[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
KEEPING COLLEGE WITHIN REACH:
DISCUSSING WAYS INSTITUTIONS CAN
STREAMLINE COSTS AND REDUCE TUITION
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HIGHER EDUCATION
AND WORKFORCE TRAINING
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. House of Representatives
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, NOVEMBER 30, 2011
__________
Serial No. 112-48
__________
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COMMITTEE ON EDUCATION AND THE WORKFORCE
JOHN KLINE, Minnesota, Chairman
Thomas E. Petri, Wisconsin George Miller, California,
Howard P. ``Buck'' McKeon, Senior Democratic Member
California Dale E. Kildee, Michigan
Judy Biggert, Illinois Donald M. Payne, New Jersey
Todd Russell Platts, Pennsylvania Robert E. Andrews, New Jersey
Joe Wilson, South Carolina Robert C. ``Bobby'' Scott,
Virginia Foxx, North Carolina Virginia
Bob Goodlatte, Virginia Lynn C. Woolsey, California
Duncan Hunter, California Ruben Hinojosa, Texas
David P. Roe, Tennessee Carolyn McCarthy, New York
Glenn Thompson, Pennsylvania John F. Tierney, Massachusetts
Tim Walberg, Michigan Dennis J. Kucinich, Ohio
Scott DesJarlais, Tennessee Rush D. Holt, New Jersey
Richard L. Hanna, New York Susan A. Davis, California
Todd Rokita, Indiana Raul M. Grijalva, Arizona
Larry Bucshon, Indiana Timothy H. Bishop, New York
Trey Gowdy, South Carolina David Loebsack, Iowa
Lou Barletta, Pennsylvania Mazie K. Hirono, Hawaii
Kristi L. Noem, South Dakota Jason Altmire, Pennsylvania
Martha Roby, Alabama
Joseph J. Heck, Nevada
Dennis A. Ross, Florida
Mike Kelly, Pennsylvania
Barrett Karr, Staff Director
Jody Calemine, Minority Staff Director
SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE TRAINING
VIRGINIA FOXX, North Carolina, Chairwoman
John Kline, Minnesota Ruben Hinojosa, Texas
Thomas E. Petri, Wisconsin Ranking Minority Member
Howard P. ``Buck'' McKeon, John F. Tierney, Massachusetts
California Timothy H. Bishop, New York
Judy Biggert, Illinois Robert E. Andrews, New Jersey
Todd Russell Platts, Pennsylvania Susan A. Davis, California
David P. Roe, Tennessee Raul M. Grijalva, Arizona
Glenn Thompson, Pennsylvania David Loebsack, Iowa
Richard L. Hanna, New York George Miller, California
Larry Bucshon, Indiana Jason Altmire, Pennsylvania
Lou Barletta, Pennsylvania
Joseph J. Heck, Nevada
C O N T E N T S
----------
Page
Hearing held on November 30, 2011................................ 1
Statement of Members:
Foxx, Hon. Virginia, Chairwoman, Subcommittee on Higher
Education and Workforce Training........................... 1
Prepared statement of.................................... 3
Hinojosa, Hon. Ruben, ranking minority member, Subcommittee
on Higher Education and Workforce Training................. 4
Prepared statement of.................................... 5
Statement of Witnesses:
Foster, Tim, president, Colorado Mesa University............. 33
Prepared statement of.................................... 35
Manahan, Ronald, president, Grace College.................... 23
Prepared statement of.................................... 24
Merisotis, Jamie P., president, Lumina Foundation............ 28
Prepared statement of.................................... 30
Wellman, Jane V., executive director, Delta Project on
Postsecondary Costs, Productivity, and Accountability...... 13
Prepared statement of.................................... 16
Additional Submissions:
Altmire, Hon. Jason, a Representative in Congress from the
State of Pennsylvania:
Prepared statement of the Pennsylvania Association of
Private School Administrators (PAPSA).................. 8
Mrs. Foxx:
Prepared statement of the Education Finance Council (EFC) 7
KEEPING COLLEGE WITHIN REACH:
DISCUSSING WAYS INSTITUTIONS CAN
STREAMLINE COSTS AND REDUCE TUITION
----------
Wednesday, November 30, 2011
U.S. House of Representatives
Subcommittee on Higher Education and Workforce Training
Committee on Education and the Workforce
Washington, DC
----------
The subcommittee met, pursuant to call, at 10:02 a.m., in
room 2261, Rayburn House Office Building, Hon. Virginia Foxx
[chairwoman of the subcommittee] presiding.
Present: Representatives Foxx, Petri, McKeon, Biggert, Roe,
Thompson, Bucshon, Heck, Hinojosa, Tierney, Bishop, Andrews,
Davis, Grijalva, and Loebsack.
Staff Present: Jennifer Allen, Press Secretary; Heather
Couri, Deputy Director of Education and Human Services Policy;
Daniela Garcia, Professional Staff Member; Amy Raaf Jones,
Education Policy Counsel and Senior Advisor; Brian Melnyk,
Legislative Assistant; Krisann Pearce, General Counsel; Mandy
Schaumburg, Education and Human Services Oversight Counsel;
Linda Stevens, Chief Clerk/Assistant to the General Counsel;
Alissa Strawcutter, Deputy Clerk; Aaron Albright, Minority
Communications Director for Labor; Daniel Brown, Minority
Junior Legislative Assistant; Jody Calemine, Minority Staff
Director; John D'Elia, Minority Staff Assistant; Brian Levin,
Minority New Media Press Assistant; and Michael Zola, Minority
Senior Counsel.
Chairwoman Foxx. Good morning, everyone.
This is a fairly small room, and we are all going to be
very friendly today because we are in tight quarters. And it
may get a little warm in here. But I want to welcome everybody
to this hearing.
A quorum being present, the subcommittee will come to
order.
I would like to thank the witnesses for joining us today.
We appreciate the opportunity to hear your thoughts on the
growing cost of higher education in America.
Over the past decade, the cost of attending college has
increased dramatically. According to the College Board, in-
State tuition and fees at public 4-year colleges and
universities have increased approximately 72 percent since
2001. In my home State of North Carolina, the sticker price for
4-year public colleges has jumped 25 percent in the past 2
years alone.
This troubling trend of higher prices has several causes,
including weak local economies, increased spending on student
services and academic support, and State budget crises. States
facing deficits and persistently high unemployment have been
forced to cut spending across the board. As a result, public
colleges and universities can no longer rely upon the same
level of State financial support and must make tough decisions
to help make ends meet, including cutting services or raising
student fees.
Leaders in Washington have long recognized the value of
higher education in preparing students to compete in the global
workforce. In 1965, Congress created the Higher Education Act
to help low-income students pursue a college degree. As a
result, last year more than $169 billion in federal financial
aid was disbursed to undergraduate and graduate students, up 81
percent since 2005.
However, as our nation struggles with trillion-dollar
budget deficits and unprecedented national debt, continuing to
increase federal subsidies to supplement the growing cost of
college is simply unsustainable.
In the last school year, the federal government provided
roughly three-quarters of all student aid. Despite this
tremendous taxpayer investment, millions of students are still
struggling with significant student loan debt burdens.
Clearly, the rise in the cost of higher education in the
United States is a problem, but the answer cannot be found in
loan-forgiveness gimmicks or federal takeover of the student
loan industry. As we continue to rethink our role in education,
we should use our influence to encourage accountability and
transparency. Our end goal should be for the States,
postsecondary institutions, and students to determine the best
path forward.
Higher education has remained fundamentally unchanged since
its inception, with most universities and college relying on
professors lecturing to a classroom of 18- to 22-year-old
students who live on or nearby the campus, adding significantly
to their cost of attending college. To help reduce tuition and
fees, institutions of higher education should be looking for
innovative ways to incorporate new technology and better
address student needs.
Under the current system, there is little incentive for
schools to enact lasting changes or accountability measures for
the billions of taxpayer dollars spent each year. States,
students, and parents must demand accountability for the
investment, not depending solely on the federal government.
In fact, in some instances, the federal government has done
more harm than good. For example, we have seen this
administration restrict academic freedom and tamp down on
innovations through inappropriate regulatory policies.
Prospective students and their parents must make it a
priority to educate themselves about the true cost of attending
college. Meanwhile, colleges and universities must do their
part to streamline costs and lessen the burden for students
whenever possible.
Fortunately, some innovative institutions have already
taken it upon themselves to do just that. Many colleges and
universities have dramatically reduced administrative costs by
eliminating or consolidating duplicative services. Others have
found ways to make use of empty classroom space, offering
courses late at night and on weekends to help working students
pursue a degree.
The University of Washington and some campuses in the
University of Wisconsin system recently implemented accelerated
degree programs. These programs help the institution save on
operating costs and pricey student services while also allowing
students to reduce their debt load by graduating in a shorter
period of time.
As The Chronicle of Higher Education recently noted,
Cabrini College in Pennsylvania is working to cut tuition and
fees by more than 12 percent without lowering merit
scholarships for incoming freshmen. Indiana's Grace College and
Colorado Mesa University are also working to reduce costs, and
we look forward to learning more about their initiatives during
today's hearing.
Each of these initiatives helps ensure a more affordable
college education remains available for students across
America. We should continue to share best practices like these
while also encouraging increased transparency in the reporting
of annual college costs. By making the most up-to-date
information on tuition and fees available to the public,
students and their families can better understand the cost, any
loan commitment they will make, and develop a plan for managing
any resultant debt before stepping foot on campus.
I look forward to a productive discussion with my
colleagues and our witnesses on how we can work together to
help keep college attendance within reach for students
nationwide.
I would now like to recognize the ranking member, Ruben
Hinojosa, for his opening remarks.
[The statement of Chairwoman Foxx follows:]
Prepared Statement of Hon. Virginia Foxx, Chairwoman,
Subcommittee on Higher Education and Workforce Training
Good morning, and welcome to today's subcommittee hearing. I'd like
to thank our witnesses for joining us today. We appreciate the
opportunity to hear your thoughts on the growing cost of higher
education in America.
Over the past decade, the cost of attending college has increased
dramatically. According to the College Board, in-state tuition and fees
at public four-year colleges and universities have increased
approximately 72 percent since 2001. In my home state of North
Carolina, the sticker price for four-year public colleges has jumped 25
percent in the past two years alone.
This troubling trend of higher prices has several causes, including
weak local economies, increased spending on student services and
academic support, and state budget crises. States facing deficits and
persistently high unemployment have been forced to cut spending across
the board. As a result, public colleges and universities can no longer
rely upon the same level of state financial support, and must make
tough decisions to help make ends meet, including cutting services or
raising student fees.
Leaders in Washington have long recognized the value of higher
education in preparing students to compete in the global workforce. In
1965, Congress created the Higher Education Act to help low-income
students pursue a college degree. As a result, last year more than $169
billion in federal financial aid was disbursed to undergraduate and
graduate students, up 81 percent since 2005.
However, as our nation struggles with trillion dollar budget
deficits and unprecedented national debt, continuing to increase
federal subsidies to supplement the growing cost of college is simply
unsustainable. In the last school year, the federal government provided
roughly three-quarters of all student aid. Despite this tremendous
taxpayer investment, millions of Americans are still struggling with
significant student loan debt burdens.
Clearly, the rise in the cost of higher education in the United
States is a problem--but the answer cannot be found in loan forgiveness
gimmicks or a federal takeover of the student loan industry. As we
continue to re-think our role in education, we should use our influence
to encourage accountability and transparency. Our end goal should be
for states, postsecondary institutions, and students to determine the
best path forward.
Higher education has remained fundamentally unchanged since its
inception with most universities and colleges relying on professors
lecturing to a classroom of 18-22 year old students who live on or
nearby the campus, adding significantly to their cost of attending
college. To help reduce tuition and fees, institutions of higher
education should be looking for innovative ways to incorporate new
technology and better address student needs. Under the current system,
there is little incentive for schools to enact lasting changes or
accountability measures for the billions of taxpayer dollars spent each
year. States, students and parents must demand accountability for the
investment, not depending solely on the federal government.
In fact, in some instances, the federal government has done more
harm than good. For example, we have seen this administration restrict
academic freedom and tamp down on innovations through inappropriate
regulatory policies.
Prospective students and their parents must make it a priority to
educate themselves about the true costs of attending college.
Meanwhile, colleges and universities must do their part to streamline
costs and lessen the burden for students whenever possible.
Fortunately, some innovative institutions have already taken it upon
themselves to do just that.
Many colleges and universities have dramatically reduced
administrative costs by eliminating or consolidating duplicative
services. Others have found ways to make use of empty classroom space,
offering courses late at night and on weekends to help working students
pursue a degree.
The University of Washington and some campuses in the University of
Wisconsin system recently implemented accelerated degree programs.
These programs help the institutions save on operating costs and pricey
student services, while also allowing students to reduce their debt
load by graduating in a shorter period of time. As the Chronicle of
Higher Education recently noted, Cabrini College in Pennsylvania is
working to cut tuition and fees by more than 12 percent without
lowering merit scholarships for incoming freshmen. Indiana's Grace
College and Colorado Mesa University are also working to reduce costs,
and we look forward to learning more about their initiatives during
today's hearing.
Each of these initiatives helps ensure a more affordable college
education remains available for students across America. We should
continue to share best practices like these, while also encouraging
increased transparency in the reporting of annual college costs. By
making the most up-to-date information on tuition and fees available to
the public, students and their families can better understand the
costs, any loan commitment they will make and develop a plan for
managing any resultant debt before stepping foot on campus.
I look forward to a productive discussion with my colleagues and
our witnesses on how we can work together to help keep college
attendance within reach for students nationwide. I now recognize the
ranking member, Ruben Hinojosa, for his opening remarks.
______
Mr. Hinojosa. Thank you, Chairwoman Foxx.
I would like to welcome and thank our distinguished
witnesses for joining us today.
This hearing is an opportunity for this committee to
reaffirm its commitment to affordability, accessibility,
equity, and student success in higher education. As we look for
innovative strategies to reduce college costs and bolster
college completion, it is vitally important that we do not
create new obstacles for low-income, first-generation college
and nontraditional and minority students. These populations are
entering our colleges and universities in record numbers and
must have the opportunity to go on and succeed.
As ranking member of this subcommittee, I am deeply
concerned that college costs have risen dramatically in the
last decade. According to the College Board, between the school
years 2010 to 2012, in-State tuition at public 4-year
institutions rose by 8.3 percent and the 2-year institutions
experienced a sharp increase of 8.7 percent.
In a recent national, bipartisan poll conducted by the
Young Invincibles, The Institute for College Access and
Success, known as TICAS, and the Demos, 84 percent of the young
adults surveyed said that making college more affordable should
be a priority for U.S. Congress.
Today, thousands of students find themselves incurring an
inordinate amount of debt to finance their education. College
seniors who graduated in the year 2010, for example, have an
average of $25,250 in student loan debt, according to TICAS.
These trends are especially troubling given that the jobs of
tomorrow will require students to have at least 2 years of
postsecondary education and most States are slashing their
education budgets.
In the past several years, Democrats have taken historic
steps to make a quality higher education more accessible and
affordable for greater numbers of students. The passage of the
Student Aid and Fiscal Responsibility Act, known as SAFRA,
enacted as part of the Health Care and Education Reconciliation
Act of 2010, made the largest investment in student financial
aid since the GI Bill.
In the 111th Congress, Democrats ended the taxpayer-
subsidized, Federally guaranteed Federal Family Education Loan
Program, known as FFELP, and replaced it with the William D.
Ford Federal Direct Loan, making federal college loans more
stable and efficient at no cost to taxpayers. By transitioning
to the Direct Loan Program, Congress was able to reinvest $68
billion in federal student aid.
SAFRA increased the maximum Pell Grant award, enhanced the
capacity of minority-serving institutions and community
colleges, and strengthened the income-based repayment, and
increased investments to other federal programs.
The bipartisan-passed Higher Education and Opportunity Act
of 2008 increased transparency and investments in federal
student aid. Under HEOA, the U.S. Department of Education is
required to collect and publish lists of tuitions and fees at
all U.S. postsecondary institutions, holding colleges
accountable for rising fees and tuition. Those institutions
with the largest percentage increases in prices most submit a
detailed description to the Department of Education outlining
the reason for the increased costs. HEOA also encourages the
use of innovative strategies to reduce costs, such as need-
based grant aid incentives.
While Democrats have made great strides in tackling this
issue through the federal investments in Pell Grants, direct
loans, the American Opportunity Tax Credit, and the enactment
of HEOA and SAFRA, I agree with Education Secretary Arne Duncan
that we must continue to do more to rein in college costs and
reduce individual student debt. I look forward to hearing from
today's witnesses on how we can expand the affordability,
accessibility, and student success in higher education and
reach our Nation's college-completion goals.
Thank you.
[The statement of Mr. Hinojosa follows:]
Prepared Statement of Hon. Ruben Hinojosa, Ranking Minority Member,
Subcommittee on Higher Education and Workforce Training
Thank you, Chairwoman Foxx.
I would also like to welcome and thank our distinguished witnesses
for joining us today. Today's hearing is an opportunity for this
committee to reaffirm its commitment to affordability, accessibility,
equity, and student success in higher education.
As we look for innovative strategies to reduce college costs, and
bolster college completion, it's vitally important that we do not
create new obstacles for low-income, first-generation college, non-
traditional, and minority students. These student populations are
entering our colleges and universities in record numbers and must have
the opportunity to go to college and succeed.
As Ranking member of this subcommittee, I am deeply concerned that
college costs have risen dramatically in the last decade. According to
the College Board, between the 2010-11 and 2011-2012 school years, in-
state tuition at public four-year institutions rose by 8.3 percent, and
two-year institutions experienced a sharp increase of 8.7 percent.
In a recent national bi-partisan poll conducted by the Young
Invincibles, The Institute for College Access and Success (TICAS), and
Demos, 84 percent of the young adults surveyed said that making college
more affordable should be a priority for Congress.
Today, thousands of students find themselves incurring an
inordinate amount of debt to finance their education. College seniors
who graduated in 2010, for example, had an average of $25,250 in
student loan debt, according to TICAS.
These trends are especially troubling given that the jobs of
tomorrow will require students to have at least two years of
postsecondary education and states are slashing their education
budgets.
In the past several years, Democrats have taken historic steps to
make a quality higher education more accessible and affordable for
greater numbers of students.
The passage of the Student Aid and Fiscal Responsibility Act
(SAFRA), enacted as part of the Health Care and Education
Reconciliation Act of 2010 (HCERA), made the largest investment in
student financial aid since the GI bill.
In the 111th Congress, Democrats ended the taxpayer-subsidized,
federally guaranteed Federal Family Education Loan Program (FFELP) and
replaced it with the William D. Ford Federal Direct Loan (DL), making
federal college loans more stable and efficient at no cost to
taxpayers.
By transitioning to the Direct Loan program, Congress was able to
reinvest $68 billion dollars in federal student aid.
SAFRA increased the maximum Pell Grant award, enhanced the capacity
of Minority-Serving Institutions (MSIs) and Community Colleges,
strengthened the Income-based repayment, and made other investments to
federal programs.
The bi-partisan passed Higher Education and Opportunity Act of 2008
(HEOA) increased transparency and investments in federal student aid.
Under HEOA, the U.S. Department of Education is required to collect
and publish lists of tuition and fees at all U.S. postsecondary
institutions, holding colleges accountable for rising fees and tuition.
Those institutions with the largest percentage increases in prices
must submit a detailed description to the Department outlining the
reason for the increased costs.
HEOA also encourages the use of innovative strategies to reduce
costs such as need-based grant aid incentives.
While Democrats have made great strides in tackling this issue
through federal investments in Pell Grants, direct loans, the American
Opportunity Tax Credit, and the enactment of HEOA, and SAFRA, I agree
with Education Secretary Arne Duncan that we must do more to rein in
college costs and reduce individual student debt.
With that, I look forward to hearing from our witnesses on how we
can continue to address affordability, accessibility and student
success and provide all students with a high quality education.
Thank you.
______
Chairwoman Foxx. Thank you so much, Mr. Hinojosa.
Pursuant to Committee Rule 7(c), all subcommittee members
will be permitted to submit written statements to be included
in the permanent hearing record. And, without objection, the
hearing record will remain open for 14 days to allow
statements, questions for the record, and other extraneous
material referenced during the hearing to be submitted in the
official hearing record.
[An additional submission of Chairwoman Foxx follows:]
Prepared Statement of the Education Finance Council
For nearly 20 years, the Education Finance Council (EFC), the trade
association representing nonprofit and state agency student finance
organizations, and its members have been working to improve access to
and affordability of postsecondary education. EFC members have a deep
expertise in postsecondary education financing and a long history of
educating students on the range of options to pay for college. EFC and
its members understand the financial hardship borne by student
borrowers struggling to meet the rising cost of college during an
economic recession and distressed job market. However, student loans,
when properly understood and managed; provide necessary financing for
students that have no other option to fund their postsecondary
education. Student outreach; financial literacy education; and
responsible borrowing initiatives provided by nonprofit and state
agency student finance organizations help to prevent over-borrowing of
student loans, which in turn aids in managing the cost of college.
These programs allow students to understand their student loan
obligations before they borrow and repayment options when they
graduate. The innovative college access strategies offered by nonprofit
and state agency student loan providers are keeping college within
reach for numerous students.
Nonprofit and state agency student finance organizations work
closely with secondary and postsecondary institutions, financial aid
officers, guidance counselors, and other local educators as well as
directly with students to provide vital college access and completion
programs. Programs range from financial aid awareness, early awareness,
financial literacy, college planning, and training for educators.
Nonprofit organizations educate students on postsecondary options, the
cost of each option, and funding opportunities. Through one-on-one
counseling, these organizations provide in-person guidance to students
such as scholarship searches, filling out the FAFSA, completing college
entrance applications and essays, and other hands-on activities. Many
EFC members offer interactive online portals to promote smart college
planning. Interactive portals allow students to align their interests
with potential college majors and careers and view education options
for each choice, the estimated cost of each choice, and the estimated
salary after graduation. Portals include a range of other tools;
including lesson plans on personal financing, strategies for higher
education funding, details of postsecondary institutions in the
student's state, and available scholarships and grants. Oftentimes,
nonprofit and state agency student finance organizations serve as the
go-to resource in their states for student support. This private-sector
collaboration has been a key driver in better preparing students to
manage higher education costs.
In today's world, education and training after high school are
requirements for earning a middle class income. Students must choose
the education or training option that best meets their needs and which
will not impose higher costs than they can afford. School counselors
spend more and more of their time providing guidance to students on
their personal lives and challenges. As a result, counselors have less
time to work with students to develop a postsecondary education and
training plan. EFC member institutions work with students and families
to explore their interests, aptitudes, and career goals to link these
interests to the education and training programs required to achieve
their goals. Importantly, nonprofit and state agency student finance
organizations provide unbiased counseling to help families select
education or training options that will meet their needs without
forcing them to incur greater debt than makes sense for their
anticipated income.
Beyond programs to promote access and affordability, nonprofit and
state agency student finance organizations provide a responsible
funding option for students to fill the growing higher education
financing gap. As tuition continues to rise and financial aid remains
stagnant, students must have access to loans with transparent terms and
affordable rates in order to attain a postsecondary degree. EFC members
provide supplemental student loans with low, fixed-interest rates--most
times below the Department of Education's Parent PLUS loan interest
rates--and consumer-friendly borrower benefits. All programs require
the student to have a qualifying credit score or qualifying cosigner.
Nonprofit lenders provide extensive entrance and exit counseling
regarding the loan's terms to prevent over-borrowing and ensure each
student understands repayment obligations and options. In addition,
most EFC members require that schools certify the enrollment of each
borrower. School certification acts as a check that the loan is being
used for an educational purpose and that the amount borrowed is in-line
with the college's costs and the borrower's needs.
Recent government efforts to reduce student debt are inadequate and
ineffective in view of the economic burden students face today. In the
past, EFC members were able to offer loan forgiveness programs and
other borrower benefits. These programs allowed borrowers to pursue
fields such as teaching and nursing they might otherwise not have been
able to afford to pursue. With rising tuition and unemployment rates
staggeringly high, students need better options to fund their
postsecondary education and better guidance on the options that are
already available. Congress and the Administration must reengage
nonprofit and state agency student finance organizations to utilize
proven-effective programs to promote college affordability and success.
______
[An additional submission of Mr. Altmire follows:]
Prepared Statement of the Pennsylvania Association of
Private School Administrators (PAPSA)
The Pennsylvania Association of Private School Administrators
represents the more than 300 for-profit career schools, colleges and
universities in the Commonwealth.
PAPSA is deeply concerned about student overborrowing. What schools
have found is that over borrowing is a big part of the loan debt
problem, especially among unsophisticated borrowers. And it is
increasing despite aggressive loan counseling.
Schools constantly report stories of students asking for all the
financial aid they are entitled to, paying their tuition and then
walking away with thousands of dollars which ends up paying for a newer
car, Christmas presents, plastic surgery, bail money or big parties
which the school usually ends up hearing about. These cash stipends can
be, in one case, as high as $24,000 for an associate degree. Despite
the best efforts of schools to curb overborrowing, the U.S. Department
of Education mandates that schools must disclose to students all the
loan money they are entitled to borrow. How can schools be responsible
for repayment when the US Department of Education encourages
irresponsible overborrowing?
Overborrowing is defined in three ways by our schools:
Students transfer or move from school to school and
continue to mount debt which goes into deferment while they are
attending another college or school.
Commuter students, living at home, borrow available funds
in excess of direct school costs (tuition, fees, books) without regard
to debt consequences. While these dollars make sense for traditional
college students, they are not appropriate for commuter students. Since
schools must disclose all the loan money available to these students,
they often access these significant additional dollars with no thought
to the future.
Students also overborrow when they receive an unexpected
increase in PELL, OVR, state grant, public assistance or WIA funding.
As a result, more grant money is received than students originally
planned. But when the school counsels and encourages them to return the
excess loan money, the students almost always decline the request and
keep the extra loan amount.
The following are actual examples of student overborrowing in
Pennsylvania:
A small cosmetology school in Central Pennsylvania--In 2007-08-09,
the school had a zero percent tuition increase and .06 percent
enrollment increase, yet overborrowing increased from four to 41
students (a 925 percent increase). Overborrowing loan amounts increased
from $2,064 in 2007 to $68,473 in 2009 (over a 3000 percent increase).
CHART 1
OVERBORROWING LOAN AMOUNTS--COSMETOLOGY SCHOOL
Three Business school campuses in Northwestern Pennsylvania--In
2007-08-09 the school averaged a 3.8 percent total tuition increase
with a 43 percent enrollment increase, but a 152 percent increase in
overborrowing--from $234,000 to $590,000 in two years.
CHART 2
OVERBORROWING LOAN AMOUNTS--THREE BUSINESS SCHOOLS IN
NORTHWESTERN PENNSYLVANIA
One business school campus in Central Pennsylvania--Between 2007
and 2009, the school averaged a 1.7 percent tuition increase each year
and no increase in enrollments or borrowers. Yet, overborrowing
increased by 104 percent (from 36 to 74 students) and overborrowing
dollars tripled from $100,193 in 2007 to $363,983 in 2009.
CHART 3
OVERWORKING LOAN AMOUNTS--ONE BUSINESS SCHOOL IN CENTRAL PENNSYLVANIA
Three small Pittsburgh technical schools under one ownership--While
the number of students overborrowing remained the same between 2007 and
2009, the total amount of over borrowing increased by 99 percent
($32,651 to $61,316). Although tuition increases averaged 6.2 percent a
year and enrollment increased by only 1.2 percent on average over the
period, the dollar amount of overborrowing increased as the same number
of students chose to increase their overborrowing.
CHART 4
OVERBORROWING LOAN AMOUNTS--THREE SMALL PITTSBURGH TECHNICAL SCHOOLS
Nineteen small cosmetology schools throughout Pennsylvania--
Although tuition increases averaged less than one percent per year for
2007 to 2008 to 2009 and the average enrollment increase was 3.8
percent a year, the number of students overborrowing increased from 757
in 2007 to 6,033 in 2009. Actual overborrowing loan dollars increased
six-fold, from $1,169,261 to $6,551,978 over the three year period.
CHART 5
OVERBORROWING LOAN AMOUNTS--NINETEEN SMALL COSMETOLOGY
SCHOOLS IN PENNSYLVANIA
A trade/technical school in Northwestern Pennsylvania--Between 2007
and 2009 the school had a five percent total tuition increase; a 42
percent increase in enrollment; and no change in the student
demographic. Yet, they experienced a 4,250 percent increase in
overborrowing--from $6,496 in 2007 to $255,680 in 2009. The number of
students overborrowing increased from ten in 2007 to 180 in 2009.
CHART 6
OVERBORROWING LOAN AMOUNTS--TRADE/TECHNICAL SCHOOL IN
NORTHWESTERN PENNSYLVANIA
A business school in Northeastern Pennsylvania--Between 2008 and
2010, 65 percent of the students each took more than $1,000 in extra
loan stipends, averaging $5,351. Thirty-five percent took less than
$1,000. The 65 percent however, represented over 97 percent of the
total amount of loan stipends issued, or $1,480,000 of the $1,530,000
in extra stipend money.
The point in this example is the school's concern that 65 percent
of the students who borrowed more than $1000 averaged over $5000 in
extra stipends. The school felt the students were taking on unnecessary
expenses and would have a higher likelihood of default.
A 37 campus private group of schools in Pennsylvania and in other
states--Overborrowing increased from $17,601,189 to $34,883,339 a 101
percent increase in the private school group. Over the three year
period, there was a 7.6 percent tuition increase and a 41 percent
increase in enrollment.
CHART 7
OVERBORROWING LOAN AMOUNTS--A 37 CAMPUS PRIVATE SCHOOL GROUP IN
PENNSYLVANIA AND OTHER STATES
Large private college in Western Pennsylvania--Compare the previous
data to the data provided by a more expensive two year college in
Western Pennsylvania. Student overborrowing increased only slightly
from $1,329,854 in 2007 to $1,373,764 in 2009. The tuition increase
averaged 3.5 percent a year. Enrollment between 2007 and 2009 increased
an average of one percent a year. There was no change in student
demographics.
CHART 8
OVERBORROWING LOAN AMOUNTS--LARGE PRIVATE COLLEGE IN
WESTERN PENNSYLVANIA
In this instance, tuition was above the state average in 2007 and
students were already borrowing larger amounts for all years in
question. The conclusion is clear. More expensive private colleges do
not see an increase in over borrowing since their students have
traditionally borrowed at higher levels. Relief, however, from
mandatory loan disclosure to students is needed at lower tuition
institutions.
The three year trend appears clear. While there were minor tuition
increases, no change in student demographics, stable or moderate
enrollment increases due to some new campuses, only over borrowing, as
was defined earlier, increased exponentially. In addition, from all
early indications the upward trend toward excess borrowing will
continue in 2010 and possibly beyond.
The problems PAPSA sees now with overborrowing will only be
exacerbated in the future by the recent gainful employment regulations
that the Department of Education has implemented. If career schools are
going to be penalized for high debt, (and currently are under cohort
default limit requirements) debt problems should be addressed at the
front-end of the loan as well by curbing over borrowing and considering
other front-end approaches.
PAPSA would like to see Congress or the US Department of Education
consider additional methods beyond counseling for limiting student
borrowing. We propose Federal changes to allow an institution to use
professional judgment to decrease the loan amount approved for a
student based on the appropriateness of the budgeted items and
Satisfactory Academic Progress (SAP), as long as the loan amount fully
covers the cost of attendance (COA), as we understand COA to be
defined, and there are no other government programs that contribute to
the COA. We would be happy to provide legislative language if
requested.
Thank you.
______
Chairwoman Foxx. It is now my pleasure to introduce our
distinguished panel of witnesses.
Jane Wellman is the creator and director of the Delta
Project, a research and policy organization that works to
improve productivity in higher education through more effective
management of resources. Since 1995, she has also been a senior
associate with the Institute for Higher Education Policy.
Dr. Ronald Manahan is the fifth president of Grace College
and Seminary, having served as president since 1994. Dr.
Manahan has also served as the school's professor of biblical
studies, vice president of college academic affairs, and
provost.
Mr. Jamie Merisotis is the president and CEO of the Lumina
Foundation for Education. Before joining the Lumina Foundation
in January 2008, he was the founding president of the Institute
for Higher Education Policy.
Mr. Tim Foster was appointed as the tenth president of
Colorado Mesa University in March 2004. Mr. Foster previously
served as the executive director for the Colorado Commission on
Higher Education and as head of the Colorado Department of
Higher Education.
Before I recognize you to provide your testimony, let me
briefly explain our lighting system. You will have 5 minutes to
present your testimony. When you begin, the light in front of
you will turn green. When 1 minute is left, the lights will
turn yellow. And when your time has expired, the light will
turn red, at which point I ask that you wrap up your remarks as
best you are able.
After you have testified, members will each have 5 minutes
to ask questions of the panel.
I now recognize Ms. Wellman for 5 minutes.
STATEMENT OF JANE V. WELLMAN, EXECUTIVE DIRECTOR, DELTA PROJECT
ON POSTSECONDARY COSTS, PRODUCTIVITY, AND ACCOUNTABILITY
Ms. Wellman. Thank you very much.
Good morning, Madam Chairwoman and members. It is a
pleasure to be here speaking about the research done by the
Delta Cost Project, a nonprofit, nonpartisan research group
focusing on where the money comes from and where the money goes
in higher education.
I am going to speak quickly about what we see as some of
the major patterns or major trends in the revenue and spending
data for higher education. Our data cover public and private
nonprofit institutions. I will be focusing on the time period
roughly 1999 to 2009. Because we use expenditure data as well
as revenue data, there is a bit of a time gap involved. So you
can mentally adjust for some of the numbers I am going to be
talking about for the last couple of years since 2009 when we
know that there have been continued dislocations, particularly
in public institutions.
First comment, first pattern. We have some slides but I
think they are not going to work, so this will be more Zen than
usual. You have little, teeny versions of these in the
testimony. So bear with me and I will just get through them
quickly.
The first pattern has to do with levels of economic
stratification and the real differences between public and
private--here we go; we are getting something popping up--
between public and nonprofit private institutions over this
period.
One of the really big stories over the last decade has been
the growing bifurcation between public and private
institutions, with the majority of new enrollments, 1.6
million-plus new enrollments, going into public community
colleges and an awful lot of increased spending occurring
primarily in a relatively small handful of elite institutions
with endowments.
You can see on this chart, the way we have organized all of
these data are by broad sector, Carnegie categories. On the
left, we have private research universities, and on the right,
community colleges. The green line here is what has happened in
increased spending per student on average in that sector since
2009. The purple line is where the enrollments have gone. So
you can see sort of quickly here what the differences have
been.
If you will go to the next slide, one of the consequences
of this, as you will see, is a real unevenness in access to
resources between the relatively small handful of elite
institutions and the majority of institutions where students
are enrolled, with average spending per student in the elite
institutions somewhere around $35,000 per student versus public
community colleges where spending is closer to $10,000 per
student. So it is a real pattern of differences. And, other
than this one, generalizations about finance in higher
education are always suspect; there are such differences.
The second major comment has to do with what has been
happening to tuition, which I know is of primary interest to
this panel. You know the story of rising tuitions, which have
been continuing to rise well above inflation for the last 20
years. However, there has been a growing difference between
growing prices charged to student and spending per student or
cost per student. So the growing price and cost gap is one of
the other big patterns we see in higher education.
For the majority of institutions, increased tuition
revenues are not translating into greater spending. The reason
for this is cost-shifting. As other revenue sources are
evaporating in the institutions, rather than reducing their
spending--and some might argue they can't reduce spending that
much--but rather than reducing spending, they are shifting the
cost on to student tuition.
So costs are here; tuitions are here. And what you see in a
year like 2009, a time of recession, what you see is both cost-
cutting by the institutions and price increases. And having
those two things happening simultaneously is one of the real
unsustainable patterns in higher education.
If you look at some of the data here, this figure here
shows just a 1-year change, between 2008 and 2009, in what has
happened in tuition revenues--how much the institutions are
capturing in revenues per student--versus what they are getting
in public institutions from State and local resources versus
what they are spending on the students. So looking at that gap
between tuition and State revenues and spending gives you a
pretty good snapshot of what is going on.
Just to read one of them off, in public research
universities, tuition revenues, average increase in 1 year of
$369, at the same time that the institutions were losing on
average $751 per student from State and local appropriations.
Despite that, they kept spending about flat, very modest
increase, 92 bucks, probably because they were spending down
reserves during that period.
If you look at the next chart, you will see a 10-year
pattern and the same kinds of numbers. And what you see is that
over that 10-year period most of the new spending in higher
education is coming in from tuition revenues--the same kind of
pattern of a price and cost disconnect over that period.
Third comment--I don't have charts on this one, so let me
just speak to it, and it has to do with where the money is
going in higher education. One of the patterns we have seen--
and it has been commented on widely in higher education--has
been a modest erosion, but a consistent erosion, in the amount
of money that is going to pay for the direct cost of student
instruction and an uptick in spending that is going for
administrative activities, academic support, which could be
computing, and for other types of functions. So you have seen
this winding down, very modest but consistent, in all types of
institutions, from the elite Ivies to the community colleges,
reduction in spending for instruction and an increase in
spending for administration.
What we saw in 2009 was an interesting and we hope welcome
slight change in that. In the first year of the great
recession, when you see evidence of spending cuts in
institutions, this time we saw greater attention--oh, I am
sorry, I am red already--to the efforts to control
administrative expenses and make the cuts there versus what is
going on in spending on instruction. So they are protecting
instructional spending.
I am going to jump very quickly to one other major point,
and then I will stop. And that is, if you looked for a smoking
gun in higher education about where the spending has been going
up, the single biggest factor for increased spending is
employee benefits and specifically health care, up 5 percent
per year consistently over time. So if there is one area where
spending has to get cut if we are going to take care of
tuition, it is going to be health care.
My apologies for rushing through that. Thank you.
[The statement of Ms. Wellman follows:]
------
Chairwoman Foxx. Five minutes goes by in a hurry.
Ms. Wellman. Well, I didn't even see the--my apologies.
Chairwoman Foxx. You went 2 minutes over.
Ms. Wellman. I beg your pardon.
Mr. Hinojosa. Madam Chair, I ask unanimous consent that we
all agree to extending the time of 5 minutes to a minimum of 7,
possibly 8, so that we can really go over these numbers that
have been extremely of great concern to many of the members on
both sides of the aisle. And I think that it is worth giving
them that additional time, if you have no problem with that.
Chairwoman Foxx. Thank you, Mr. Hinojosa. Let's see how our
panelists can do within the time frame. And Ms. Wellman has set
a pattern here, and we will try to be fair to everyone
involved. But we won't set the time at 7 minutes, we will leave
it at 5, and try our best to let people finish their thoughts.
And we will be fairly lenient in the questions. How is that?
Mr. Hinojosa. I have no problem with that.
Chairwoman Foxx. Thank you.
Dr. Manahan?
STATEMENT OF RONALD E. MANAHAN, TH.D., PRESIDENT, GRACE COLLEGE
AND SEMINARY
Mr. Manahan. Thank you, distinguished committee members,
for the opportunity to testify this morning. My name is Ron
Manahan, president of Grace College and Seminary, an accredited
residential Christian institution of arts and sciences in
Indiana. Grace offers undergraduate and graduate programs and
enrolls over 1,600 students from 36 States and 8 countries.
Thank you for the opportunity to testify and provide you
with information regarding our institution's efforts to address
the rising cost of college education.
For a number of years, we had been concerned about this
issue, but the economic turbulence of 2008 and beyond made even
clearer that our campus had to address rising costs with
greater urgency and that federal and State support of higher
education was challenged. We could not simply stand by and wait
for help.
Grace has received the most attention because of its 3-year
degree option, but we reviewed many aspects of our college--and
we have more to do--to determine where savings and reforms can
be made. Specifically, we addressed rising costs in four ways.
In 2007, our strategic plan called for the evaluation of
every academic program in terms of data points such as
enrollment patterns, staffing, cost-effectiveness, demand among
high school students, job-market issues, et cetera. Each
program was placed in one of our four categories, listed in my
prepared testimony.
The review was completed in 2009. This led to program
adjustments in some cases and the teach-out and elimination of
six programs. Grace helped students either finish at Grace or
transfer to another institution offering the student's program
choice. Several programs were added that focused more directly
on areas of student program interest and regional needs.
A second way Grace addressed cost was by reviewing
institutional operations. For more than 8 years, Grace has
taken steps to reduce operational costs by seeking more
efficient ways to serve students and employees. After thorough
reviews, the campus strategically aligned physical plant
operations, food service, publications, marketing, and printing
with regional businesses that provide good service. We have
been able to contain or reduce cost.
A third way Grace addresses cost was by exploring
innovation. We developed a 3-year degree option for every
baccalaureate degree program Grace offers. This innovation
required an intense 2-year development and preparation process
and had five goals, among which are requiring 120 credit hours
for all baccalaureate degrees and achieving increased
accountability.
Though the option began just this semester, very, very
early results are positive. Forty-eight percent of freshman
students indicate they plan to graduate in 3 years. Freshmen
are averaging a semester credit-hour load of nearly 17 credit
hours. Applications and deposits for next year are up
substantially, partly I think because of this new option. The
3-year degree option reduces cost 25 percent compared to the 4-
year option.
A second innovation addressing cost is Grace's Weber
School. This 2-year degree program is designed to make
education affordable in more at-risk areas among individuals
much to lose in this economy. Fort Wayne and Indianapolis are
our first two locations. We are looking seriously at other
Great Lakes cities. This program matches the first 2 years of
our on-campus 4-year degree option. The annual cost for a full-
time student in this program is only $7,800 before any aid is
applied.
A third innovation is Grace's Placement Promise. Students
meeting certain criteria may be eligible to earn an additional
year of undergraduate education tuition-free if they don't find
employment or gain graduate school acceptance within 6 months
of graduation.
A fourth way Grace addressed cost was through
collaborations and partnerships. For example, Grace
collaborated with two 4-year institutions to offer nursing and
engineering, and designed and offered the nation's only
graduate program in orthopedic regulatory and clinical affairs
in order to meet a regional and critical business need.
We realize that our 3-year degree option and our Weber
School are not for everyone, but we believe they are right for
us. We believe our changes address cost and strengthen
education and access, and we have more to do.
Thank you for the opportunity to tell you about our
efforts. I am grateful for federal funding to help students,
but higher education must be vigilant in controlling cost,
ensuring access, and increasing employability. Thank you for
your interest in this topic.
[The statement of Mr. Manahan follows:]
Prepared Statement of Ronald Manahan, President, Grace College
Good morning Madam Chair and other Distinguished Committee Members.
My name is Dr. Ronald Manahan, President of Grace College and Seminary
in Winona Lake, Indiana. Founded in 1937 and located in the northern
part of the state, Grace is an independent, regionally accredited
institution of higher education offering undergraduate and graduate
degrees. Thank you for the opportunity to testify about strategic
changes made at Grace College to address the serious matter of rising
college cost. I am pleased to provide you with information regarding
our institution's intentional efforts to address cost through
efficiency, innovation, and collaborations.
Institutional Profile
Grace College and Seminary is comprised of a liberal arts college
offering undergraduate and graduate degrees and a graduate seminary.
The institution's mission states that Grace is an evangelical Christian
community of higher education which applies biblical values in
strengthening character, sharpening competence, and preparing for
service. Grace has a fall 2011 enrollment of 1,616. The incoming
undergraduate class had average standardized test scores of 24 on the
ACT and 1055 on the SAT. The average high school grade point average
was 3.54 (4.0 scale). Students at Grace this year come from 36 states
and 8 countries. Full-time student tuition is $22,546 (covers up to 18
semester hours each semester) and room and board is $7,214.
Approximately half of our students come from Indiana. The incoming
students for fall 2011 came from homes with an average adjusted gross
income of $66,717. 95% of our students receive financial aid. Our
institutional default rate for the three most recent years is 2.9%
(2007), 0.8% (2008), and 2.1% (2009). A general overview of
institutional grants and federal grants and loans follows.
----------------------------------------------------------------------------------------------------------------
Financial aid 2009-10 2010-11 2011-12
----------------------------------------------------------------------------------------------------------------
Grace Institutional Grants (minus grad/non-trad.)............... $10,649,409 $10,696,166 $10,170,690
Pell Grants..................................................... $1,535,320 $1,808,685 $1,948,386
Perkins Loans................................................... $463,879 $466,801 $512,036
Stafford Subsidized Loans....................................... $3,247,397 $3,535,621 $4,014,510
Stafford Unsubsidized Loans..................................... $2,976,818 $2,856,314 $3,710,399
----------------------------------------------------------------------------------------------------------------
Background
For a number of years our institution has been concerned about the
rising cost of college education and specifically the cost of a Grace
College education. We realized we were pricing ourselves out of the
very group of students we desired to serve. As a result of this concern
we undertook steps to address the cost of our college through review of
institutional programs, institutional operations, innovation, and
partnerships and collaborations. The economic turbulence of 2008 and
beyond made even more clear (a) that our campus had to address rising
cost with the greatest urgency, (b) that federal and state support of
higher education was challenged, and (c) that we must find ways through
our educational mission to contribute to the local and regional health
of our economy. We could not simply stand by and wait for others to
help us with these concerns.
Addressing Rising Cost through Review of Institutional Programs
In early 2006 our institution approved a five-year strategic plan
that included among its goals the review and evaluation of educational
programming within the institution.
Strategic Initiative 3.7: Determine the most efficient and
effective academic structure
Strategic Initiative 3.8: Implement aggressively the
College's current policies on the conduct of comprehensive assessments
of each academic department
Strategic Initiative 3.9: Examine the potential for adding
new majors
In the case of every program the evaluation included enrollment
patterns, staffing, cost effectiveness, demand among high school
students, competitive advantages over similar programs at other
institutions, and other such data points. Potential outcomes of this
thorough review were placing each program into one of four categories
and their respective outcomes: (1) Program is strong, nurture its
strength; (2) program can be strengthened by selected strategic help;
(3) program needs substantive changes that, if not achievable within a
couple of years the program will be closed and taught out; and (4) the
program must be closed and taught out. The result of that major
evaluation was that six programs were taught out and eliminated. In
each case the institution helped students either finish at Grace or
transfer to another institution offering the student's program of
choice. By the end of the 2008-2009 academic year all program reviews
were completed. During this same period several programs were added
that focused more directly on areas of student program interest and
local and regional needs.
Addressing Rising Cost through Review of Institutional Operations
For more than eight years Grace has been taking steps to reduce
operational cost by seeking more efficient ways to serve students and
employees. As a result of thorough reviews the campus has strategically
aligned physical plant operations, institutional food service,
publications, marketing, and printing services with regional businesses
that provide good and cost-effective service. In these cases we have
been able to contain or reduce cost while advancing service to students
and employees.
Addressing Rising Cost through Institutional Innovations
(1) Three-Year Degree Option
In 2009 Grace College undertook a thorough study and review of an
innovative approach to all of our institution's four-year baccalaureate
programs. Our goals for this review were to stay committed to our
institutional mission, maintain baccalaureate programming that in every
case requires at least 120 semester hours (these hours as defined by
regional accreditation and federal requirements) for graduation,
increased focus on competence (not simply content), incorporate applied
learning experiences as a part of program requirements, increase
affordability for students and their families, and make use of in-depth
research through a recognized firm.
Grace College took dramatic steps to achieve these goals. The
result was development of a three-degree option (the four-year degree
option is still available to students selecting that option) for all
Grace undergraduate degree programs (approximately 54). The institution
still continues the four-year degree option but makes the three-year
degree option available in every program. This required a change to the
institution's academic calendar and restructuring every course to be
taught in the altered academic calendar:
Each semester was lengthened to include two eight-week
sessions. The two sessions in a semester are separated by a brief
vacation break.
Students using the three-year degree option take three
three-hour courses each eight weeks, completing a total of eighteen
credit hours each semester.
Students take eighteen hours each of the two semesters of
a year and do this for three years totaling 108 semester hours of
credit. Of course, students often bring with them credits earned
through advanced placement, community college courses, etc.
Students take six hours on online course work provided by
the campus for each of the two summers between the first and second
year and between the second and third year totaling 12 semester hours
of credit. Because summer work is online, students can live most any
place for work or travel and still complete the courses. No tuition is
charged for full-time students taking the 12 hours of summer online
courses.
Taking the three-year degree option instead of the four-
year option offers a 25% savings to full-time Grace students paying
tuition, room, and board, meaning at today's prices a total cost of
$89,280 instead of $119,040. These are the costs before any federal,
state, institutional, and other student financial aid is applied.
The average institutional financial aid for Grace freshmen
students for the 2011-2012 year is $10,033. At today's prices this
further reduces the total cost for a full-time three-year degree option
student to $59,181 ($89,280 minus $30,099).
Grace College's annual pricing increase for the three most
recent years averages 3.3%.
The three-year degree option allows the student to enter
the workforce a year earlier than the four-year degree option, meaning
the ability to gain up to an additional year of full-time income.
Extensive faculty interaction and training was required to
accommodate all these changes. The new three-year degree option was
launched with the beginning of the fall 2011 semester. To date we have
completed the first eight week session and are half-way through the
second session of the fall semester. While the three-year degree was
just recently launched, several institutional data points suggest the
students' attraction to the three-year degree option.
Full-time freshman enrollment for fall 2011 was 21% higher
than for fall 2010.
According to the Grace Office of Registrar 47% of first-
time students entering fall 2011 indicated at the beginning of the fall
semester that they were taking the three-year degree option.
Halfway through the fall 2011 semester 48% of the entering
freshman class indicated they are planning on graduating in three years
because of the three-year degree option.
The average credit hours taken by freshman increased
substantially for fall 2011 over the previous four years:
----------------------------------------------------------------------------------------------------------------
Average Credit Hours Taken 2007-08 2008-09 2009-10 2010-11 2011-12
----------------------------------------------------------------------------------------------------------------
New Freshmen............................................. 15.53 14.86 14.90 14.90 16.95
----------------------------------------------------------------------------------------------------------------
Recruitment for fall 2012 year-to-date is running ahead of
recruitment for fall 2011 year-to date:
----------------------------------------------------------------------------------------------------------------
Year-to-Date Recruitment Fall 2009 Fall 2010 Fall 2011 Fall 2012
----------------------------------------------------------------------------------------------------------------
Inquiries................................................... 11,097 11,488 12,299 14,963
Applications................................................ 1,058 1,630 1,983 2,559
Accepts..................................................... 412 669 967 1,410
Deposits.................................................... 34 33 34 72
----------------------------------------------------------------------------------------------------------------
(2) Two-Year Weber School
The two-year Weber School at Grace College is designed to
be offered in multiple urban areas where family incomes make the cost
of independent higher education unaffordable. This program was designed
after the campus evaluated specific research conducted regarding the
need for a cost effective alternative to independent higher education.
The annual cost for a full-time student in the Weber
School is $7,800, a dramatic savings when compared to the average cost
of independent higher education in Indiana of $25,547 (tuition only in
2010-11) or of all U. S. independent education of $27,793 (tuition only
in 2010-11).
The program is offered close enough to a student's home
that room and board expenses at the Weber School are eliminated.
In the summer of 2011 Grace received approval from the
Higher Learning Commission to offer a two-year associate degree in two
urban cities in Indiana, Fort Wayne and Indianapolis.
All courses in the program are designed and approved by
on-campus full-time resident faculty.
All courses are taught by either full-time or part-time
faculty who meet the college's faculty requirements regarding graduate
degrees, successful higher education teaching experience, and other
such requirements.
This program, named to honor a faithful supporter of
Grace, is designed to be a cost effective alternative for students and
their families who cannot afford to attend an independent college such
as Grace.
This two-year program matches the first two years of the
on-campus four-year degree option.
This allows a student completing the associate degree to
transition to Grace's Winona Lake, IN, campus to complete the student's
four-year baccalaureate degree.
If preferred, the two-year Weber School graduate can
transfer to a baccalaureate program at an institution other than Grace.
Addressing Rising Cost through Institutional Partnerships and
Collaborations
Through several means Grace College is addressing the rising cost
of higher education through forming institutional partnerships and
collaborations with other institutions and organizations.
(1) Articulation Agreements with Regional Two-Year
Institutions
Grace has a degree completion program called GOAL (Grace
Opportunity for Adult Learners) and has entered into articulation
agreements with two regional two-year institutions, Ivy Tech State
College and Ancilla College. The GOAL program allows students who have
earned an associate degree to complete a baccalaureate degree in
sixteen months. Graduates from these two institutions receive a
discounted rate which means these students are paying $300 per credit
hour.
(2) Collaboration with Four-Year Institutions Offering
Nursing and Engineering Programs
Grace has collaborated with two four-year institutions who offer
nursing degrees (Bethel College) and engineering programs (Trine
University). In both cases Grace students take the nursing and
engineering courses on the Grace campus. This arrangement gains
efficiencies for Grace, Bethel, and Trine.
(3) Graduate Education Programming Needed by Regional
Businesses
Three of the five largest orthopedic companies in the world are
located within several miles of the Grace campus. Additionally, two
major suppliers and several start-up companies are located in close
proximity as well. Grace approached these companies, asking what is the
greatest educational need the companies had that, if addressed, would
be of great help. All the companies said graduate education in
regulatory and clinical affairs. Currently Grace offers a successful
masters program in orthopedic regulatory and clinical affairs. The
program was designed in collaboration with experts in the field and is
the only such program in the country.
(4) Orthopedic Scholar Institute
Since 2003 Grace has offered the Orthopedic Scholar Institute (OSI)
to students who are accepted into the program. Those accepted receive
strategically designed learning experiences to enhance transferable
skills expected by the orthopedic industry. OSI provides students
accepted into the program with an opportunity to meld liberal arts
learning with marketplace learning and technology. These students are
given internship experiences within the industry, and their learning
experiences are designed to help give them preferred employment
opportunities when they graduate.
(5) Arranging Applied Learning Experiences with Regional
Organizations and Businesses
All Grace students are required to take twelve credit hours of
applied learning. These experiences, completed under the supervision of
faculty, are designed to provide learning opportunities that interface
classroom work with real world experiences through internships or other
applied projects.
(6) Pursuing Campus Business Incubator Designated as
Certified Tech Park by State
During the past many months Grace has been working with our county
economic development corporation, state entities, and regional
businesses to establish a business incubator on the campus and have
this campus facility recognized as a Certified Tech Park. Good progress
is being made. The incubator would provide business, engineering, and
other students with significant internship opportunities as well as
enhance the students' employability. We and others believe this will be
a great advantage to our region in terms of developing future jobs.
Conclusion
We at Grace College realize that our three-year degree option is
not for everyone, but it is right for us. It has produced encouraging
early results. Our applications for fall 2012 are up. We have attracted
interest from significant external groups within Indiana. Through our
two-year Weber School we have expanded our educational service to Fort
Wayne and Indianapolis. And we are looking to expand to other urban
areas within the Great Lakes region. Our intention is to reach into
more at-risk areas among individuals with much to lose in this economy.
We believe the innovative programs and services we developed to address
cost and strengthen education and access are the right moves for our
time and our campus.
Again, I thank the Committee and express my appreciation for the
opportunity to tell you about Grace College and our efforts. Higher
education must be vigilant in controlling cost, ensuring access, and
increasing employability. I personally appreciate your interest in this
subject and stand ready to assist in whatever way I can on this
important subject.
______
Chairwoman Foxx. Thank you, Dr. Manahan.
Mr. Merisotis?
STATEMENT OF JAMIE P. MERISOTIS, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, LUMINA FOUNDATION FOR EDUCATION
Mr. Merisotis. Good morning. Chairwoman Foxx, Ranking
Member Hinojosa, thank you very much for this opportunity to be
here. I am Jamie Merisotis. I am president of the Lumina
Foundation, the nation's largest private foundation focused
exclusively on postsecondary education access and success.
Streamlining costs and reducing tuition in higher education
isn't just a good idea, it is essential to our future. Equity
of educational opportunity is an American value that gives
every person the chance to succeed and contribute. But the most
important reason for streamlining costs and reducing tuition in
the modern economy is simple: It is jobs.
Recent estimates show that by 2018 more than 60 percent of
American jobs will require some form of postsecondary
education. Today, only about 40 percent of American adults have
an associate or bachelor's degree. For young adults between the
ages of 25 and 34, this level is only good enough for the U.S.
to rank 15th among developed countries. By comparison, a
stunning 63 percent of young adults in South Korea have a
college degree.
Lumina believes that 60 percent of Americans will need a
high-quality degree or credential by 2025 for the U.S. to
remain economically competitive. Much, if not most, of this
increase will need to come from low-income, first-generation,
minority, and adult populations. Unfortunately, we don't have
the resources to scale up our current system to the size it
needs to be in order to be able to produce the number of
graduates our economy needs while maintaining or improving the
quality of its graduates.
The best way to increase the number of highly qualified
college graduates to the level that we need is for the higher
education system to become more productive. To meet the big
goal of raising college attainment rates to at least 60
percent, productivity improvements will require a substantial
increase in the number of high-quality degrees and certificates
produced at a lower cost per degree awarded, while improving
access and equity for the least well-served populations.
To this end, Lumina is working with States and institutions
throughout the U.S. to redesign higher education to produce
more graduates at lower cost, working with our partners to
confront the core assumptions of how higher education is
structured, funded, and delivered.
Our work on productivity of U.S. higher education is based
on four specific strategies. The first is performance funding
or targeting incentives for colleges and universities to
increase college completion for underserved populations; to
shorten time to degree or credential; and to reduce the cost of
delivery.
Many States are moving to performance-funding models that
base some portion of institutional support on the number of
graduates produced rather than just the number of students
enrolled. Tennessee is it now distributing 70 percent of its
higher education appropriations based on results and quality
rather than just enrollment. This concept has spread rapidly,
with nearly 20 States already using or developing performance-
funding systems.
The second strategy is using student incentives to increase
course and degree completion. A good example is found right in
my home State of Indiana at Indiana University Kokomo, where
students who commit to completing 30 credit hours per year,
maintaining continuous enrollment and making satisfactory
academic progress, receive 3 successive years of discounted
tuition, producing a savings equal to 1 full year's tuition by
the end of the program.
The third strategy is to develop and implement new models
of delivery. For example, a consortium led by the University of
Texas at Austin is working with Carnegie Mellon's Open Learning
Initiative to offer redesigned general education courses, which
can be completed faster, in some cases twice as fast, than
traditional courses, with the same or better student
performance and knowledge retention over time.
The fourth strategy for increasing productivity of higher
education is to introduce business efficiencies to produce
savings that can be used to graduate more students. Much of
what needs to happen here is to encourage cooperation and
collaboration among institutions to improve quality and reduce
costs. Since Ohio began requiring annual efficiency savings,
their public colleges report more than $900 million in reduced
costs.
Now, in my written testimony I discussed some of the
implications of State and institutional efforts to increase
productivity related to the critical issues of federal
financial aid, data systems, and quality assurance. For now,
let me just say that federal student aid continues to be the
bedrock of support for low-income populations and must be
sustained. But innovation and creativity will be required to
serve the increasing numbers of college graduates that our
Nation needs. In addition, it is urgent that we develop
comparable data at the national level on student progression
toward degrees, college graduation, and ultimately job
placement.
And in terms of quality assurance, we need to realize we
are on the cusp of a fundamental change in American higher
education, a shift away from a system based on time to one that
is based on learning. In a knowledge-based economy, degrees and
other credentials must represent real skills and knowledge, not
the amount of time a student has spent sitting in a classroom.
Increasing the number of Americans with high-quality
postsecondary degrees and credentials is vital to our economic
future. These dramatic improvements cannot happen unless we
streamline costs and reduce tuition by making the higher
education system more productive. As you have heard, Lumina
Foundation is working on this issue on many fronts, and we
stand ready to share any and all of what we are learning with
all of you.
Thank you very much.
[The statement of Mr. Merisotis follows:]
Prepared Statement of Jamie P. Merisotis, President,
Lumina Foundation
Chairwoman Foxx and Ranking Member Hinojosa, thank you for the
opportunity to testify before the subcommittee on a topic of such
critical importance to millions of Americans and the future prosperity
of our country.
I am Jamie Merisotis, President of the Lumina Foundation. Lumina is
the nation's largest private foundation focused specifically on
postsecondary education access and success, and we are based in
Indianapolis, Indiana. I also previously founded and served as
President of The Institute for Higher Education Policy, a nonpartisan
research organization, and as executive director of a bipartisan
Congressional commission on student aid that operated in the early
1990s. So the topic of keeping college within reach for all Americans
is one that I strongly believe is of great importance to our nation. I
also am proud to say that Pell Grants and other Federal, state,
institutional, and private aid helped me afford college, so I know
first-hand the challenges of paying for the ever-increasing cost of
higher education.
Streamlining costs and reducing tuition in higher education is not
just a good idea--it is essential to our future. We've known for many
years that the benefits of higher education are numerous, with society
gaining as much, if not more, than individuals. Equity of educational
opportunity is an American value, one which gives every person--
irrespective of their financial or family circumstances--the chance to
succeed and contribute to our collective well-being. But perhaps the
most important reason for streamlining costs and reducing tuition in
the modern economy is simple--jobs. Jobs that require skills and
knowledge that can only be obtained through postsecondary education are
growing much faster than those that don't. Based on an analysis of
employment data, the Georgetown University Center on Education and the
Workforce has estimated that by 2018 more than 60% of American jobs
will require some form of postsecondary education. This trend toward
increasing skills is worldwide, and many of our economic competitors
are responding by increasing higher education attainment rates to
levels well above of ours. Only about 40% of American adults have an
associate or bachelor's degree, and the rate doesn't vary much between
older Americans--those between the ages of 55 and 64--and younger
adults between the ages of 25 and 34. Among those young working adults
between 25 and 34, this level is only good enough for the U.S. to rank
15th among developed countries. By comparison, a stunning 63% of young
adults in South Korea have a two- or four-year degree.
Lumina believes that 60% of Americans will need a high-quality
postsecondary degree or credential by 2025 for the U.S. to remain
economically competitive. Many, if not most, of this increasing
proportion of Americans who require degrees or credentials will need to
come from low-income, first-generation, minority, and adult
populations. I mention this to put the issue of streamlining costs and
reducing tuition into perspective. We all know that the increasing cost
of higher education is placing a burden on families and individual
students. But the challenge is far greater than that. Put bluntly, we
do not have the resources to scale up our current system to the size it
needs to be to produce the numbers of graduates our economy needs,
while maintaining or improving the quality of its graduates. That scale
of expansion cannot take place solely by increasing the investments
made by the Federal government, states, parents and students.
So how do we get there, without increasing costs even more?
The best way to increase the numbers of highly qualified college
graduates is for the higher education system to become more productive.
In order to meet the Big Goal of raising college attainment rates to at
least 60 percent, productivity improvement must not rely on making
higher education more selective, or be used as an excuse to serve fewer
students. Indeed, real productivity will require a substantial increase
in the number of high-quality degrees and certificates produced, at
lower costs per degree awarded, while improving access and equity for
the least well-served populations.
To this end, Lumina is working with states and institutions
throughout the U.S. to redesign higher education to produce more
graduates at lower cost. When we began this work a few years ago it was
somewhat controversial, in part because budget-cutting in the name of
productivity previously had been used to justify serving fewer
students. Few had seen the opportunities that real productivity
represents to fundamentally rethink how we finance and deliver higher
education. Today, however, in the increasingly difficult financial
conditions faced by states and higher education institutions, we are
finding that more and more state and campus leaders are willing to
confront the core assumptions of how higher education is structured,
funded, and delivered.
Our work to improve the productivity of U.S. higher education is
based on four specific strategies described in Lumina's recent report,
Four Steps to Finishing First.
The first is performance funding, or targeting incentives for
colleges and universities to graduate more students with quality
degrees and credentials. Providing a significant portion of funding in
this way gives institutions the means and incentive to invest resources
in ways that increase college completion for underserved populations,
shorten time to degree or credential, and reduce the cost of delivery.
The particular type of performance funding that many states are moving
to bases some portion of institutional support on the number of
graduates produced rather than just the number of students enrolled.
This concept has spread very rapidly, and nearly 20 states already have
performance funding plans in place or under development. Tennessee,
Ohio, Pennsylvania, and Indiana all have plans that are worth your
study. Tennessee is now distributing 70% of its higher education
appropriations based on results and quality rather than enrollment.
Ohio has a new set of formulas that differentiates completion
incentives by institutional mission. The Pennsylvania state colleges
have stuck with performance funding for a decade and achieved a 10
percentage point increase in four-year graduation rates, with increases
of 6 and 9 percentage points, respectively, for African American and
Latino students.
The second strategy for improving productivity is using student
incentives to increase course and degree completion, specifically
through the strategic use of tuition and financial aid. There is a lot
of innovation taking place in states and institutions that use student
aid to increase completion and to make the higher education system more
cost effective. In my opinion, Federal aid programs could learn much
from the lessons of these approaches. A good example is found at
Indiana University Kokomo, which is piloting a student success tuition
discount program for students who commit to completing 30 credit hours
per year, maintain continuous enrollment, and make satisfactory
academic progress. These students receive three successive years of
incremental discounted tuition beginning at 20 percent, then 30 percent
and ending with a 40 percent reduction in the senior year. For
students, the overall impact is a tuition discount over four years that
is equivalent to one-year's tuition saved.
The third strategy for lowering costs while increasing our capacity
to educate students and improving quality is to develop and implement
new models of delivery. Too often, our discussions of this issue end up
as a debate between the pros and cons of traditional vs. for-profit
delivery models, or place-based versus online delivery. The reality on
the ground is much more interesting. For example, a Texas consortium of
systems and institutions, led by the University of Texas at Austin, is
working with Carnegie Mellon University's Open Learning Initiative to
offer redesigned general education courses which can be completed
faster (sometimes twice as fast) as traditional courses, with the same
or better student performance and knowledge retention over time. Even
better, research has found that students are more likely to complete
them.
Another example of true innovation is found in Indiana, where
Governor Mitch Daniels had the idea to bring Western Governors
University to the state and make it a state institution called WGU
Indiana. Indiana promotes WGU's accredited, online, competency-based
degrees as an affordable way to educate the state's adult population,
many of whom previously may have attended college but not received a
degree. The state also offers students the opportunity to apply for
state need-based financial aid to reduce their WGU tuition, which, by
the way, has not increased since 2008. Tuition and fees for a full-time
student is $5985, which is 27% less than the average public in-state
four-year tuition. WGU Indiana does not receive state support through
the higher education funding formula. This model is being replicated in
Washington and Texas.
Last but by no means least, the fourth strategy for increasing the
productivity of higher education is to introduce business efficiencies
to produce savings that can be used to graduate more students. Much of
what needs to happen here is to encourage cooperation and collaboration
among institutions to improve quality and reduce costs. There are many
ways institutions can collaborate. Ohio has formed a statewide shared
purchasing consortium and is engaged in cost-saving collaborations
across a number of institutions. Since its state system began requiring
annual efficiency savings, Ohio public colleges report more than $900
million in reduced costs. Cooperation is even possible across states.
One great example is the Midwestern Higher Education Compact, which
offers purchasing cooperatives for liability insurance, information
technology, and student health insurance which save states and
institutions millions of dollars a year.
Do these state and institutional strategies to lower cost and
improve completion and quality have any implications for Federal
policy? I believe the answer is an emphatic yes.
First is the critical issue of financial aid. Federal aid continues
to be the bedrock of support for low-income populations and must be
sustained. But the fiscal climate and broader economic challenges means
that innovation and creativity will be required to enhance the capacity
of the current Federal student aid system to serve the increasing
numbers of college graduates our nation needs. One of the most
important elements of a reframed student aid system will be to ensure
that all Federal aid programs are designed to support student success--
as measured by well-designed indicators such as on-time progression,
course and program completion, and graduation. This does not mean that
access should be any less important in designing a new aid system--
quite the contrary. We need to continue to increase access for the
nation's fastest growing populations in order to meet our employment
and competitiveness goals as a nation. Yet access alone should not be
enough. Federal financial aid remains a critical piece of the college
success puzzle, and we must ensure that it is structured to meet the
nation's growing needs for more graduates with high-quality degrees and
credentials. We must have the courage to re-examine the entire system
of grants, loans, tax credits, and work study to make sure it all works
as effectively and efficiently as possible to support the success of
low-income students that desperately need it.
Second, we must deal with the unglamorous but essential area of
data. It is impossible to move the entire system of higher education to
the levels of efficiency and effectiveness our nation needs without
basic information on its outcomes. It is inexcusable that we do not
have comparable data at the national level on student progression
toward degrees, college graduation and ultimately job placement. In the
absence of reliable Federal data, states are developing their own
systems to provide these and other critical data. But it is hard for
states to solve this problem alone. Often, it is difficult to obtain
data about students at private and for-profit institutions, and the
interstate mobility of students and graduates poses an additional
challenge. It would be far more efficient for the Federal government to
step up and provide a genuine service to states and the public through
modernizing and improving its higher education data system. At the very
least, the Federal government should help to assure that state and
institutional data are comparable and can be easily shared to help
everyone improve the performance of higher education.
Third, and perhaps most urgent, is the Federal role in quality
assurance in higher education. We are on the cusp of a fundamental
change in higher education--the shift away from a system based on time
to one based on learning. In a knowledge-based economy, degrees and
other credentials must represent real skills and knowledge, not the
amount of time a student has spent sitting in a classroom. WGU and
other competency-based approaches are the harbingers of change, but the
full ramifications of this shift affect all aspects of postsecondary
education. We must recognize the prior learning of displaced workers,
returning veterans, and millions of others who want and need to improve
their knowledge and skills to advance their career or improve their
life. We need transparent credentials based on learning that allow us
to seamlessly connect the workforce development system and higher
education. I know the subcommittee has taken a particular interest in
this topic, and I applaud you for it. Finally, employers, students, and
the public should have a clear understanding of what degrees and
credentials represent in terms of skills and knowledge learned. Lumina
is working with states, institutions, and others to develop the tools
that will allow these new approaches to emerge--tools like the Degree
Qualifications Profile, which defines common reference points for
degrees across disciplines and institutions. These approaches will have
significant implications for the way quality assurance is addressed by
the Federal government.
Again, thank you for the opportunity to appear before you today.
Increasing the number of Americans with high-quality postsecondary
degrees and credentials--particularly those populations that are the
fastest growing and most vulnerable in our society--is vital to our
economic future. Indeed, there is no more important public policy issue
facing our nation. These dramatic improvements cannot happen unless we
streamline costs and reduce tuition by making the higher education
system more productive--substantially increasing the number of high-
quality degrees and certificates produced, at lower costs per degree
awarded, while improving access and equity. As you have heard, Lumina
Foundation is working on this issue on many fronts, and we stand ready
to share any and all of what we are learning with you.
______
Chairwoman Foxx. Thank you very much.
Mr. Foster?
STATEMENT OF TIM FOSTER, PRESIDENT,
COLORADO MESA UNIVERSITY
Mr. Foster. Thank you, Madam Chair, Ranking Member
Hinojosa, and members of the committee. It a pleasure, in fact,
to be in front of you. It is actually an honor. And having not
been in front of a congressional committee, I am probably a
little more nervous than Jamie. We were supposed to be in
Denver talking about this very topic but decided to come here
instead and testify in front of your committee.
Chairwoman Foxx. Showing good judgment.
Mr. Foster. Based on the plane flight, I think it was a bad
choice.
Our State is home to one of most efficient, according to
the Delta Project, systems of higher ed in the country. I think
we are second as you measure baccalaureate degrees, or
bachelor's degrees, based on dollars invested. We also rank
amongst the top 5 or 10, depending on the year, percentage of
our population with a bachelor's degree or higher.
That said, we face the same stresses and strains that
institutions in other States face. We took a 30 percent
reduction in State support over the last 2 years. The
Governor's budget proposes an additional reduction of another
10 percent. And, quite frankly, we anticipate that might
increase to 25 percent.
This is not news to anyone. We have been watching the
growth primarily in Medicaid, which is driving those kind of
cost-shifts in State budgets. And so we have been preparing for
this at CMU for the better part of 7 years.
Counterintuitively, what we have done is, on the revenue
side, went to a pricing model that charges students for every
credit hour that they take. Surprisingly enough, what we saw
when students pay for each credit hour, their credit-hour
activity actually went up, rather than down. And we think their
speed to degree will accelerate.
We also have done a lot of different things in terms of
financial aid. And so we do a merit financial aid system, where
if you are at 3.75 or above and have one of the other two,
either top 5 percent in your graduating class or a 29 ACT, we
give you a full tuition and fee scholarship. What we found was
that 59 percent of our students who have need also qualified
for those merit scholarships. And so what we also found is
because we have higher expectations in terms of academic
performance, the retention of those students is higher, and we
think the graduation rates are going to increase as well.
For middle-income students who get left out of the
financial aid conversation, we looked at work study. And work
study I think has been one of things sort of ignored at the
federal and State level. Because students who are engaged in
work study also retained at higher levels. And so we offer up
to 20 hours of work-study money to students regardless of need
and, again, see a significant increase in the retention. And it
is really the connection to the institution and connection to
people at the institution which we think is the critical
element in that gain.
On the expenditure side, and with some trepidation with
Chairman Foxx, we early on decided and looked at our structure,
our administrative structure--president, vice president of
academic affairs, deans, chairs, faculty, students--and we
spent about $1 million 6 years ago on deans. We made a decision
on our campus to do away with deans. Clearly, we don't save $1
million; we saved, conservatively we estimate, about a half a
million dollars. And while our faculty I think missed that
voice in administration, I don't think our students have missed
the expenditure of those funds whatsoever.
We also--because of those ongoing budget reductions, it is
sort of a continuous budget-cutting exercise. And I say
``budget-cutting,'' and then I will tell you that, in talking
with folks in our region, they push me a little bit and say,
``budget cuts or efficiencies,'' and I would have to concede,
most of them are efficiencies.
And so we have done a number of things in addition to the
deans, with rebidding copier systems to having the largest
renewable energy program, where we use ground source heat
exchange to heat and cool our buildings, which saves us about
75 percent of the cost of heating and college buildings. We get
suggestions, like in summer we now concentrate all of our
classes in one or two buildings, and so we don't cool and
maintain and clean the other buildings. And I could go on and
on, but I would be way over my 5 minutes and get in trouble
with the chairwoman.
I will tell you, according to our State agency, there are
over 500 accredited institutions of higher learning in the
State of Colorado. If Adam Smith anticipated a perfectly
competitive marketplace, I would submit to you we see it in
higher ed. And I think that is true in most States. If we are
not doing a good job, our students tell us. And if we are not
doing a good job, our parents tell us. I have an open office
hour every Monday at 2:00. I meet every 2 weeks with our
student government. I go to every dorm every semester and we
have pizza and talk about what their experience is. And we try
to listen to what our students tell us, in terms of what we are
doing.
Recently, we have been fortunate--I think Mr. Hinojosa
talked about the percentage increase. Our percentage increase
this year was 4.7 percent on tuition and fees. Regrettable,
but, again, there is this two-edged coin which is affordability
and quality. And I would submit to you that if we slash
quality, then I don't care how affordable it is, if it is not
worth experiencing, then it is not worth spending time and
money on. And the reverse: if it is high-quality and you can't
afford it, then obviously it is absolutely meaningless.
I will tell you, a little nervously, we do spend a lot of
time and energy trying to comply with and understand directions
from the U.S. Department of Education. For example, we operate
a satellite campus in Montrose, Colorado, and have for about 20
years. That community asked us to bring our medical office
assistant program to Montrose, and because of recent rules with
the Department of Ed, we have to actually submit a formal
change request, which is about a 40-page document and will take
us untold hours and time to try and get that approved so we can
meet the needs of that community.
We also spend at the financial aid office an inordinate
amount of time every year poring through policies and
directives because the goalposts move every year.
And last but not least, and with due apologies, this is a
requirement in terms of what information we have to put where
on our Web site that has to be one or two clicks away. This
cost us hundreds of hours of staff time. And, again, I
guarantee you, with 500 choices, students, if they can't find
the information that is contained here conveniently, whether it
is expense, safety, quality of programs, again, they let us
know, and they let us know with their feet by going somewhere
else.
So I have gone over a little bit, and so, with my
apologies, Madam Chairwoman, and I will wrap up right there and
just say, thank you for having us. We think this is a critical
issue and, like Jamie, the future of this country is based upon
our continuing efforts in educating both young people as well
as adults.
[The statement of Mr. Foster follows:]
Prepared Statement of Tim Foster, President,
Colorado Mesa University
Thank you, Madam Chair, Ranking Member Hinojosa and members of the
Committee for the invitation to this important hearing. I'm honored to
be with you today. Colorado Mesa University may be thought of as the
workhorse of Colorado's higher education system and we greatly
appreciate the opportunity to tell our story. Our mascot is the
Maverick, so we're used to bucking trends, challenging the status quo
and using innovation to lead.
CMU is a regional, public four-year teaching university with
offerings ranging from technical and associate's degrees (delivered by
our community college branch) to a broad array of baccalaureate liberal
arts and professional programs, as well as targeted graduate programs
that serve our region and state. We are located in Grand Junction,
Colorado, a community of approximately 100,000 people and we're the
largest regional hub between Denver and Salt Lake City. With an annual
economic impact of over $317 million, CMU serves all of northwest
Colorado; a region roughly the size of South Carolina.
The topic of your hearing today is quite timely. As you'll hear
from Ms. Wellman with the Delta Cost Project, Colorado has one of the
most productive higher education systems in the United States. Further,
our state is home to one of our nation's highest percentages of adults
with postsecondary education. That being said, we face numerous
challenges with access, affordability and making sure our doors are
always open to every student who has worked hard and is interested in
pursuing a higher education.
As an access institution, we pay special attention to first
generation students and students with documented financial need as this
is a significant proportion of our region's population. Recently, CMU
has seen high need enrollments jump from 2,481 students in 2009 to
4,643 students enrolled this year. Interestingly enough, last year we
found that 59% of students receiving institutional merit based awards
also had documented financial need. As a matter of principle, we have
found that granting students institutional financial assistance based
on merit--rather than arbitrary financial calculations--results in
greater retention and a drive to perform academically to maintain
eligibility for the award. On our campus, we have seen first-hand the
positive impact of students earning a hand-up, not simply receiving a
hand-out.
Along with our efforts to focus resources on merit-based aid is our
university's commitment to work study. As we've watched the number of
federal and state work study awards shrink in recent years, we
developed our own program known as MavWorks to match students that want
to work with jobs around our campus. These students work no more than
20 hours per week during the semester but they wind up with a direct
connection to the institution in the form of contributing to our shared
success. Equally important are the human connections student workers
develop in departments ranging from athletics to grounds-keeping. This
direct connection results in higher retention which we all care about.
If you look around our state and region, you won't find an
institution more focused on low administrative overhead, conservative
budgeting and strategically serving students than Colorado Mesa
University. To be sure, budget cuts at the state level have keenly
focused our attention on running a tighter ship while striving to keep
costs low and transparent for students.
When our administration took the helm in 2004, the institution was
operating in the red, enrollment was flat and our community was eager
to see CMU live up to its full potential. Right away, we began scouring
the budget to identify cost savings, efficiencies and opportunities for
self-sufficiency. This analysis included a hard look at our price
point.
With apologies to Chairwoman Foxx whose great experience in higher
education probably included the title of ``Dean'' along the way, we
immediately flattened our organization by eliminating Dean positions on
our campus, which saved us more than $500,000 per year.
We convened an Academic Program working group to assess all
academic program offerings in the context of our role and mission to
make recommendations on which programs the university should continue
to fund. The process was tough, it included many difficult
conversations around our campus, but it resulted in our Board of
Trustees actually eliminating twelve programs and reluctantly letting
go a very talented, tenured faculty member.
Much like Colorado's system of higher education in general, CMU has
been a leader in university efficiency. Our faculty members carry a 4-4
teaching load (teaching four classes in the spring along with 4 classes
in the fall); double that of most R1 institutions. On the operations
side, we have created a continuous improvement mentality whereby every
year we identify new ways to operate better, smarter, more efficient,
and for lower costs. From re-bidding copier services; to developing our
region's largest renewable energy ground-source heating and cooling
system; to shuttering unused buildings in the summer time; CMU is
diligent about keeping operations costs low. We do this because it
allows us to reinvest in what matters in our line of business: top
notch faculty, facilities, technology and support for students. Because
people are at the center of our success as a university, I personally
interview every single prospective faculty member to ensure their
professional value system aligns with what we value at the university.
It's that important.
To be sure, this new approach took some getting used to around our
campus. But I'm proud to say that our entire campus community has
embraced it because it yields results and it puts students first. To
us, this is more than a slogan, it defines our operating philosophy and
how we conduct business.
For example, on move-in weekend, you'll see our leadership team and
our trustees helping students move in to residence halls. Throughout
the semester you'll see us eating pizza with students in every dorm
across campus soliciting feedback and asking for suggestions on how to
improve what we do. What we find is that by listening, really
listening, to what our students are telling us, we can innovate and
stay ahead of things that might otherwise serve as barriers to student
success.
You see, Madam Chair, CMU understands who our customers are.
Students. In Colorado alone, over 500 accredited institutions are
competing with us. On our campus, we believe competition is a good
thing, whether it's athletics, entrepreneurship or academics.
Irrespective of how regulators in Denver--or even right here in
Washington, D.C. tell us how to run our institution, if we're not doing
a good job, I'll hear about it. I have an open office hour every Monday
afternoon and if we're not doing something right, students are not
afraid to come and tell me. Perhaps even more importantly, if we do not
prioritize student success and the conditions necessary for students to
thrive, our customers (our students) vote with their feet. And right
now, our focus is to keep costs in check, provide students a great
value, and deliver to them an outstanding undergraduate education.
Watching our enrollment grow by double digits over the past few years
leads me to believe we're on the right track.
In visiting with students and parents, I can assure you that
families are very aware of cost and finding the best value for their
education dollar. This year in Colorado, the average tuition and fee
increase at other public colleges and universities was over 13%--ours
was less than 5%. I've heard many times that families chose Colorado
Mesa University not only for the quality of our programs but also
because each education dollar can be stretched further on our campus.
All of the aforementioned cost savings measures coupled with our
constant focus on interaction with students allows CMU to keep costs in
check for students while investing in those things that matter.
It is worth noting that none of our success would have been
possible without a strong, engaged Board of Trustees. Our Board
constantly challenges me to define success and help identify ways to
measure it. To me, success is defined by providing a high quality
educational experience with a sharp eye towards the costs associated
with delivering it. If first generation and middle income students
cannot afford our tuition, the level of quality is rendered
significantly less meaningful.
Because higher education is such a competitive arena, I implore you
to let the market work. Keep an eye on regulations that unnecessicarily
burden institutions that are trying to do the right thing for students.
Seek out innovation and flexibility measures that enable institutions
like CMU to do the most good for students. Ultimately, keep your eye on
the prize--and trust students and prospective students to keep us
accountable. As public financial support continues to shrink for
institutions like CMU, we will have no choice but to continue
innovating and enhancing our self-sufficiency. We think we're up to the
challenge and I look forward to your questions.
Thank you, Madam Chair.
______
Chairwoman Foxx. Thank you very much, Mr. Foster.
Again, thanks to all of you. I think you did a commendable
job of transmitting a lot of information in the short period of
time that you were given, and I appreciate the effort that you
made.
I will begin now with our questioning from the members to
you all. And most of us make some comments before we go ahead
and do the questions. And I did want to say that I appreciate--
I read your written comments last night, and these will be in
the record. And I want to say to anyone who is interested in
getting a fuller perspective on the things that you said that I
would commend the materials that you submitted. And I will make
two or three brief comments, and then I will ask a couple
questions.
Number one, Mr. Foster, I really appreciated your saying--
and you didn't mention this in your comments--that CMU
understands who our customers are: students. As someone who
worked in institutions of higher education, I think too often
there is a failure on campuses to recognize that.
Ms. Wellman, at some point I think we should talk a little
bit more about the area of benefits and how that is driving
costs, because I am not sure that we have had a full enough
discussion of that.
And as somebody who has, again, worked in this system for a
long time, or did work in the system for a long time, I would
like to see us talk a little bit more about what we have known
about innovative programs for a long, long time and how they
are working. It seems to me we have known a lot of these
things. We have known about student learning styles, we have
known about dual credits and things like that that I think
perhaps don't get enough attention in the public arena and
aren't presented as alternatives to increasing spending that
are ways that we could reduce cost.
And, Mr. Merisotis, I could not let this meeting go by
without commenting on the really impressive comments that you
made about a system based on learning and not on time. I am
very impressed with that approach that the Lumina Foundation is
taking. And, obviously, we need to do more of that in higher
education.
I wonder, Ms. Wellman, if you have any other examples that
you would like to give about how institutions are dealing with
State spending shortfalls. Very, very quickly, do you have any
other examples that you would like to present?
Ms. Wellman. The general pattern, as I mentioned,
historically has been for public institutions to offload a lot
of the reductions in State spending on the student tuitions. I
think in this recession institutions figured that they have hit
the wall on that, and we see much more evidence now of big
public systems, as well as small institutions, paying a lot of
attention to cost-cutting and productivity.
They are cutting back on--they are paying attention to
student credit accumulation. They are going into purchasing
cooperatives. They are tackling health care. So I think there
are a lot of good examples, more now than we have ever seen
before.
Chairwoman Foxx. Mr. Foster, would you mention something
more about what kind of scaling back--you mentioned scaling
back administrative and operational costs. Tell me a little bit
more about how you address some of those concerns. I am
intrigued about, for example, the summertime, using only a
couple of buildings and cooling them. That seems to me to be
something that more and more schools could do; the same thing
in the wintertime.
Would you mention something more about that? And how did
you address the concerns that were expressed on your campus?
Mr. Foster. Well, when I first got to campus, we were
actually operating slightly in the red. And so, one of the
first things--that is not a sustainable model, as we all
appreciate. And so, the dean concept came up. We did the
traditional approach, which convened a committee, unfortunately
an even-numbered committee. I was not very seasoned at the
time. And they came back three-three and said, you know, we
would tie on whether we eliminate deans. Although, the other
three said, if money is an issue, then we would have to join
those who say it is time to walk away from deans.
We have also engaged the campus as a whole, though. The
classroom idea in the summertime--we have a suggestion spot on
our Web site, and we get suggestions all the time. We have
rebid our insurance. We were able to pull out of the State's
insurance pool, and we were effectively underwriting the
Department of Corrections and Department of Transportation,
which are obviously much riskier than teaching on a college
campus. And so we are able to save money there.
From a student perspective, I should go back and say--
because we chatted a little bit earlier--one of the things that
our students have the ability to do and I think was an
experience you had when you were president was dual-enrollment:
students who in high school can take college credits while they
are in high school. And in Colorado, the school district
actually pays for those courses. And so we have students who
increasingly start with 20, 30, 40, as much as a full year
under their belt, and so it just gives them a running start.
And really, maybe they aren't completing in 3 years, but it
somehow feels like they are paying for much less.
Chairwoman Foxx. One more quick question. The program that
you mentioned that you want to take to another place, is that
program already approved by all the approval systems on your
campus and you are having to do the regulatory process all over
again just because you are moving it to another place? Is that
what I understood?
Mr. Foster. Yes, ma'am. What is ironic about it is, in
Colorado we are actually--and it is one of these federal agency
trumping State, kind of, statutes as well as State
regulations--we are designated as a regional educational
provider for the western part of the State, about the size of
the State of West Virginia. And so, what we are supposed to do
is deliver all of our programs, which are all completely
approved and as you described. And so it is just a matter of
that community would like us to take that program within our
region 50 miles down the road.
And for some reason--and I think it has to do with the
debate you all had about proprietary schools and those sorts of
things here fairly recently. And so them trying to ratchet back
and tighten up the controls on colleges' abilities to offer
programs in different locales. It just makes absolutely no
sense to me whatsoever. But we will write a 40-page report and
go through the process, right?
Chairwoman Foxx. Well, our subject today is not regulatory
reform, but it is an issue we are very concerned about.
Mr. Hinojosa?
Mr. Hinojosa. Thank you.
I have found your presentations, each one of you, very
interesting, and I certainly hope that we can take advantage of
your sharing your success stories.
My first question is to Jamie from Lumina Foundation. The
federal government's continued role in ensuring access to low-
income and traditionally underserved populations is exceedingly
important throughout the country. Briefly, tell us how do you
square the national goal of increasing the number of college
graduates with controlling costs.
Mr. Merisotis. Yeah, thank you very much.
You know, I think there is no issue more important than
increasing high-quality degree attainment for our nation's
least-served populations: low-income, first-generation,
minorities, and the important population of adults as well.
I think that we need to think hard about these issues of
productivity and not see productivity as something that is
actually being done by somebody to somebody but, in fact,
represents an opportunity to increase the capacity of the
system to serve more students. And so, we can't expect parents
and their students to bear the increasing cost of higher
education without there being very high consequences for us as
a country. And what we have done in the last decade or so is
essentially shifted more and more of that burden to them.
So productivity represents the best path forward in terms
of increasing the capacity to get the students into and through
college as quickly as possible and help them to become
productive members of our workforce and our society.
Mr. Hinojosa. May I ask, will you elaborate on how the
federal government can work with States and institutions to
better collect and disseminate clear and concise information on
those college costs that you all talked about?
Mr. Merisotis. Yeah, I think it is going to be extremely
important that we have comparable data based on progression, on
completion, and on job placement for students. There are lots
of cases where the data systems simply don't allow to us make
effective decisions about how well students are doing and
whether or not the system of higher education is actually
serving our goals as a country.
In moving from that time-based to that learning-based
system of higher education that I mentioned, where student is
the unit of analysis and not institutions, I think we have an
opportunity to better serve the students by using these federal
data systems, as well as the State institutional data systems
and collaboration, to help us better understand where the
challenges are and how to serve those students better.
Mr. Hinojosa. Thank you.
Tim Foster, in your written statement, you used the phrase
``arbitrary financial calculations.'' What do you mean by
``arbitrary financial calculations''? And are you referring to
the calculations used to determine student eligibility for the
federal Title IV program, or is it something else?
Mr. Foster. We would be referring to the Pell Grant and the
eligibility for Pell Grants, as well as their student loans,
and how those change and how much attention we have to pay and
our financial aid staff have to pay, because the rules change
every year in terms of, if you are in this major, are you
making this much progress.
And, at some point--you know, I served in the State
legislature, and I will never forget, we had a district
attorney; we were debating sentencing. And he said, you have to
have some confidence in the district attorney's judgment. And I
would submit to you that we would be much more effective if we
had a little more confidence in financial aid officers'
abilities to package and have flexibility in terms of students
that they want to give that aid to and feel are making
progress. Trust me, they are not out there trying to give aid
to students who aren't progressing.
And, you know, there just are inconsistencies in terms of
what my major is, and if I fail this class and it is not my
major, okay, then I am still eligible, but if I fail this class
and it is in my major, then I am not eligible. And it is just
the sort of one-size-fits-all parameters that just really gets
in the way and leads to all sorts of crazy gyrations and
machinations to try and maintain those students in college.
Mr. Hinojosa. Mr. Foster, CMU saved $500,000 by eliminating
all the dean positions. Will you point specifically to where
the savings was invested in students attending--CMU students?
Mr. Foster. What we have been able to do--and, again, the
chairwoman will appreciate this. On a college campus, you
really can't start new programs, because new programs are like
small businesses. They all lose money the first year. You can
imagine, if we started a new program, a bachelor's degrees of
nursing or, you know, pick a construction management program or
mechanical engineering program--all programs we have started--
none of them will be fully enrolled, and none of them will
carry themselves. And so, what that half-million dollars in
savings allowed us to do was to have actual revenues over
expenditures so that we could start those kind of programs.
And it is those kind of programs--and I guess I would go
back to the old NAACP ads, which were, you know, ``Go to
college, get a better job.'' All right? If you don't have those
degree programs--and we have added the better part of about 20,
all of which have double-digit employment opportunities over
the next decade. And first-generation students, in particular,
find it very compelling, as do all students: If I go into this
major, what am I going to do with it afterwards?
And so those revenues enabled us to start those variety, 1-
year, 2-year, 4-year degree programs, which create wonderful
opportunities. And, for us, our strength as a 2-year, 4-year,
and graduate institution, you can come and in 1 year have your
certificate, be a nursing aid and be working, pursue your 2-
year AAS R.N., continue working, pursue you bachelor's in
nursing, continuing working, come back now and get your doctor
of nurse practice.
And so, those sorts of things are what we think are going
to help people and keep them committed, because they lose
focus. Why do I need a college education? And it is really that
employment opportunity.
Mr. Hinojosa. Thank you very much.
My time has expired, but I hope that one of my colleagues
will address Grace College's 3-year degree program, because
that really caught my attention.
Chairwoman Foxx. Go ahead.
Mr. Hinojosa. I yield back.
I can ask that question?
Chairwoman Foxx. Sure.
Mr. Hinojosa. Excellent.
Ronald Manahan, I liked your discussion with us, your
dialogue with us on the 3-year program, saying that it ends up
offering 25 percent savings to the full-time Grace students
paying tuition, room, and board.
Tell us a little bit more about the few years that you all
have carried this out and why more colleges are not using your
model.
Mr. Manahan. Thank you for the question.
Our understanding was that we were, in some sense, beholden
to more of an agricultural calendar on the economic year. And
we asked the question, is there another way to conceptualize
the academic calendar? And we did. And the basics of the
program is simply this: that each semester is divided into two
8-week sessions with an extended weekend break between them.
And that is repeated both in the fall semester and the spring
semester.
When students enroll in the 3-year degree option, they take
three 3-hour courses in the first 8 weeks. So the focus is
narrowed down to three as opposed to five courses, and it comes
at them more quickly, if you will. They repeat that again in
the second 8 weeks, so at the end of the first year they have
completed 36 hours.
Mr. Hinojosa. So that means that it is the equivalent of
taking 18 credit hours per semester under the regular program
that we know?
Mr. Manahan. That is correct.
And what we have learned about that is this: having taught
for a lot of years in a more traditional format, Monday,
Wednesday, Friday, so on, there is a lot of stop-and-go traffic
that happens in the classroom. You teach, then there is a long
weekend, and you come back and you are hooking up to the
previous time, and you are moving forward. This reduces some of
that.
And we have learned from students that, once they adjust to
the pace of it, they are intrigued with and seem to prefer
narrowing the focus to three as opposed to five scattered over
a longer period of time.
Mr. Hinojosa. That is an interesting response to my
question. And I will close by saying, is it possible that those
taking that program, that 3-year program, that they could work
some number of hours per week of, say, 10, 15, or 20 hours? Is
that possible?
Mr. Manahan. I think it is, if they chose to. Another
element of that 3-year degree option is that we require of all
students 12 hours of applied learning. That is, they must
participate in an actual, real-world situation to test the
value of what they are getting in the classroom, how they are
progressing. And we do that to advance their employability. And
there are some other elements to that, but I will----
Mr. Hinojosa. Thank you, Madam Chair.
Chairwoman Foxx. Thank you, Mr. Hinojosa.
Ms. Biggert?
Mrs. Biggert. Thank you, Madam Chairwoman, and thank you
for holding this hearing. I think this is really very timely
and very important.
And thank you, all the witnesses, for being here.
In thinking about this and the revenues that come in, one
thing that wasn't mentioned--and I know that colleges really
try and keep their alumni involved by participating in the
fundraising that the universities and colleges do.
Maybe, Mr. Foster, you could speak to that. We have seen a
reduction in the appropriations from the State and federal. Has
there been a decrease in the giving by alumni or others to the
universities?
Mr. Foster. Well, Madam Chairwoman, as you identify, you
know, those reductions in State support, one way that we can
try to make that up is, in fact, with donor and particularly
alumni. And I would say that while the dollar amount per gift
has declined, actually the number of gifts have increased. And
so we have a broader pool, although they are giving less
intensely.
And so it helps. It is not the entire solution. It is like
any problem you have, you look around and you try and find as
many possible contributors to solving that problem. And that is
certainly one of them.
Mrs. Biggert. Okay. Thank you.
And then, Ms. Wellman, you know, there is thought to be a
view that in higher education that institutions like to keep up
with the Joneses and the other universities. I took a tour of
one of the universities in my State of Illinois, and it was
great. The one thing that I noticed was this huge building that
was just being built, and it was beautiful, huge. And I asked
what it was, and they said, ``Oh, that is the fitness center.''
Now, this is very important to me, and Illinois is the only
State that even has PE every day for K-12. So fitness is very
important. But in this time of--and I asked, ``Well, why are
they building this?'' And they said, ``Because we need to have
that to get the students to come to the university.''
How could we, you know, make sure that the colleges provide
the things that are necessary for kids? But is this something
that is done to really keep up with other universities, the
competition?
Ms. Wellman. It is a good question. I don't have a great
answer.
I think that many institutions face a double-edged sword in
this environment. It is a very competitive environment. They
are looking more and more to students as a consumer. They need
to get the students who have the money to pay, and the students
who have the money to pay want to have those facilities. And so
they say they need to have it in order to compete in the market
they are in.
I think that the competition for amenities rather than for
academics, putting the money into the academic program, is of
great concern to a number of educators. You see spending going
up on athletics more than it is going up on academics. It is
going up in dorms; it is not going up in student support.
I think it is the nature of the consumer reality, though,
that those kinds of immediate, palpable benefits are ones that
students seem to want to have. And so I think it is a tension
that isn't easily resolved.
Mrs. Biggert. Thank you.
Then, I co-chaired the House Financial and Economic
Literacy Caucus with Mr. Hinojosa. And we have had this for
years and years. And I think that it is really important that--
it is critical for information like this to be available to
students and their parents.
And, Mr. Foster, given your close interaction with
students, how much of this responsibility should fall on
students to be informed consumers? And are they, when they are
coming to the school? And is there more that students and
parents can do, as consumers, to help increase the competition
among institutions of higher education so that they are picking
the school that really fits their financial needs?
Mr. Foster. Well, I would say a lot of responsibility
obviously falls on our shoulders, in terms of making sure that
information is available to them. And we really look at--a good
match for the student is critical for us. You know, not having
them retain and finish at Colorado Mesa University is kind of a
personal affront to us.
And I would tell you, increasingly--and you could probably
go back, you know, to 9/11--that, all of a sudden, I think you
saw a change in terms of family, parents, and students, and
nontraditionals' behavior in terms of their inquiry and pursuit
of information relative to: If I come, will my son or daughter
finish? What is the total cost of attendance?
And we emphasize to them total cost of attendance, because
they always want to whittle it down and assure themselves that
they will be able to afford it. And we try to say, don't do
that because you have to be prepared for this cost. Mind you,
ours cost is significantly less than a lot of the institutions
that we have talked about.
But it is a two-way street, I guess would be my answer to
you. And I think it is a place State agencies can play a big
role, in terms of--when I was at the Department of Higher
Education, we really transitioned away from that regulatory
role to being more--and published a consumer guide and found
that people in Colorado had more faith in that because it was a
third-party, objective listing of costs, expenses, graduation
rates, retention rates. And then you can evaluate for yourself
which school you want to go to.
Mrs. Biggert. Thank you.
I yield back.
Chairwoman Foxx. Thank you, Ms. Biggert.
Mr. Bishop?
Mr. Bishop. Thank you very much, Madam Chair. And thank you
very much for having this hearing. I think it is a very
important topic, and I think our witnesses have provided us
with very helpful testimony and very enlightening testimony.
Mr. Foster, I wasn't going to do this, but I just wanted to
start. You made reference in response to the question from Mr.
Hinojosa to shifting eligibility for federal assistance based
on a student's academic major. I am not aware of any
eligibility standard that the federal government maintains that
differs for any of the Title IV programs based on a student's
major. Am I missing something?
Mr. Foster. Let me do this, let me get you some additional
information. I am not a financial aid expert, I am just a
president, and so we are obviously the least informed.
But as we talked about in preparation for this hearing, we
talked about the fact, if, in fact, I take--and it ties to
satisfactory academic progress. And so if I am taking biology,
for example, as a biology major and I fail that course, then,
in fact, that puts in doubt my eligibility for federal
financial aid. If I am not a biology major, I am a political
science major, I fail that same course----
Mr. Bishop. I am going to respectfully disagree with the
advice that you have gotten. Eligibility for financial aid on
the federal level, to the best that I know--and I administered
student financial aid programs for a number of years before I
came here--is rooted exclusively in information provided on the
FAFSA, which is subject to a so-called uniform methodology
which spits out a bottom line called the ``expected family
contribution,'' which, by the way, is not perfect but it is, I
think, the best system we have.
So if you do learn of something, I think we would--I, at
least, would like to know about it. And I thank you.
Ms. Wellman, thank you for your testimony.
I just want to be clear. You have found that the principal
driver of increased student tuition is cost-shifting--that is
to say, reduced State appropriations for publicly supported
colleges and for all colleges reduced philanthropy, reduced
income from endowment and so on. Is that correct?
Ms. Wellman. Yes. In the public sector in particular, it is
cost-shifting. There is a little bit more evidence of increased
spending driving tuition among some private but not all private
institutions.
Mr. Bishop. When you say ``some private'' with increased
spending driving tuition, is that more localized in what we
might refer to as the elite privates?
Ms. Wellman. Actually not. It is the institutions that
don't have the endowments that----
Mr. Bishop. That are trying to keep up?
Ms. Wellman. That is right.
Mr. Bishop. So they are trying to walk that tightrope that
Mr. Foster talked----
Ms. Wellman. That is right.
Mr. Bishop [continuing]. About, about increasing quality
while at the same time maintaining affordability?
Ms. Wellman. Yes. That is exactly right.
Mr. Bishop. Okay.
One of the things that we hear frequently is that--and
there is a very forceful proponent of this notion that I am
about to suggest, a man named Richard Vedder, who we hear
frequently tell us that the reason costs are increasing is that
federal student aid is increasing, and because federal student
aid is increasing, that gives college administrators the
license to raise costs beyond what they normally would.
Does your data give you any evidence that that is true?
Ms. Wellman. No.
Mr. Bishop. Okay. Thank you. I appreciate that.
Dr. Manahan, I administered a small college that was
particularly good at being not for profit. And I wanted to
commend you for your efforts, and I really think they are very
good and very innovative.
But I wanted to quickly--the little over $10 million of
institutional aid that you administer, what proportion of
tuition revenue does that represent? So, in other words, what
is your discount rate?
Mr. Manahan. It is about 40 to 41 percent, in that range.
Mr. Bishop. So, if you will, your gross sales are 100
percent and your net sales are roughly 60 percent; is that
right?
Mr. Manahan. Yes, exactly.
Mr. Bishop. And does that represent discounted tuition, or
does that represent income from endowment and philanthropy that
allows you----
Mr. Manahan. It is almost entirely from tuition.
Mr. Bishop. Okay, so you discount tuition to that extent.
Do you have any sense of where that places you among
comparable institutions? I was in New York State. When I left
New York State, the average discount rate was somewhere in the
low 30s. That was 9 years ago.
Do you have any sense of where that puts you?
Mr. Manahan. Yes, I do. There are a few discount rates over
50 percent. We certainly are not there. Depending on endowment
levels, if you think of comparable endowments to ours, you
might find some in the upper 30s. But we have worked
religiously to move that to this level and find an operational
path to succeed on at that point, if that is----
Mr. Bishop. Okay.
Mr. Manahan. Yes.
Mr. Bishop. And is the $10 million principally need-based,
or is it a combination of need and merit?
Mr. Manahan. It is a combination of need and merit. But
given the nature of the students we serve and families from
which they come, there is----
Mr. Bishop. The merit would have been justified by need
anyway.
Mr. Manahan [continuing]. Included in that.
Mr. Bishop. Okay. All right.
Thank you very much, Madam Chair.
Chairwoman Foxx. Thank you, Mr. Bishop.
Dr. Heck?
Mr. Heck. I thank you, Madam Chair.
And thank you all for your testimony today.
Student aid and the cost of postsecondary education is
personal to me on two levels: One being 23\1/2\ years since I
graduated medical school and still paying what I affectionately
call my ``second mortgage'' on my student loans, and the fact
that my daughter is a recent graduate from UNLV and her
deferment period is about to end.
I am intrigued by both Mr. Merisotis' comments and Dr.
Manahan's on your, kind of, training to success as opposed to
time. After spending 21 years in the military, if there is one
thing we are experts at, it is training to time and not to
standard. We are the foremost experts at cramming 30 minutes of
information into 2 hours.
Of all the areas that we have talked about driving cost,
two questions: Do you believe, anybody, that there is an
increased cost due to duplicity amongst programs in States'
systems of higher education? I can tell you that in my State,
Nevada, we went through a period where community colleges
decided to offer 4-year degrees, the State college decided to
get into advanced degrees, and the competition that causes with
the 4-year academic research universities.
And, secondly, is there an increased cost due to the need,
perhaps, to provide remedial coursework for matriculating
freshmen who aren't quite up to standard? And is that due to
the fracturing of the K-12 and postsecondary approach as
opposed to a P-16 approach to education?
Mr. Merisotis. The question on duplication--look, I think a
lot of that has been eliminated. There is still some of that in
existence, but with the economic crisis that we have faced,
there have been a lot of tough choices that institutions have
had to make in States.
And one way I think you can see that being promoted is
through performance-based funding models that I mentioned in my
testimony, where you differentiate by mission. You have a
better chance of being clear about what you expect of
institutions based on their institutional mission. And,
therefore, you can create incentives so that you don't have
these overlapping programs and things like that.
So in the time period of cost-cutting where--and I think we
have gotten pretty close to the end of that because there is
not a lot left to cut in a lot of States--what we are seeing is
that these efforts to differentiate mission is a very important
outcome, actually a potentially positive outcome, of the
unfortunately challenging economic times.
Mr. Heck. Anybody else on the issue of the requirements for
remedial work in a K-12 postsecondary approach versus a P-16
approach to overall education?
Ms. Wellman. Remedial education is clearly a cost-driver.
It is not a smoking-gun kind of cost-driver. It is actually a
fairly low-cost education. I think the big problem with
remediation is it isn't working very well. The proportion of
students who get into it who are successfully remediated who go
on to some kind of academic success is just way too low.
So I think we have a big conundrum in there about making it
more cost-effective, reducing costs, but actually making it
work better. It is a big problem.
Mr. Foster. I think it is a student cost-driver. It is a
zero-credit course--developmental courses, that is. And so it
is amazing what percentage of students come in and require--
primarily in math but significantly in reading/writing as well.
The chairwoman and I spoke a little bit about dual
enrollment. And you have some districts that are taking a lot
of ownership. In Colorado, we have community colleges, as well
as ours, that partner up with some of our area high schools. We
identify those students who need developmental education at the
junior level when they take the ACT, and then on their campus--
actually, we send instructors over, and the district pays for
those instructors. And then when they graduate, they are
college-ready.
But it really is more an individual cost-driver, delaying
them in time as well as in tuition.
Mr. Heck. Great. Thank you.
Thank you, Madam Chair. I yield back.
Chairwoman Foxx. You get the gold star for today.
Mr. Grijalva?
Mr. Grijalva. Thank you, Madam Chair, and thank you for the
hearing.
Mr. Merisotis [continuing]. Did I say it right? No.
Mr. Merisotis. It is fine.
Mr. Grijalva. No, I have a lot of vowels, too, and it is--
--
Mr. Merisotis. Yeah.
Mr. Grijalva. Your point about performance funding is a
very good and valid point, and thank you for that.
But let me ask you a little bit about the phenomena--not a
phenomena--the reality of the income disparity that is
happening in this country. And one of the--the major tool to
close that gap is education, and particularly postsecondary
education. And so, as we look at making sure that that
educational equity part of the discussion is applied to the
next generation, let me talk a little bit about the TRIO
programs.
And can you discuss how increased investments in those
programs and similar programs across the country might help
mitigate, first, the increased tuition costs by helping
students degree and the preparation gap that also has to
happen?
Mr. Merisotis. Yeah, absolutely. Look, your point about
equity is absolutely right, which is that equity of educational
opportunity is extremely important. That equity has to include
both improving access to higher education and ensuring that
those low-income, first-generation, minority, and other
students actually have an opportunity to succeed.
And I think that is what a lot of what is going on in these
performance-based funding models is efforts to ensure that they
are actually successful. In Indiana, for example, the
performance-based funding model actually takes into account the
success of low-income students in the population.
The federal TRIO programs have been one of the most
important efforts at the federal level to increase
opportunities for first-generation and other students for
decades, and I think they are extremely important in terms of
our future. We have to recognize that students don't just pay
for college; they actually have to be prepared for college and
they have to succeed academically, financially, and socially.
And that academic, financial, and social support comes from
TRIO programs because they help students better understand the
system, work their way through the system, getting into and all
the way through college. So TRIO is a very important part of
the overall federal landscape.
Mr. Grijalva. And, if I may, Mr. Foster, you mentioned the
regulation issue that Mr. Bishop asked you about. And I agree
that regulations should be streamlined for schools. But I think
there are also very important reasons for them. They are
important to help us understand rising costs, prevent
accidental or intentional misuse of taxpayer funds.
And you mentioned that you have spent hundreds of hours, as
an additional cost, in preparing the school's information that
the students expect to have and that they have to have before
they make their decision. Doesn't that information make it--the
information you have to generate for the federal government
also available in the same sense?
Mr. Foster. And it is an important observation. All of the
information that came out and was required to be one or two
clicks away was contained in different places that we thought
were more intuitive. And we spent a lot of time--I am sure like
Dr. Manahan--you know, with focus groups, with students,
saying, ``Where do you look for this information? What do you
want from us? What do you want when you make a decision?''
Mr. Grijalva. So you are saying they are not comparable.
Mr. Foster. I am just saying that what we had is we had it
collected where we thought students would go, and then what we
had to do was reconfigure it to make sure that students could
be one or two clicks away.
Mr. Grijalva. Okay. If I may, Mr. Foster, let's talk about
that reconfiguration. One of the things that I think was a
great accomplishment that the last Congress did was creating
the income-based repayment program so that students would be
able to manage their debt.
Can you speak to efforts that your college has undertaken
to inform students about that program and as a means for them
to be able to manage that debt? Is that part of the information
they receive?
Mr. Foster. Actually, apart from that information, that
whole one-click-away, which is really different sort of data
and information than what you are talking about, we look and
monitor our average student loan debt, and it is an issue that
we try to track very closely. And so what we have done is
actually added a person in our financial aid office who all
they do is debt counseling.
Mr. Grijalva. Okay.
Mr. Foster. Because in student loans, unlike in a banking
situation, nobody sits down and says, ``This is how much you
can afford to pay back based on your occupation.'' And so we
have tried to create that person who sits down with those
students and says, ``This is how much you can really afford to
borrow as you graduate and you want to pay it back and you want
to pay it back in a reasonable amount of time.''
Mr. Grijalva. Okay. That is excellent.
The elephant in the room: On the debt side and the loan
side, 40 percent of the debt that students have is through for-
profit colleges, which represents about less than 30 percent of
the student enrollment.
And do you see that as--anyone--do you see that as a factor
affecting cost and as a factor about the regulatory intent of
trying to find out what debt is and who is responsible for that
debt? To anybody.
I am out of time. That was my best question, too.
Ms. Wellman. If I might very quickly, the data we have on
spending, revenues and spending, we can't include for-profits
because of the problems in comparable data. It is something
that the Feds ought to deal with----
Mr. Grijalva. Thank you.
Ms. Wellman [continuing]. And we have to step up, too.
Because I can't answer----
Mr. Grijalva. Great.
Ms. Wellman [continuing]. Your question because the data
aren't there.
Mr. Grijalva. Thank you very much.
Thank you, Madam Chair.
Chairwoman Foxx. Thank you, Mr. Grijalva.
Dr. Roe?
Mr. Roe. Thank you, Madam Chairman.
And thank the panel for being here.
I think our higher education system in America is the best
in the world. I think there are two great issues that we face
in this country right now, and those are rising health-care
costs and rising education costs. Probably not a one of us
sitting up here at this dais has not benefited from a great
college education--and, basically, public education. I went to
school for 24 years, and, Dr. Manahan, I went to medical school
in 3. I wouldn't recommend that to my worst enemy. But, anyway,
that is what we did then.
One of the concerns I have is, I lived at home when I went
to college. I had a job. My father worked in a factory. We had
no student loans then. I was able to work, live at home, go to
college, and finish college with no debt.
Number two, because medical school was affordable at that
time, I graduated from medical school with no debt. I was able
to move to east Tennessee in Appalachia, an underserved area,
because I didn't have hundreds of thousands of dollars in debt,
and take less salary and serve that area.
I see young people now that leave--I get letters all the
time, and I am sure every one of us do, with hundreds of
thousands of dollars in debt. How has that happened, where a
young man like myself from a middle-class family--quite
frankly, it was very simple when I went to medical school.
I saw what the tuition was at one great private university
not too far from where I lived--it was more than what my father
made in a year--and the University of Tennessee at Memphis,
which wasn't, and I made my decision to go there. Both great
schools. A lot of people do that. That is not hard information
to get. And I thank the Lord three children of mine all have
graduated from college and they are out on their own.
But how has that happened to us? Because we cannot sustain
this current 7, 8, 10 percent or kids like myself will never be
able to go to college. Or, as Dr. Heck said, spend 25 years of
your life basically paying for a house, which is what it costs
to go now--$50,000 a year at a private university. When I went
to school, probably the State of Tennessee covered 80 percent,
90 percent. Today, it is under 50 percent in the State of
Tennessee at a public institution, and it is all being shifted
to the students.
Any comments?
Mr. Merisotis. Look, I am a walking advertisement for
student financial aid in this country. I got a Pell Grant, I
got federal student loans, I got State assistance, I got----
Mr. Roe. Are you out of debt yet?
Mr. Merisotis [continuing]. Support from my church, I got
support from the institution I went to, I worked, I did all
those things.
That was 30 years ago. The problems for today's students
have multiplied greatly because of the rising costs of higher
education. And, to your point, I think the challenge is that
students and families really are at their limit in terms of
their capacity in order to be able to deal with these issues.
I think part of the challenge comes back to the point in my
remarks, which is that we can't afford to reduce the capacity
of the system to produce graduates. It is very important to our
economic future as a country that we increase the number of
highly qualified college graduates in this country. That means
we have to make this system much more productive, particularly
for those students who haven't had the opportunity, who haven't
had the prior successes from their families, et cetera.
And I think that is an important issue for us to understand
from a State policy perspective, from an institutional policy
perspective, and from a federal policy perspective. There are
many things that I think need to be done to enhance
productivity.
Mr. Roe. Well, I served on--I was a foundation board
president at my college before I came here, and I am still on
the foundation board at East Tennessee State University--both
public schools. And we have raised money on the private side,
and we have shook everybody down that we could. And I know Mr.
Foster probably has done the same thing as president of his
college, and Dr. Manahan also. But there are limits to all of
that.
And I don't know, where does this end?
Ms. Wellman. I think we--the good thing about this
recession has been that we finally, I think, are starting to
hit the wall. For many years, in the public sector, States and
institutions were both complicit in allowing this to happen.
Nobody decided to make it happen. It happened because of other
things: budgets went down, tuitions went up. But institutions
have too long believed that more money always was necessary for
more quality.
And I think we are turning the corner. I don't think we
have turned the corner.
Mr. Roe. Well, let me just go over a couple things that Mr.
Merisotis said and we are trying to do in Tennessee. We have
the Pell Grants, we have the HOPE scholarship, which is where
we use our lottery money. And still, young people are
graduating.
But what we have done is, if you go to a community
college--I remember when I was in school, if you went to a
community college, you didn't transfer to a 4-year college, so
you had to repeat the same course again. We have stopped that.
You can go to Northeast State Community College and then
transfer that credit to the University of Tennessee.
We now are requiring our colleges to look at graduation
rates, not at the number of students that are in there, to get
their funding. I think that is an extremely positive step that
you mentioned just a moment ago.
There is a higher ed center in Kingsport, Tennessee, which
has five colleges in it. The city built it, the bricks and
mortar, and yet University of Tennessee, King College,
Northeast Community College all have classes in there, so they
don't have this incredible investment in bricks and mortar, as
Ms. Biggert mentioned. And in trying to attract students, you
can go from a freshman degree to a Ph.D. and never leave
Kingsport, Tennessee, and go to two different schools and, in
doing that, transfer credit. I think that is extremely
important.
And there are many other things--online classes, which are
less bricks-and-mortar--that we are doing. We have to do these
things or, as I said, folks like myself will never have a
chance or, number two, will never be out of debt.
I thank you all.
Chairwoman Foxx. Thank you, Dr. Roe.
Mr. Tierney?
Mr. Tierney. Thank you, Madam Chairwoman.
I was wondering if Dr. Heck could get some help from Dr.
Roe. He seems to have some loose cash hanging around.
I want to thank our witnesses. It really has been helpful,
you know, on this. This is an issue that has troubled us all
the way through the last reauthorization and forever on that.
Maintenance of effort, Ms. Wellman. You know, we have been
troubled by the fact that this is a partnership. The federal
government, the State, the families are supposed to be
partnering to try to get more people into college in an
affordable way, make it accessible and move on. States have, I
think, routinely backed away from that partnership in a huge
way over a period of time.
So we put into the last reauthorization a maintenance-of-
effort provision. We have heard tremendous feedback,
particularly from community colleges but from a lot of 4-year
colleges as well, that if we hadn't done that, tuition costs
would have gone up even more; it would have been more and more
difficult.
Should we enhance that maintenance-of-effort program? Are
you feeling it is not necessary anymore because schools are now
trying to deal with this stuff on their own?
Ms. Wellman. I don't have a good answer. I think the
problem of State budgets is so much bigger than what is
happening in higher education that the pressures on States to
cut funding are going to be with us for the next several years.
Whether the federal maintenance-of-effort requirements put some
brakes on that, I think they probably do. So I wouldn't--this
is not the time to take them off.
Whether they can be strengthened or rewritten, I honestly
don't know. I don't think the thing that is causing the cuts
from States is related to federal funding. It is related to
what is happening to State budgets.
Mr. Tierney. Yeah. Well, thank you for that.
Endowments to a lot of well-off schools, well-off
institutions on that. Senator Grassley and I started on this
path last time. We got a lot of consternation from some. But
many of those schools don't even pay 5 percent of their income
back into education-related efforts on that. Now, they still
maintain their tax-exempt status.
Is that an area where we ought to be expecting more, we
ought to be expecting those schools that have billions of
dollars in endowments to pay at least the minimum amount that
other charities have to pay in order to maintain their the tax-
exempt status and put that back into education efforts, maybe
even in a way that helps public 4-year and 2-year institutions
on that basis?
Anybody that wants to reflect on that?
Ms. Wellman. The wealthiest institutions are already
spending a lot of money from their endowments. I guess I am
sympathetic to your question. My question is why they are
continuing to raise tuitions at the same time that they have
that level of revenue.
Requiring an even higher payout in this environment in
those institutions would be like putting kerosene on a fire.
They are already spending a lot of money.
Mr. Tierney. So an institution that has almost $30 billion
in an endowment that spends 4.3 percent or less of their income
from that----
Ms. Wellman. And raises tuition every year.
Mr. Tierney. Yeah--that would be a problem for you?
Ms. Wellman. I think the issue of the public purpose is a
really important one.
Mr. Tierney. Thank you.
We see that one of the drivers--I mean, there are a number
of drivers of cost increases. I was listening to Dr. Roe on
that. And I also was a State college product and was able to
afford to go and get through on that. But the cost of safety
now--we expect campuses to be little communities. They are
responsible for the safety of their students. They have huge
energy costs. Technology is far more expensive than it used to
be. The cost of construction, you know.
And the benefits, as you mentioned, all of you, the costs
of paying for your staff, whether it is administration or
faculty, the cost of the benefits. So a lot of schools, I have
noted, have now switched to adjunct faculty.
Ms. Wellman. Yes.
Mr. Tierney. I am not sure that is a great thing for the
student or the faculty member, but it essentially looks to me
as a cost-shift. So now the school might not have to pay for
the benefits of that person but the individual does. So they
are getting paid less, have higher out-of-pocket expenses for
benefits of that nature, or they shift it somehow onto a health
system within their State on that basis.
That doesn't seem, to me, the wisest way to proceed. Is
there another alternative here?
Mr. Foster?
Mr. Foster. Boy, you ask the hardest questions, and I am
glad I ducked the first two.
I would tell you that I think there is a temptation to do
what you talked about, and I think some schools have gone down
that road. And I think most of those that have have turned
around and gone back the other direction, because it comes down
to quality and quality of people. And I think we all are
scrambling, trying to find other places to contain costs.
Your--I was nodding because it is; technology we used to
think would be a cost. It is a cost-driver because this
generation of students just demands way more robust technology
than you and I even consider feasible. And so it really has us
searching everywhere possible to try and reduce those costs and
see if we can't simplify, you know, what we do and what is
extraneous to the core mission of what we do.
And so our faculty, for example, teach a four-four teaching
load, four courses per semester, which is double that of most
R-1 institutions. You know, there are just those sorts of
metrics that, at some point, you know--you are ready to be a
college president, it sounds like to me. So we will switch
places and----
Mr. Tierney. Sounds attractive, some days around here.
And, lastly, you know, on that transparency issue that you
talked about, Mr. Foster, I think that you are probably unusual
if you had all of the transparency provisions that the Higher
Education Opportunity Act asks for. And I commend you if you
did.
You know, the idea of having institutions with the largest
percentage increases in tuition prices submit an explanation
for that, did you have that on before the act or is that
something you added on?
Mr. Foster. We didn't hit those percentages, so we didn't
have to deal with that particular issue.
Mr. Tierney. Okay. And you have used innovative strategies
to rein in price increases and use those incentives to keep
costs low, you share that information with other institutions?
Mr. Foster. We do. I do a monthly email to all of the
parents of our students and try to two things: one, communicate
those sorts of issues; and, secondly, as I tell them, the more
engaged they are in their students' education--and if you are
like me, you ask your son--I have four sons--``What happened
today?'' I get no answer. If I have a little bit of
information, I get a whole lot more back.
And so we try and give them, you know, ``This is what is
going on on campus,'' so then they can engage with their
student. And we tell them, ``Midterms are coming. You might
want to inquire if, in fact, they are studying for midterms.''
And so those sorts of things really, we think, help that
dynamic.
Mr. Tierney. And just quickly, what kind of feedback have
you had with your institution's online net price calculator?
Mr. Foster. You know, the feedback I have gotten--I go out
and help move students in. And so, this year was the first year
that I had probably a half dozen parents say, ``We were
considering this institution''--generally a private and in a
couple instances a public--``and we looked at your programs and
your price, and we chose here because you are this much less.''
And so it was the first time I had someone just out of the blue
say, that was a consideration and that is why we are here.
And so I assume they were doing that using our net price
calculator as well as the other institutions they were
comparing us to.
Mr. Tierney. Great. Thank you.
Thank you, Madam Chairman.
Chairwoman Foxx. Thank you, Mr. Tierney.
Mr. Thompson?
Mr. Thompson. Thank you, Chairwoman.
Thank you to the panelists for I think a very good hearing
on a very important topic, in terms of access to affordable
education.
We have spent a lot of time in committee talking about the
burdens of federal regulations, reporting requirements in all
forms of education.
This question is specifically for Dr. Manahan and Mr.
Foster. In your experience with your universities, you know, do
you have a sense about how much time you spend on federal
regulatory and reporting compliance? And do you have some
suggestions for us about how regulations reporting could be
eliminated without jeopardizing integrity of the federal
financial aid system programs?
Mr. Manahan. I would be happy to begin with that good
question.
We have calculated on our campus that--and we are a small
campus--we spend about $460,000 a year on salary and benefits
to address regulatory issues. And then that is not counting
equipment and other things we need to provide them. So what
that equals for us is, we spend about $300-plus a year per
student to care for regulatory matters.
We certainly believe there are a number of regulations that
are very helpful and protective. But those that have less
value, perhaps, and fewer changes to continue adapting to, that
is a way to reduce some of that cost. Because that is passed on
in the cost of the institution.
But I would grant you that there are regulations that are
very helpful, as well, to the student as a consumer and other
such things. But overreaching regulations make it challenging
to carry on funding.
Mr. Foster. I tried to give you some sense of just a couple
of areas. We haven't quantified it, and now I am glad I haven't
because I would be just absolutely under my bed lamenting how
much we are spending on regulatory compliance.
I would say, though, that, you know, the federal collection
of data we use intensely to compare ourselves to other
institutions. And so, you know, we track things that the Delta
Project puts out or we actually go mine that information
ourselves. Because you just never know how well you are
performing or how poor you are performing without getting it in
context. And so I would say the collection area is something
that is actually very beneficial, I think, for all of us,
because you use common definitions, everybody knows exactly
what that is.
It is below that radar screen in terms of, you know,
increasing--and I appreciate the difficulties with proprietary
schools and whatever other issues you are dealing with, but it
is pulling us into that vortex that is really starting to tilt
and have us spend hours. And we can get you more discrete
suggestions in terms of areas.
If nothing else, if we would just stopped changing the
definitions in federal financial aid, that would be great.
Because then we would know and we could tell students year to
year exactly what those criteria are.
Mr. Merisotis. I just wanted to quickly commend to you the
brand-new report from the Federal Advisory Committee on Student
Financial Assistance that looks at the 15 major areas of Higher
Education Act regulations and ways in which burden and overlap
and other things can be reduced. And I think that may be
helpful in terms of the decision-making on the committee.
Mr. Thompson. What role, from your perspective, the panel's
perspective, does the integration of online learning, virtual
campus, have in increasing access and, frankly, potentially
decreasing costs?
Mr. Foster. Huge. Like I said, we represent or cover an
area that is fairly rural. More jackrabbits than people in
large portions of western Colorado. And so, from an access
perspective, for them to be able to take classes online, it
also, equally, is a matter of convenience for our students. I
think the overwhelming majority on most campuses' online
activity are students who are actually taking classes
physically on campus, and they use it to balance their schedule
and time management, whether they are working or doing other
things.
And then there is the obvious avoidance--it is more
intense. You know, the theory was, you could scale it and have,
you know, hundreds of students in a classroom, and the
experience is not that way. But it certainly avoids bricks-and-
mortar, and so it is extending the life of our classroom
buildings. And so we can grow beyond--we anticipate about 20
percent of our credit hours will be delivered online because of
those sorts of things, and so there is a 20 percent bump in
terms of how many classrooms we won't need because of that
online activity.
Mr. Merisotis. I mentioned Carnegie Mellon's Open Learning
Initiative, which is delivering the same outcomes in half the
time for students.
Another great example is the Western Governors University,
which is an online, competency-based learning model, which is
delivering programs in only four key areas: teacher education,
business, IT, and nursing. And they are having a very high
success rate with their competency-based model, but it is using
online delivery. And we think there is a lot of potential for
those competency-based models using technologies to
proliferate.
Mr. Manahan. We would agree with that. We, in fact, in this
3-year degree option, the 3 years allows the 2 summers in
between to be taken online by courses provided from our campus,
and those are tuition-free to the students. It allows the
student to go--perhaps return to their home for summer
employment, whatever they need to do. If they need to fulfill
some degree component, traveling to another country, it still
allows that. And we have other uses of online, as well, in our
graduate programs.
Mr. Thompson. Okay.
Thank you, Chairwoman.
Chairwoman Foxx. Thank you, Mr. Thompson.
Ms. Davis?
Mrs. Davis. Thank you, Madam Chair.
Thank you to all of you for being here.
I want to switch the scale here for a second and just talk
about California, if I may. And I am not expecting that you are
experts, necessarily, in that system. But in terms of what you
know and to apply, as you probably know, as well, the
Governor's 2011-2012 budget is below 1998 funding levels with
75,000 fewer students than the 237,000 students that are
enrolled today. So, clearly, a different scale than what we are
talking about. And, of course, thousands of people have been
laid off, et cetera.
But I am wondering, you know, at what point does the
streamlining and the savings hinder student learning? How far
can a large system like that really afford to go to afford
graduates both an opportunity to graduate but to graduate with
something substantive to contribute?
Ms. Wellman. California--I worked there for many years,
including in the legislature in the Ways and Means Committee. I
know more about it than I know what to do with. But----
Mrs. Davis. Well, that is good.
Ms. Wellman [continuing]. It is a tough--it is a tough one.
They are already--they are cutting access. They are probably
cutting quality. You can't cost-manage your way out of the
problem California has.
Having said that, California has weakened its policy
capacity in the last decade so that they no longer have what
they once had, which was a way to look at integrated,
comprehensive solutions. So they are all on their own, sort of
flailing.
I think there has to be a return to policy capacity in that
State to once again look comprehensively across those
institutions. As bad as it is, California has still got a lot
of money in higher education, but it is not being invested very
well.
Mrs. Davis. Uh-huh. And revenues, as we know, are really
coming from students at this point.
Ms. Wellman. Right.
Mrs. Davis. I fondly tell groups of people in my district
of San Diego that I do recall writing checks for $89 a semester
to Berkeley. I don't want to tell you when that was. But it
sent a different message to me, certainly, that the State
thought I was actually pretty important, because they were
making an investment. And I don't think students feel that way
today.
I wonder if you could talk just for a second about the
transparency issue. Because I understand what you are saying,
that people figure out how they want to make comparisons. They
know if they have some assistance, some scholarship money,
whether it is cheaper to go to one school than another and
still get quality. But are there other things that you think
families and students really should know?
I heard a statistic this morning: 85 percent of graduating
seniors this year will be living at home. That is pretty
striking.
What is it that you think is fair for people to know as
they are making those comparisons? And does the federal
government have a role in that? Perhaps not by fiat or by
regulation, but how is it that we can assist and craft for
parents and students better information? Or, really, are we
there? Is there nothing else, really, that needs to be done?
Mr. Foster. Well, I think there is a lot that needs to be
done. And this goes to, I think, Congressman Roe's question,
and I think it builds off of Mrs. Biggert's question, and that
was, where does the individual have some responsibility to go
seek that information out?
Now, that falls apart with first-generation students
because they don't know what questions to ask. And so, for us,
it is really trying to figure out what they think is important.
And it is always surprising to me, the questions you get when
you interact with parents and students. And sometimes it is
safety, sometimes it is cost, sometimes it is whether the
dorms--it is just a myriad of things.
And so, like I said, I think most of the institutions I am
familiar with are trying to push that information out and make
it as available as possible. We do a lot with high schools,
with first-generation students to try and educate them and help
them understand. Because the barrier for them is, they have a
desire to go to college; it is they have a complete--they tend
to shut off, and they just say, ``It is too expensive; I will
never be able to realize that.'' And so it is really the
reverse, where we are trying to pull them in and say, there are
a lot of opportunities for you as a first-generation student.
But, you know, I don't think there is a limit, in terms
of--you know, any question those prospective students and
families want is fair game. I guess I go back to, kind of,
Margaret Thatcher, which is the market is just more powerful
and more reliable and a more liberating force than government
can ever be. And so the pressure we get from those folks is 10
times what you can do in terms of a policy directive.
Mr. Merisotis. Three things I think a student or family
should know about an institution. One is, are students
completing at that institution, particularly students who look
like me? The second is, what are they learning, and how can we
tell? And the third is, are they getting jobs?
Those three areas of outcomes I think represent the most
important things that all students and families should have
access to as a result of better data systems.
Mr. Manahan. I would just say this. To the degree there is
a lack of transparency, it diminishes the value of the
education, and people begin to sense that deeply. And I think
the more transparent we are up front with real cost adds to a
better value of the education and trustworthiness in higher
education as a whole. I think every campus bears responsibility
to make its own contribution to set a level of transparency
that helps people make a decision.
We noticed this remarkably on our campus. As the value of
homes decreased and people had less access to home equity, they
became quite well schooled in asking financial questions,
commitments on a number of fronts. And we do get people coming
to our campus and saying, how does this cost compare to that
cost and what am I getting into? So it is important.
Chairwoman Foxx. Thank you, Ms. Davis.
I want to again thank the panel very, very much for taking
time to testify before the subcommittee today.
And I want to thank all the members of the committee who
came and asked such great questions. One of the wonderful
things about Congress is the diversity that we have, and that
diversity causes us to ask lots of different kinds of questions
and get many differing perspectives.
Mr. Hinojosa, do you have some closing remarks you would
like to make?
Mr. Hinojosa. Thank you, Madam Chair.
I thought it was very interesting and informative. I like
some of the new ideas that were discussed.
I can't help but think of some of the--I guess comparable
to Dr. Manahan's 3-year program--the Western Governors
University and how they are doing it with about half of the
cost and without having all the campuses and all the expensive
athletic programs that we have in many of our big flagship
schools, where we pay coaches upwards of $4 million to be a
football coach, or other expenses that are never discussed as
part of the cost of running a university.
But I think that what I like is the fact that, more and
more, we are accepting that online courses are going to be more
and more acceptable by the employers, particularly when they
are producing a graduate that is capable of coming into a
business or to a program and take it to a new higher level in
effectiveness and profits and so forth. So I think that we are
making progress in this committee in terms of looking at new
success models.
And I want to thank the witnesses for sharing their
insights with us this morning. And I look forward to working
with all of you and my colleagues on this committee to make
college more affordable and to achieve our Nation's college-
completion goals.
Thank you very much.
Chairwoman Foxx. Thank you, Mr. Hinojosa.
I want to repeat what Dr. Roe said earlier, and I think
sometimes we forget to talk about it. I think we have had the
best higher education in the world in this country. I think
like many things that are being threatened, I think the quality
of higher education in this country is being threatened these
days, and not just because of the lack of money. In fact, I
think the lack of money is probably the least reason that
higher education is being threatened.
And I agree with what someone else has said--I think, Ms.
Wellman, it was you--that perhaps the squeezing budgets have
been a benefit, not a negative, because it is forcing people to
look at what they are doing.
I think that one of the big problems we have had in higher
education and what I have seen happen in higher education in my
lifetime is having institutions of higher education decide what
it is they want to do. I think that Mr. Foster's comment about
focusing on the students as customers is very important. But
are the institutions focusing on what learning the students are
getting, Mr. Merisotis, or seat time? Or are they simply
providing income to maintain the institution?
So I think there is much that we need higher education to
be looking at. And I agree with Ms. Wellman; I think that
having this money crunch may be helpful. And I go back to a
comment Mr. Foster said, when you had your committee split
three and three, and one side of the committee said, ``Well, if
money is an issue, then''--well, money is always an issue.
However, in higher education, people haven't thought that.
And I remember when I was a community college president
that the president of our system came to the presidents one day
and said, ``The days are gone, ladies and gentlemen, when I
could go to the legislature and say, 'We are doing the Lord's
work; therefore, you should be giving us lots of money.''' And
I thought that was going to happen a long time ago. Because, I
think, we had a booming economy, that got sort of waxed over.
But I also want to say, in conjunction with what Dr. Roe
said, it is still possible to graduate from very fine
institutions in this country without a dime of debt. It is up
to the student and up to the parents to shop. And I think
sometimes you sell parents and students short--I think our
whole society does--in terms of their ability to make those
decisions. We go out and buy cars every day. We go to the
grocery store. We are very capable of going out and shopping.
Transparency, though, I think is going to be one of the
biggest issues. And I think that is something that has to be
looked at.
I want to thank all of you for emphasizing both
affordability and quality. I do think that we can have both
high quality and affordability, I should say. And I think that
is an extremely important concept for us to keep in mind. We do
want, again, I think, too, as Tennessee has done, to
concentrate on funding results, not necessarily enrollment.
So there are some things that have to be done. I think you
all have brought up some really, really important issues to us.
And I am extremely pleased with the way the panel has gone
today, with the questions that have been raised and the issues
that have been raised.
And I want to say, again, on the issue of parental
involvement, we have known for 50, 60, 70 years that what makes
a good elementary and secondary school is a good principal,
good teachers, and parental involvement. That is not different
from higher education. It should be exactly the same thing. You
will get good results if you get the customers involved with
checking out the quality of the goods that they are receiving.
So I want to thank you all for being here and again thank
the panel.
And there being no further business, the subcommittee
stands adjourned.
[Whereupon, at 11:56 a.m., the subcommittee was adjourned.]