
the Internet and they found that the same book that is
available at their bookstore for $150, you could get at Amazon
U.K. for $50, and you can order it, ship it, and save a lot of
money.
Now a lot of different--and as I said, we have gotten more
mail and email traffic on this issue, and we have gotten it not
from my congressional district----
Chairman Miller. You are going to give them about a minute
here to respond.
Mr. Wu [continuing]. But we have gotten it from all over
the country. Professors have a role to play in this. If they
put out their syllabus early, then they can order. Students
have a role to play in this. Bookstores have a role to play in
this. And the publishing industry has a role to play in this.
The red light has gone on, but if the chairman will indulge
the witnesses in commenting on any of the----
[Laughter.]
Mr. Wu. I will stop at this point.
Mr. Bassett. I was going to start the response by
responding to your comment on financial aid outreach because I
think the student that comes from a first-generation college
family and less wealthy is four steps behind at the beginning
than the student coming from a college-educated family and
probably going to a high school with a number of guidance
counselors. The first student may have one guidance counselor
for every 600 students.
I would love to see either a nonprofit or some other agency
set up specifically to help, going beyond what is in U-CAN, and
I know we have our Web site, which is very important here, in
helping to provide some of that personalized guidance
counseling on what is the right fit for this student with the
right college. So, on that issue, I am with you 100 percent.
Mr. Alexander. I guess I get the textbook issue then. Okay.
It is a complicated problem. Right now in the CSU, we are
looking at ways of rental textbooks. We are looking at
textbooks, and we need actually the help of the Congress to put
pressure on publishers to put their versions online in
affordable ways for students. Not only online, but I think
there are only three or four publishers that are controlling
basically the whole market of textbook production. We are quite
frequently accused of getting lots of money from these
textbooks in our own bookstore, and our margins are virtually
nonexistent.
It is a very controlled market. Our faculty do play an
important role in getting our faculty to start using
alternative sources, getting them to use Internet sources and
others. It is a complicated problem that we are all moving
into, but with your attention on this issue, we can certainly
put some pressure on the publishers.
They do not necessarily want to put all this online because
they lose a lot of money, too. So the more that you could work
with us on this agenda would be very important because it is
over one-third of our entire cost of education.
Chairman Miller. Thank you.
Thank you, Mr. Wu, for your questions.
And we are giving a lot of attention to the textbook issue
in the consideration of the HEA.
Ms. Wellman, in your testimony on page 6, you refer to the
transparency issue and reference Secretary Spellings'
commission and you mention at the bottom there in that
paragraph, ``Spending information is almost completely absent
from state report cards and on institutional Web sites offering
consumer information. The focus,'' as you might expect,
``remains on tuition and financial aid, not on how money is
spent.''
In the next paragraph, you say that ``There is no evidence
that the resources are going to pay for student success or
increasing degree attainment, and low-income students are most
at risk.''
What are you telling us there?
Ms. Wellman. Two things. One we are not paying attention to
spending, institutions are not looking hard at where the money
is going, and that we can do a better job with data to get that
information as readily accessible as we are now getting
information about tuition and financial aid and that when we do
that, it will begin a conversation within the institutions
about where the money is going and whether the money is going
where it needs to to enhance student success.
Chairman Miller. How do you do that?
Ms. Wellman. Well, the federal government can help with
IPEDS. You can do it by requesting states, as true incentive
resources or the condition of receiving funds, to build
accountability systems that ventilate costs, attract
expenditures and that identify where the money is going.
So I think it is about transparency, and it is about
documentation.
Chairman Miller. Not to put you on the spot, but you say,
``There is no evidence that the resources are going to pay for
student success or increasing degree attainment.'' I sort of
thought that was the theory of why they would show up at the
campus, but----
Ms. Wellman. The places----
Chairman Miller. What does the evidence tell us?
Ms. Wellman. The evidence tells us if you look at where
spending is increasing in higher education and then ask what is
that spending going is for--Do we see more degrees produced as
a result? Are we seeing more students get through to graduate
school? What are we buying for it?--there is zero evidence of
increased degree attainment. We are not seeing evidence of poor
student access increasing. The evidence about learning is not
good, as you know, but--what we can tell about learning
results.
So it appears to be increasing the intrinsic quality of the
educational experience. These are nice places to be. Is it
educationally necessary? Is it bottom-line quality? Is there a
better way to do it? We think there is.
Chairman Miller. Well, there was a suggestion--and I do not
suggest that this is a prime driver--in talking to some people
yesterday who are deeply involved in these issues--said that,
you know, students expect a different environment. They expect
health facilities, common facilities, quality-of-life
facilities, if you will, on campus and campuses are judged by--
--
Ms. Wellman. I think in the high-end institutions----
Chairman Miller [continuing]. What they----
Ms. Wellman [continuing]. The amenities race is part of
what is going on, and yet it is a leadership responsibility if
there is a will to do it, to make some choices to dial that
down and to hold the line as much as possible on increasing
spending and to put every dollar possible into educational
quality. Otherwise, the market now is going to continue to push
us in this direction. So we are spending more, and we are not
necessarily getting better quality or results because of it.
Chairman Miller. Gee, that is not very good news.
Ms. Wellman. Well, like anything else in higher education,
it is not always true. So we can find good examples on the
other side.
Chairman Miller. Well, thank you.
Ms. Wellman. It is a pattern that is disturbing.
Chairman Miller. I feel much better now. [Laughter.]
Well, it is a very serious concern, I think, because it
sort of goes to the question, ``What is it you are buying with
this expenditure of taxpayer dollars?'' People work very hard
to pay those taxes, you know, and so I think would think what
we are trying to facilitate here is the attainment of that
degree, hopefully accompanied by the most knowledge available
in that period of time, and you are suggesting that the trend
is, in fact, going in the other direction.
Ms. Wellman. The trend----
Chairman Miller. That is a very troublesome trend, I would
think, for the shareholders who are financing those
institutions, and it also looks like a trend where, I mean,
conceivably, I guess you could end up losing market share
because if you make it more difficult to get degree attainment
or it is not happening, I guess people will make other choices.
I do not know.
But, right now, you would not have the information
available to know whether you would want to pick another system
that may be more efficient, more resources dedicated to your
attaining the degree.
Ms. Wellman. Yes. It would require a cultural change to
create----
Chairman Miller. Most people think, you know, that that is
the mission of the system, don't they? They would think the
mission of the system is degree attainment and the resources
necessary to do so.
Ms. Wellman. Well, yes, sir.
Chairman Miller. I do not know. I mean, maybe I am wrong.
Maybe we----
Mr. Alexander. I think if you----
Chairman Miller. Buyer beware. I do not know.
Mr. Alexander. I mentioned earlier I think if you just
aggregate this data and the expenditures, you will find out who
is doing a good job and who is not, and you will find out real
quickly who is serving more students. You will find out which
institutions are actually chasing perhaps what we call prestige
maximization. I think the data is there to understand how these
expenditure trends have grown and have not grown. It is not
consistent throughout the United States.
Ms. Wellman. Yes.
Mr. Alexander. There are many systems that are doing a very
good job with more students than they have ever had and they
have graduated more students than they have ever done. I know
we graduated more students than any other system in the history
of American higher education last year with 90,000 graduates.
Others are doing well, but I think these data are very
important in understanding where you can point your finger and
understanding who actually is serving these public needs in
greater ways.
Mr. Bassett. If I may take a little different slant on it,
our retention rate and graduation rate have both improved
recently. I have made at least four different kinds of
investment to try to make that happen: an investment at Center
for Excellence in Teaching and Learning which has worked with
faculty on teaching; an investment in an advisor to work
specifically with first-generation and minority students to
improve their retention rates; an investment in making more of
our kind of part-time teachers full-time so they are always
there for students. I also know that the incoming students have
been a little stronger during that period.
What I do not know is which of those four things made a
significant impact on our improved retention and graduate rate.
It is hard to disaggregate them to learn exactly what made a
difference. So it is not easy to do the kind of research always
that we need to do on this, too.
Chairman Miller. Do you want to say anything?
Well, thank you----
Yes, David? [Laughter.]
Mr. Wu. Very briefly in the preparatory materials for this
hearing, there is reference to sticker price and net price, and
this is impressionistic, but I have seen this happen a lot.
When the sticker price is really high, you know, even though
more than 50 percent of students might have an institution
where they would be getting financial aid, I think a lot of
people self-disqualify, and I do not know how you get around
that, you know, because if you wind up advertising net prices,
you know, the parents who are paying full-price might not be
very happy, but somehow getting that information out is a very,
very important thing.
Ms. Wellman. I agree.
Mr. Alexander. I think that actually we have come a long
way from when this first was part of the discussion 4 years
ago. The CSU has in this document our net price, our sticker
price and our net price, and we have it for every CSU
institution, and we are going to make it available to every
family member in the State of California, and we encourage
other institutions, and we encourage you to ask these type of
questions of institutions as well.
Mr. Scott. Will the gentleman yield?
Mr. Wu. Yes.
Mr. Scott. You have sticker price, net price. You also have
cost, which is another figure. Do you publish that, too?
Mr. Alexander. We can publish costs. We could put our
$13,200 on here to demonstrate how much it costs.
Ms. Wellman. How much subsidy you get.
Mr. Alexander. Right.
Mr. Scott. Because you have the endowment and the other
income toward the cost to educate.
Mr. Alexander. Right. Well, Ms. Wellman raised that
question earlier, and we said certainly, if that is what people
want to see and people want us to do, we will certainly put
that on there as well.
Mr. Wu. I yield back the balance of my time.
Chairman Miller. Thank you.
Thank you very much for your testimony. I think you can see
from the interest and the questions of the members that this is
an issue that we clearly want to try and begin dealing with in
the upcoming legislation.
So thank you, and I hope that we may be able to continue to
call upon your expertise as we wind our way through these next
couple of weeks. Thank you.
The committee will stand adjourned.
[The statement of Mr. Altmire follows:]
Prepared Statement of Hon. Jason Altmire, a Representative in Congress
From the State of Pennsylvania
Thank you Mr. Chairman for holding this important hearing on the
rising cost of a college education.
On October 22, the College Board released its annual ``Trends in
College Pricing'' report. The report confirmed what many of us have
been saying, the cost of attending college is rising faster than
inflation.
In what is one of the most significant accomplishments of the 110th
Congress, we took a dramatic step towards making college more
affordable by enacting the College Cost Reduction and Access Act (H.R.
2669). This legislation will provide $20 billion in student financial
aid, making college more affordable for millions of students. As the
Chairman and members of the Committee know, it raises the maximum Pell
Grant award by $1,090, cuts interest rates on subsidized student loans
in half over the next four years, and provides loan forgiveness to
students who go into public service after graduation.
While we addressed the critical issue of affordability, we have not
addressed why tuition prices continue to rise. I look forward to
hearing more about the factors driving the constant increase in college
tuition and hope to learn what steps Congress can take to slow or
turnaround this climb in cost.
Thank you again, Mr. Chairman, for your continued attention to this
critical issue. I yield back the balance of my time.
______
[The statement of Mr. McKeon follows:]
Prepared Statement of Hon. Howard P. ``Buck'' McKeon, Senior Republican
Member, Committee on Education and Labor
Thank you Chairman Miller.
I'm pleased to be here this morning to discuss rising college
costs, an issue I have focused on since coming to Congress almost 15
years ago.
For too many years, it seemed I was alone in my concern about ever-
rising tuitions and their impact on students and families. That's why
I'm so pleased that Chairman Miller has convened this hearing and
joined me in asking the tough questions about how we can finally get a
handle on the skyrocketing cost of a college education.
Rising college costs are a difficult issue. There are no easy
answers. The higher education community is fiercely protective of its
right to charge whatever it sees fit, and taxpayers are expected to
foot the bill that families cannot by blindly increasing financial aid,
year after year.
I learned that lesson the hard way when I first proposed a modest
effort to address college costs at the federal level by shining a
spotlight on excessive tuition increases. The backlash was, speaking
frankly, both surprising and hugely disappointing.
Certainly some colleges and universities have taken steps to hold
down costs. Community colleges in particular are a low-cost option for
an increasing number of students and families. We have heard from
institutions striving for greater administrative efficiencies, and even
schools that allow students to rent textbooks, a small step that can
save students hundreds of dollars each year. But for every story we
hear about a commitment to affordability, it seems we hear dozens more
about exploding tuitions.
Today's hearing is a positive sign. Finally, it seems we are
reaching consensus that rising college costs are a real problem in
America. I'm hopeful that we can begin turning our attention now to
solutions.
Over the last four years I have refined my plan to address college
costs based on feedback I have received from the higher education
community. I have included provisions that recognize low-cost
institutions and modified how cost increases are calculated.
Ultimately, however, I do not believe it is too much to ask that
students and parents be given clear, understandable information about
how much tuitions are rising. And for those schools where tuition is
rising rapidly, at more than twice the rate of inflation, it is
reasonable for us to ask why, and what can be done about it.
It's no secret that I was disappointed this year when the majority
insisted on passing financial aid reforms through a process designed
for deficit reduction. I had a number of concerns about the policies in
that bill, but perhaps even more than that, I believe it was a
tremendous missed opportunity.
That bill added billions in additional support for Pell Grants--
something I support--but it did so without any accountability for
colleges and universities to do their part in the affordability
equation. I fear that by inflating federal subsidies without addressing
costs, we may inadvertently have made the problem much worse.
Will colleges simply raise tuition further, draining the value of
our Pell Grant increases? Will states spend less on higher education,
assuming the federal government has made up the difference? Will the
Appropriations Committee undercut the discretionary funding base of the
Pell Grant program, thereby erasing the increases we provided? I'm
afraid the budget bill may have been a losing wager.
While we missed the opportunity to provide meaningful solutions to
the college cost crisis earlier this year, I am hopeful that we will
not make the same mistake now. As we prepare to consider comprehensive
Higher Education Act legislation, I believe we must undertake a genuine
effort to address college costs.
I'm pleased to have this distinguished panel of witnesses here
before us. I want to thank each of you for your willingness to engage
in a difficult discussion. Your involvement, and the involvement of all
stakeholders, is imperative if we are truly committed to keeping
college affordable.
I want to thank Chairman Miller for holding this hearing and for
working with me and my staff on this important issue. I yield back.
______
[Whereupon, at 1:40 p.m., the committee was adjourned.]