[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                     KEEPING COLLEGE WITHIN REACH:
                 EXPLORING STATE EFFORTS TO CURB COSTS

=======================================================================

                                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

                             SECOND SESSION

                               __________

             HEARING HELD IN WASHINGTON, DC, JULY 18, 2012

                               __________

                           Serial No. 112-65

                               __________

  Printed for the use of the Committee on Education and the Workforce


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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               Robert E. Andrews, New Jersey
Todd Russell Platts, Pennsylvania    Robert C. ``Bobby'' Scott, 
Joe Wilson, South Carolina               Virginia
Virginia Foxx, North Carolina        Lynn C. Woolsey, California
Bob Goodlatte, Virginia              Ruben Hinojosa, Texas
Duncan Hunter, California            Carolyn McCarthy, New York
David P. Roe, Tennessee              John F. Tierney, Massachusetts
Glenn Thompson, Pennsylvania         Dennis J. Kucinich, Ohio
Tim Walberg, Michigan                Rush D. Holt, New Jersey
Scott DesJarlais, Tennessee          Susan A. Davis, California
Richard L. Hanna, New York           Raul M. Grijalva, Arizona
Todd Rokita, Indiana                 Timothy H. Bishop, New York
Larry Bucshon, Indiana               David Loebsack, Iowa
Trey Gowdy, South Carolina           Mazie K. Hirono, Hawaii
Lou Barletta, Pennsylvania           Jason Altmire, Pennsylvania
Kristi L. Noem, South Dakota         Marcia L. Fudge, Ohio
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 July 18, 2012....................................     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:
    Jones, Stan, president, Complete College America.............    26
        Prepared statement of....................................    28
    Lubbers, Teresa, commissioner, Indiana Commission for Higher 
      Education..................................................    16
        Prepared statement of....................................    18
    May, Dr. Joe D., president, Louisiana Community and Technical 
      College System.............................................    33
        Prepared statement of....................................    34
    Pattison, Scott D., executive director, National Association 
      of State Budget Officers (NASBO)...........................     9
        Prepared statement of....................................    10

Additional Submissions:
    Barletta, Hon. Lou, a Representative in Congress from the 
      State of Pennsylvania, questions submitted for the record:
        To Ms. Lubbers...........................................    58
        To Dr. May...............................................    62
        To Mr. Pattison..........................................    66
    Mrs. Foxx:
        Prepared Statement of John Ebersole, LPD, president, 
          Excelsior College......................................     6
        Questions submitted for the record:
            To Ms. Lubbers.......................................    58
            To Dr. May...........................................    62
            To Mr. Pattison......................................    66
    Kline, Hon. John, Chairman, Committee on Education and the 
      Workforce, questions submitted for the record:
        To Ms. Lubbers...........................................    58
        To Mr. Pattison..........................................    66
    Ms. Lubbers' response to questions submitted for the record..    59
    Dr. May's response to questions submitted for the record.....    63
    Mr. Pattison's response to questions submitted for the record    67


  KEEPING COLLEGE WITHIN REACH: EXPLORING STATE EFFORTS TO CURB COSTS

                              ----------                              


                        Wednesday, July 18, 2012

                     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 10:05 a.m. in 
Room 2175, Rayburn, Hon. Virginia Foxx [chairwoman of the 
subcommittee] presiding.
    Present: Representatives Foxx, Biggert, Roe, Thompson, 
Bucshon, Heck, Hinojosa, Bishop, Miller, and Altmire.
    Staff Present: Katherine Bathgate, Deputy Press Secretary; 
James Bergeron, Director of Education and Human Services 
Policy; Adam Bennot, Press Assistant; Casey Buboltz, Coalitions 
and Member Services Coordinator; Heather Couri, Deputy Director 
of Education and Human Services Policy; Cristin Datch, 
Professional Staff Member; Amy Raaf Jones, Education Policy/
Counsel and Senior Advisor; Barrett Karr, Staff Director; Brian 
Melnyk, Legislative Assistant; Krisann Pearce, General Counsel; 
Dan Shorts, Legislative Assistant; Alex Sollberger, 
Communications Director; Linda Stevens, Chief Clerk/Assistant 
to the General Counsel; Alissa Strawcutter, Deputy Clerk; 
Tylease Alli, Minority Clerk; Kelly Broughan, Minority Staff 
Assistant; Daniel Brown, Minority Policy Associate; Jody 
Calemine, Minority Staff Director; Ruth Friedman, Minority 
Director of Education Policy; Megan O'Reilly, Minority General 
Counsel; and Julie Peller, Minority Deputy Staff Director.
    Chairwoman Foxx. A quorum being present, the subcommittee 
will come to order.
    Good morning and welcome to our subcommittee hearing. We 
are fortunate to have a distinguished panel of higher education 
experts here today, and I would like to thank these witnesses 
for joining us.
    In recent months, the issue of rising college costs has 
shifted to the forefront of our national discourse, and rightly 
so, as millions of young people struggle to manage school debt 
and to find job opportunities in the lagging economy. Annual 
tuition and fees at public universities have increased 72 
percent since 2001, and the cost of private institutions and 2-
year degree programs have similarly increased. Meanwhile, the 
student debt load recently surpassed $1 trillion, exceeding 
total outstanding credit card debt for the first time in 
history.
    Clearly there is a problem that needs to be addressed, but 
it cannot be solved solely at the federal level with Washington 
bureaucrats acting as master puppeteers. That has been tried 
over the last decade, and it hasn't worked. Federal support for 
higher education increased 155 percent over the last 10 years, 
yet tuition has continued to rise. In these fiscally 
challenging times, if government subsidies aren't producing 
more affordable education in the current system, we cannot just 
keep writing bigger checks. Instead, we need to look to States 
and postsecondary institutions for creative solutions to the 
college cost conundrum.
    In a previous hearing, this subcommittee explored ways some 
colleges and universities are working to streamline costs and 
reduce the burden for students. Grace College and Seminary 
President Dr. Ronald Manahan described the value of accelerated 
degree programs that allow students to graduate in less time. 
Colorado Mesa University President Tim Foster explained how his 
school's innovative work study program has been beneficial to 
students and the school's bottom line.
    Today, we will learn about State-led initiatives to tackle 
the college cost problem. As our economy continues to falter, 
it is no secret many States are hard-pressed to match the 
levels of support they have appropriated to higher education in 
previous years. Despite these challenging circumstances, some 
State officials are developing inventive programs and policies 
that provide students more affordable options on the path to a 
postsecondary degree.
    For example, Indiana and Pennsylvania have successfully 
implemented ``pay for performance'' funding structures in which 
States set aside a certain percentage of funds for higher 
education programs with the best retention, completion, and 
placement rates. As one of our witnesses will discuss today, 
the benefit of ``pay for performance'' is two-fold: Not only do 
these structures offer colleges a financial incentive to raise 
the bar, they also provide another layer of accountability to 
ensure limited taxpayer resources are being used wisely.
    Recognizing that not all learning occurs in a traditional 
classroom setting, colleges and universities in Minnesota and 
Vermont now offer assessments for prior learning. These tests 
determine whether the knowledge a student has obtained through 
previous education and work experience merits college credit. 
And when these tests are implemented for each student, they 
help eliminate instructional redundancies and spare students 
the cost of courses that would attempt to teach them skills 
they already possess. Other States, such as Ohio, require all 
public universities to offer accelerated degree programs that 
provide students the option to earn their degrees in less time 
than the traditional 4 years, thereby saving money.
    To help lower the tuition bill, some students opt to take 
courses at a less expensive community college and then complete 
their degree program at a public 4-year institution. Officials 
in some States, including Louisiana, Florida, and my home State 
of North Carolina, have acknowledged the fiscal practicality of 
this approach in implementing comprehensive articulation 
agreements to make it easier for students to transfer credits 
to another public institution within the same State. We are 
fortunate today to have a witness from the Louisiana Community 
and Technical College System who will discuss how students are 
benefiting from these agreements.
    Before I yield to my colleague, Ruben Hinojosa, I would 
like to make one thing clear: I know all of us have the best 
intentions when it comes to helping students afford a college 
education, and we all agree debt should not be a foregone 
conclusion in higher education. However, we must not forget 
heavy-handed federal regulations often yield results 
contradictory to their aim, weighing down States with another 
layer of burdensome red tape. Instead of leveraging new 
mandates on States and institutions, we should encourage 
innovation by continuing to highlight the successful efforts 
being made at the State and local level.
    I look forward to a productive discussion with my 
colleagues and our witnesses on ways States are working to keep 
college within reach for more students.
    I now recognize the ranking member, Mr. 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 our subcommittee hearing. We are 
fortunate to have a distinguished panel of higher education experts 
here today, and I would like to thank these witnesses for joining us.
    In recent months, the issue of rising college costs has shifted to 
the forefront of our national discourse--and rightly so, as millions of 
young people struggle to manage school debt and find job opportunities 
in the lagging economy. Annual tuition and fees at public universities 
have increased 72 percent since 2001, and the cost of private 
institutions and two-year degree programs have similarly increased. 
Meanwhile, the student debt load recently surpassed $1 trillion--
exceeding total outstanding credit card debt--for the first time in 
history.
    Clearly there is a problem that needs to be addressed, but it 
cannot be solved solely at the federal level with Washington 
bureaucrats acting as master puppeteers. That's been tried over the 
last decade, and it hasn't worked. Federal support for higher education 
increased 155 percent over the last ten years, yet tuition has 
continued to rise. In these fiscally challenging times, if government 
subsidies aren't producing more affordable education in the current 
system, we cannot just keep writing bigger checks. Instead, we need to 
look to states and postsecondary institutions for creative solutions to 
the college cost conundrum.
    In a previous hearing, this subcommittee explored ways some 
colleges and universities are working to streamline costs and reduce 
the burden for students. Grace College and Seminary President Dr. 
Ronald Manahan described the value of accelerated degree programs that 
allow students to graduate in less time, and Colorado Mesa University 
President Tim Foster explained how his school's innovative work study 
program has been beneficial to students and the school's bottom line.
    Today, we will learn about state-led initiatives to tackle the 
college cost problem. As our economy continues to falter, it's no 
secret many states are hard-pressed to match the levels of support 
they've invested in higher education in previous years. Despite these 
challenging circumstances, some state officials are developing 
inventive programs and policies that provide students more affordable 
options on the path to a postsecondary degree.
    For example, Indiana and Pennsylvania have successfully implemented 
``pay for performance'' funding structures, in which states set aside a 
certain percentage of funds for higher education programs with the best 
retention, completion, and placement rates. As one of our witnesses 
will discuss today, the benefit of ``pay for performance'' is two-fold: 
Not only do these structures offer colleges a financial incentive to 
raise the bar, they also provide another layer of accountability to 
ensure limited taxpayer resources are being used wisely.
    Recognizing not all learning occurs in a traditional classroom 
setting, colleges and universities in Minnesota and Vermont now offer 
prior learning assessments. These tests determine whether the knowledge 
a student has obtained through previous education or work experience 
merits college credit. And when these tests are implemented for each 
student, they help eliminate instructional redundancies and spare 
students the cost of courses that would attempt to teach them skills 
they already possess. Other states, such as Ohio, require all public 
universities to offer accelerated degree programs that provide students 
the option to earn their degree in less time, for less money.
    To help lower the tuition bill, some students opt to take courses 
at a less expensive community college and then complete their degree 
program at a public four-year institution. Officials in some states, 
including Louisiana, Florida, and my home state of North Carolina, have 
acknowledged the fiscal practicality of this approach and implemented 
comprehensive articulation agreements to make it easier for students to 
transfer credits to another public institution within the same state. 
We are fortunate today to have a witness from the Louisiana Community 
and Technical College System who will discuss how students are 
benefitting from these agreements.
    Before I yield to my colleague, Ruben Hinojosa, I'd like to make 
one thing clear. I know all of us have the best of intentions when it 
comes to helping students afford a college education. And we all agree 
debt should not be a foregone conclusion in higher education. However, 
we must not forget heavy-handed federal regulations often yield results 
contradictory to their aim, weighing down states with another layer of 
burdensome red tape. Instead of leveraging new mandates on states and 
institutions, we should encourage innovation by continuing to highlight 
the successful efforts being made at the state and local level.
    I look forward to a productive discussion with my colleagues and 
our witnesses on ways states are working to keep college within reach 
for more students. I now recognize the ranking member, Mr. Hinojosa, 
for his opening remarks.
                                 ______
                                 
    Mr. Hinojosa. Thank you, Chairwoman Foxx.
    I would like to thank our distinguished witnesses for 
joining us today to discuss State-led efforts to curb college 
costs, as the chairwoman made in her opening remarks. I am also 
eager to learn more about the strategies that a number of 
States are taking to maintain affordability, accessibility, 
diversity, and student success in higher education.
    As ranking member of this subcommittee, I am deeply 
concerned that college costs continue to rise at unprecedented 
levels and of the ever-increasing amount of debt that students 
are being burdened with. According to the Consumer Financial 
Protection Bureau, total outstanding student loan debt 
surpassed $1 trillion late last year.
    As costs to educate have increased, students have been 
forced to shoulder the additional cost burden. In 2012, student 
tuition made up 43 percent of higher education spending. 
According to the State Higher Education Executive Officers 
Association, that is a fact. By contrast, in 1986, student 
tuition comprised only 23 percent of higher education spending. 
To make matters worse, State funding per full-time equivalent 
student declined 23 percent in inflation-adjusted dollars over 
the last 10 years.
    In the past several years, Democrats have taken bold steps 
to address rising costs through increased transparency and 
investments in federal aid.
    With the passage of the Student Aid and Fiscal 
Responsibility Act, known as SAFRA, in the year 2010, the 
Democratic-led Congress provided $36 billion in additional Pell 
Grant funding, as well as $2.55 billion in targeted investments 
for Historically Black Colleges and Universities, better known 
as HBCUs, as well as for Hispanic-Serving Institutions, known 
as HSIs, Tribal Colleges and Universities, Predominantly Black 
Institutions, Asian American and Native American Pacific 
Islander-Serving Institutions to bolster STEM education.
    It is important to note that HBCUs and minority-serving 
institutions like I enumerated are some of the most affordable 
colleges and universities in our nation's higher education 
system.
    Most recently, the passage of the Moving Ahead For Progress 
in 21st Century Act kept interest rates on need-based student 
loans from doubling in July of this year, saving 7.4 million 
students an average of $1,000 in borrowing costs over the life 
of their loan. I would also like to underscore that the Obama 
administration has redoubled efforts to increase transparency 
of college costs through additional institutional reporting 
requirements and new tools for consumers to better understand 
the costs and financial aid.
    Clearly, federal investments in higher education are 
critical to student success. This is especially true for low-
income, for first-generation college and minority students. At 
the same time, States and colleges and universities must do 
their part to keep college affordable, promote on-time 
graduation, and create and strengthen articulation agreements 
that help students transfer credit and earn their degrees.
    While this is a tall order, I am confident that State 
leaders and institutions, as are being represented today by our 
panelists, can do more to rein in college costs without 
sacrificing quality, without sacrificing equity, and diversity.
    In closing, I want to say that if students can afford the 
cost of their college education they are more likely to lead 
healthy and prosperous lives and use their degrees to 
contribute to our nation's workforce and economy.
    I look forward to hearing from today's witnesses on how 
States and institutions can work together and help all students 
afford the cost of a high-quality postsecondary education, and 
I thank you.
    With that, I yield back.
    [The statement of Mr. Hinojosa follows:]

Prepared Statement of Hon. Ruben Hinojosa, Ranking Member, Subcommittee 
               on Higher Education and Workforce Training

    Thank you, Chairwoman Foxx.
    I would like to thank our distinguished witnesses for joining us 
today to discuss state-led efforts to curb college costs. I am eager to 
learn more about the strategies that a number of states are leading to 
maintain affordability, accessibility, diversity and student success in 
higher education.
    As Ranking Member of this Subcommittee, I am deeply concerned that 
college costs continue to rise at unprecedented levels and of the ever-
increasing amount of debt that students are being burdened with. 
According to the Consumer Financial Protection Bureau (CFPB), total 
outstanding student loan debt surpassed $1 trillion late last year.
    As costs to educate have increased, students have been forced to 
shoulder the additional cost burden. In 2012, student tuition made up 
43.3% of higher education spending, according to the State Higher 
Education Executive Officers Association (SHEEO). By contrast, in 1986, 
student tuition comprised 23% of higher spending. To make matters 
worse, state funding per full time equivalent student declined by 23% 
in inflation adjusted dollars over the last decade.
    In the past several years, Democrats have taken bold steps to 
address rising costs through increased transparency and investments in 
federal aid.
    With the passage of the Student Aid and Fiscal Responsibility Act 
(SAFRA) in 2010, the Democratic led Congress provided $36 billion in 
additional Pell grant funding and $2.55 billion in targeted investments 
for Historically Black Colleges and Universities (HBCUs), Hispanic-
Serving Institutions (HSIs), Tribal Colleges and Universities (TCUs), 
Predominantly Black Institutions (PBIs) and the Asian American and 
Native American Pacific Islander-Serving Institutions to bolster STEM 
education.
    It's important to note that HBCUs and Minority-Serving institutions 
are some of the most affordable colleges and universities in our 
nation's higher education system.
    Most recently, the passage of the ``Moving Ahead for Progress in 
21st Century Act'' kept interest rates on need-based student loans from 
doubling in July, saving 7.4 million students $1,000 in borrowing costs 
over the life of their loan. I would also like to underscore that the 
Obama Administration has redoubled efforts to increase transparency of 
college costs through additional institutional reporting requirements 
and new tools for consumers to better understand costs and financial 
aid. Clearly, federal investments in higher education are critical to 
student success; this is especially true for low-income, first-
generation college, and minority students. At the same time, states and 
colleges and universities must do their part to keep college 
affordable, promote on-time graduation, and create and strengthen 
articulation agreements that help students transfer credit and earn 
their degrees.
    While this is a tall order, I am confident that state leaders and 
institutions can do more to rein in college costs, without sacrificing 
quality, equity, and diversity.
    If students can afford the cost of their college education, they 
are more likely to lead healthy and prosperous lives and use their 
degrees to contribute to our nation's workforce and economy.
    In closing, I look forward to hearing from today's witnesses on how 
states and institutions can help all students afford the cost of a high 
quality postsecondary education.
    Thank You.
                                 ______
                                 
    Chairwoman Foxx. Thank you, 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. Without objection, the hearing 
record will remain open for 14 days to allow statements, 
questions for the record, and other extraneous materials 
referenced during the hearing to be submitted in the official 
hearing record.
    [An additional submission of Mrs. Foxx follows:]

                                         Excelsior College,
                                                     July 24, 2012.
Hon. Virginia Foxx, Chairwoman,
House Higher Education and Workforce Training Subcommittee, 1230 LHOB, 
        Washington, DC 20515.
    Dear Chairwoman Foxx: Per our conversation, I am grateful for your 
accommodation to include my supplemental testimony as part of the 
official record for your recent hearing titled ``Keeping College Within 
Reach: Exploring State Efforts to Curb Costs'' which was held on 
Wednesday, July 18, 2012.
    Excelsior College is most grateful for your commitment to keeping 
college costs low and for your great work on behalf of higher 
education.
            Sincerely,
                                          John F. Ebersole,
                                                         President.

 Prepared Statement of John Ebersole, LPD, President, Excelsior College

    Chairwoman Foxx and Members of the Committee, I am grateful for the 
inclusion of my testimony as part of the official record on the hearing 
titled ``Keeping College Within Reach: Exploring State Efforts to Curb 
Costs.''
    In addition to the ideas and concepts presented to your committee 
during its recent hearings on college affordability, I would like to 
add the following:
    1. Improve the credit transfer process. It is inefficient and 
costly to require students to repeat course work simply because they 
satisfied a particular degree requirement at a different institution. 
In academic year 2010-2011, Excelsior College (a regionally accredited, 
non-profit, adult-serving institution created by the Regents of the 
State of New York in 1971) enrolled about 12,500 new students. On 
average, these adult students presented five transcripts for review and 
evaluation. From these, Excelsior accepted over 600,000 credits toward 
Excelsior's established degree requirements as approved by the State of 
New York. At our tuition rate of $355 per credit, Excelsior saved these 
students, their families, employers and the American taxpayer over $200 
million, in one year alone.
    2. Accept credit for non-collegiate instruction that has been 
reviewed by the American Council on Education, such as military and 
corporate training.
    3. Accept credit for prior learning that has been assessed by such 
credible entities as the Council on Adult and Experiential Learning 
(CAEL), for work and life experience.
    4. Accept credit earned through such psychometrically valid, 
nationally normed, assessments as those of The College Board (CLEP), 
the Educational Testing Service (DSST), and Excelsior College 
(Excelsior College Examinations and UExcel Exams).
    5. Offer instruction on a year round basis. This would both reduce 
living costs by one year and allow graduates to enter the workforce a 
year earlier. While most traditional institutions offer a summer 
program, they often do not recognize the credits earned toward degree 
requirements. This is inefficient and driven by business 
considerations, rather than academic quality, in most cases.
    6. Consolidate libraries. In the digital age, it is no longer 
necessary to maintain large inventories of books and journals at every 
institute of higher education. A single, full-service library can 
support the students of multiple institutions, as Johns Hopkins now 
does for a number of online institutions, including Excelsior College. 
Imagine the savings if all public institutions in a given state were 
serviced by a single, online mega-library, with the staff and 
technology to support all of the state's public higher education 
institutions.
    7. Reduce or consolidate state and federal regulations that have 
been imposed on higher education, using some form of cost-benefit 
analysis or needs test. Since the 2008 reauthorization of the Higher 
Education Act, the American Council on Education states that 150 new 
regulations have been imposed on higher education. Each of these 
requires expending staff time to review, evaluate applicability, ensure 
compliance and provide reporting. Frequently, these regulations are 
required of all institutions to solve a problem created by a few. For 
instance, the abuse of credit hour criteria by two institutions has 
resulted in a national definition of ``credit hour'' that cannot be 
used by online education providers and flies in the face of efforts to 
move from ``inputs'' to ``outputs'' (results) as a means of determining 
return on investment.
    Compliance with ``state authorization'' regulations has cost my 
institution over $300,000 in its first year. The requirements proposed 
by the ``Military and Veterans Educational Reform Act of 2012'' (Senate 
Bills 2179, 2006 and 2241) will cost Excelsior College another 
$200,000, if enacted as proposed. This $500,000 that my institution 
will need to pay, on a recurring basis, becomes more than $2 billion 
when multiplied by the approximately 4,600 regionally accredited 
institutions that will need to comply. Administrative expense, the 
primary category of cost created by new regulations, is growing at a 
rate 3 to 4 times greater than for academic staff or faculty. These 
positions are for risk managers, compliance officers, legal counsel and 
government affairs staff. Their salaries are a significant part of the 
cost that the nation is experiencing in rising tuition expense.
    8. Provide incentives for institutions to reduce their costs. 
Excelsior College is home to the largest pre-licensure nursing program 
in the nation with approximately 14,000 associate degree-seeking 
students. It is a ``career ladder'' program that only admits persons 
with existing clinical experience such as licensed practical nurses, 
paramedics and military corpsmen. Our School of Nursing has been 
designated, three consecutive times, as a Center of Excellence in 
Nursing Education by the National League for Nursing.
    Yet, none of the students in this particular degree program are 
eligible for Title IV financial aid because this low cost, competency-
based model has been deemed an ``independent study program'' by the 
Department of Education and is, therefore, excluded from Title IV 
participation.
    However, if Excelsior moves this accredited program from its 
current competency-based model, where the costs are a few hundred 
dollars per assessment, to an online instructional model, increasing 
the cost to over $1,000 per course, the program would become federal 
aid eligible. Similarly, recent Congressional discussions of the Pell 
Grant program have led to consideration of a new ``total cost of 
attendance'' formula for online students that actually penalizes those 
who attend low tuition programs.
    9. Reduce ``residency requirements'' for adult students. Many 
traditional institutions require that all graduates earn at least 30 
units from their institution, regardless of available transfer credit, 
as well as complete their final work at that school. Some institutions 
even require that all of the final 30 units be in ``residency.'' For 
mobile adult students this may mean that they have to complete more 
than the 120 semester units typically required for a bachelor's degree. 
Such students, for example, may come to an institution with more than 
100 units available for transfer, but still will need to complete at 
least 30 more to earn their degree because of lack of transfer 
acceptance and residency requirements.
    10. Make greater use of online technology. After nearly 30 years of 
evaluation, most objective observers have come to the conclusion that 
there is ``no substantive difference'' between outcomes achieved online 
and those attained in a classroom. As a result, nearly two-thirds of 
all accredited institutions are now offering at least some credit-
bearing programs online. This includes some of the most prestigious 
institutions in the world. Yet, many of these still attempt to ease on-
campus classroom shortages through the construction of costly new 
buildings rather through the ``blended'' use of online technology, 
combining online with on-campus class sessions. The capacity of 
existing space could be doubled or tripled depending upon the number of 
class meetings which would occur with virtual interactions in addition 
to those conducted face-to-face.
    11. Provide greater access to college courses to high school 
seniors. The 12th year of secondary education is often referred to as 
``a wasted year.'' This need not be the case if seniors are expected to 
complete college-level, general education courses (breadth 
requirements) as part of their final year. While some do take College 
Board AP courses for this purpose, there is insufficient availability 
or support for these programs to create the kind of ``running start'' 
that will benefit college completion and real cost reduction. With the 
plethora of high quality Open Education Resource courses increasingly 
moving online and validation of learning assessments that are 
available, access can be easily expanded.
    12. Combine Open Education Resource (OER) courses with nationally 
reviewed and approved assessments to award low cost degrees. By vetting 
that OER material which maps directly to subject matter assessments 
that are readily available from ETS, The College Board and Excelsior 
College, students can study independently (or with tutors) with 
assurance that their studies and the assessments are aligned. For those 
who have discipline and motivation to satisfy degree requirements in 
this fashion, the cost of a bachelor's degree can be as little as 
$10,000 for someone with little or no prior credit, or considerably 
less for those with accumulated transfer credit.
    Excelsior College is proud of the fact that it has adopted and 
perfected a variety of tools for assessing prior learning and for 
applying these to rigorous State of New York degree requirements. Over 
the College's 40 years it has graduated nearly 150,000 individuals, 
primarily adult learners, with a quality degree. It has done this at an 
average cost per student, per year, of $1,600 according to 2010 IPEDS 
data.
    Thank you for this opportunity to address your subcommittee.
                                 ______
                                 
    Chairwoman Foxx. It is now my pleasure to introduce our 
distinguished panel of witnesses.
    Mr. Scott Pattison is the Executive Director of the 
National Association of State Budget Officers, the professional 
membership organization for State budget and finance officers. 
Prior to his current role, Mr. Pattison served as Virginia's 
State budget officer for 4 years, headed the Regulatory and 
Economic Analysis Section of the Virginia Department of 
Planning and Budget, and served on the Virginia Debt Capacity 
Advisory Board.
    Ms. Teresa Lubbers became Indiana's Commissioner for Higher 
Education under Governor Mitch Daniels in 2009 following a 17-
year career as a Republican member of the Indiana State Senate. 
During her tenure in the legislature, she chaired the Education 
and Career Development Committee.
    Mr. Stan Jones is the current President and founder of 
Complete College America. He has been involved in higher 
education for three decades, serving as Indiana's Commissioner 
of Higher Education, a State legislator, and a senior adviser 
to former Governor Evan Bayh.
    Dr. Joe May is the President of the Louisiana Community and 
Technical College System, the management board for the State's 
14 public 2-year institutions. Prior to joining the system in 
2006, Dr. May was Senior Vice President for Best Associates, a 
private equity group in Dallas, Texas, where he provided 
operational leadership for new higher education ventures.
    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 one minute is left, the light will 
turn yellow; and when your time has expired, the light will 
turn red, at which point I ask you to wrap up your remarks as 
best as you are able. After you have testified, members will 
each have 5 minutes to ask questions of the panel.
    I now recognize Mr. Pattison for 5 minutes.

        STATEMENT OF SCOTT PATTISON, EXECUTIVE DIRECTOR,
         NATIONAL ASSOCIATION OF STATE BUDGET OFFICERS

    Mr. Pattison. Thank you, Chairwoman Foxx, Ranking Member 
Hinojosa and members of the subcommittee. Thank you for 
inviting me to appear today on behalf of the nation's State 
budget and finance officers.
    Since 1945, NASBO has been the professional organization 
for the State budget officers; and I commend the subcommittee 
for examining this important issue of keeping higher education 
costs within the reach of all Americans. Today, what I would 
like to do is briefly provide you a fiscal context for 
continued examination of this important issue.
    Since the beginning of the most recent recession, the State 
fiscal landscape has dramatically changed, as I think most of 
you know. The bottom line is State revenue and State funding 
will be slower growing than usual, and therefore there will be 
very stiff competition for every dollar that the States have. 
For the last 3 fiscal years, for example, State budget growth 
is running at about half of what it used to run prior to the 
recession in terms of growth, and we expect that slower growth 
to continue. In fact, many economists use the term ``the new 
normal,'' and we at the State level are certainly experiencing 
that.
    Demand for funding for everything from Medicaid, health 
care, K-12 education, prisons, transportation, and, of course, 
higher education is extremely high; and the bottom line is 
there simply won't be enough money to go around. So, therefore, 
in this new funding environment, now more than ever, public 
higher education officials, institutions, State government, in 
fact, every level of State government, local government, 
federal government, will need to work together to figure out 
how to improve access and performance while spending resources 
wisely and efficiently and, yes, frankly, figuring out how to 
cut costs.
    Because of balanced budget requirements and other 
restraints, it is true that the proportion of State funding for 
higher education has indeed decreased over the past decade and 
that over the years the State funding for higher education has 
been rather volatile and up and down. However, I do want to 
note that State funding has increased for higher education even 
in this environment; and, interestingly, when fiscal times are 
good, an examination of the data demonstrates that States are 
actually more generous to higher education on average than to 
other parts of State government.
    But, unfortunately, when you look at the data during 
recessions and downturns, States are less generous to higher 
education. And part of that is higher education has alternative 
sources of funding and so, from a practical standpoint, for 
better or for worse, there is an ability to cost shift, which 
certainly occurs.
    I want to note that the proportion of State funds going for 
higher education went from about 11 percent in 2001 down to 10 
percent in fiscal year 2011, and a lot of this is due to the 
increased spending on Medicaid and K-12 education. And, even 
so, State funds to higher education have increased in nominal 
dollars in the last decade by about 50 percent.
    I also want to note you can use statistics in many 
different ways, as we all know, but State governments still 
remain a very critical and important source of funding for 
public higher education. In fiscal year 2010, for example, 53 
percent of the general operating educational expenses were 
supported by State funds. And we shouldn't overlook that 
capital spending from the State is extremely important. States 
for years have issued billions of dollars in bonds to fund 
public university capital projects.
    Now, as I mentioned, higher education for States is 
important and popular; and so when the resources are there, 
they tend to be more generous than average for them. But, 
unfortunately, resources are cut more during downturns. As a 
result, funding for higher education at the State level, again 
because of balanced budget requirements and other constraints, 
tends to be rather volatile.
    But going forward there is going to be a need for a new 
approach to higher education finance. With resources scarce, as 
I mentioned, State officials are going to increasingly expect 
improved efficiency and tying funding at higher education to 
outcomes and results. Because there is simply not enough money 
to go around for all of the areas of State government like 
Medicaid, health care, K-12, and so forth.
    In addition, and you are seeing some of this and we are 
going to hear more about this today, but you need to see more 
of an adoption of innovative reforms, changes in financing 
structure, so that you are tying funds to performance and 
results.
    One of the things I know over time a general concept I want 
to mention is the importance of providing States with 
flexibility so that they can allocate their resources based on 
the need and evidence and not have constraints such as 
maintenance of effort requirements, which provide disincentives 
for providing maybe a big bump in funding during a particularly 
good year.
    So NASBO commends the subcommittee on their attention to 
this very crucial and timely issue. Obviously, it is extremely 
important. So I want to thank you very much for the opportunity 
to testify today on behalf of the 50 State budget officers. 
Thank you.
    [The statement of Mr. Pattison follows:]

      Prepared Statement of Scott D. Pattison, Executive Director,
         National Association of State Budget Officers (NASBO)

    Chairwoman Foxx, Ranking Member Hinojosa and members of the 
Subcommittee, thank you for inviting me to appear before you today on 
behalf of the budget and finance officers of the nation's 50 states and 
territories. For over 60 years, the National Association of State 
Budget Officers (NASBO) has been the professional membership 
organization for state budget and finance officers. As chief financial 
advisors to our nation's governors, NASBO members are influential 
decision makers in state government. They guide their states in 
analysis of budget options and formation of sound public policy.
Fiscal Outlook: A New Era for State Budgeting
    The state fiscal landscape has changed dramatically in recent 
years. Even with a recovering economy, the fiscal environment for state 
higher education support is expected to be very different and much more 
constrained compared to past decades. State budgets continue to be 
impacted by the recent recession, and funding for all areas of state 
government, including higher education, is expected to be constrained. 
This is because future state spending is likely to grow more slowly 
than in past decades, meaning that resources will continue to be 
limited for years to come. At the same time, the demand for funding 
continues to rise in a number of high-priority program areas, 
particularly Medicaid. As a result, competition for state funds is and 
will continue to be stiff, leaving support for traditional higher 
education funding arrangements possibly permanently and unalterably 
different from the past.
    The fiscal challenges facing state governments are largely tied to 
the fact that a few program areas consume very large shares of state 
budgets. As shown in the figure below, elementary and secondary 
education and Medicaid--the two largest state expenditure areas--
together consumed nearly 44% of all estimated state expenditures for 
fiscal 2011.



    The relative size of these two spending areas is even more 
prominent when just looking at expenditures out of states' general 
funds, which are states' own source funds over which they have more 
control and discretion. As shown below, in fiscal 2011, K-12 and 
Medicaid expenditures were estimated to account for over half all state 
general fund spending. Both areas are generally top funding priorities 
for states, leaving state officials with limited room in their budgets 
to make program adjustments to close gaps when necessary. Thus, in 
severe revenue downturns, state officials face constituent and 
political pressures to avoid K-12 education and Medicaid budget cuts, 
forcing difficult choices and spending cuts--at times severe--to other 
areas of state spending, in particular higher education.



    According to NASBO's Spring 2012 Fiscal Survey of States report, 
state fiscal conditions are projected to continue slowly improving in 
fiscal 2013, although general fund expenditures and revenues remain 
below pre-recession levels in many states.\1\ The national economic 
recovery is causing aggregate state tax collections to increase, 
prompting general fund expenditure growth and a further restoration of 
budgetary reserves. Governors' recommended spending plans deliver a 
relatively positive outlook for many states, but valid concerns persist 
with slowing general fund expenditure growth rates compared to fiscal 
2012, constrained revenue growth and a lingering high unemployment 
rate. Such concerns ensure budgetary challenges will continue for 
states in fiscal 2013 and possibly beyond. Thus, though revenue growth 
could help mitigate the funding squeeze and restore more resources for 
critical areas that were cut during the recession, the fiscal situation 
will entail budgetary decisions that must balance the recent rise in 
Medicaid costs over the past two years with increased demand for 
education and other state services. In this new funding environment, 
now more than ever, public higher education institutions and state 
officials will need to work together to improve access and performance 
while spending resources wisely and cutting costs.
Recent trends in public higher education finance
    Higher education is in stiff competition for state funds and its 
share of the budget has certainly been affected by significant funding 
increases for large and high priority budget items like health care 
programs, especially Medicaid. This can be seen in the figures below.



    The proportion of state budget dollars directed towards higher 
education has only decreased slightly over the past decade; however, 
total state spending on higher education has increased steadily over 
time (48 percent between fiscal 2001 and 2011, without adjusting for 
inflation),\2\ except during recessionary periods. On the surface this 
may appear positive, but the actual cost of acquiring a degree from the 
public higher education system has gone up significantly more, placing 
an ever greater reliance on tuition dollars. According to College 
Board, published tuition and fees for four-year public universities and 
colleges increased by 72 percent, after adjusting for inflation, over 
roughly the same time period (from 2000-2001 to 2010-2011 academic 
years). In nominal terms (without adjusting for inflation), four-year 
public institution tuition and fees increased by 117 percent.\3\
    And yet, state governments have in the past and continue to be a 
tremendously critical source of funding for public higher education 
institutions. While public university presidents often claim that state 
funds may make up a small percentage of their institutions' budgets, 
these statistics can be misleading, since they include all parts of the 
institution's budget, including hospital and other expenditures that 
the state has no part in subsidizing. State dollars comprise a much 
larger share of these institutions' yearly expenditures on educational 
activities--or on what the Delta Cost Project refers to as ``education 
and related'' (E&R) expenses per student. Using this measure, the 
national average state subsidy for higher education in 2009 accounted 
for 48% of E&R spending per student at public research institutions, 
51% at public master's institutions, and 68% at community colleges.\4\



    Using a different metric, the share of general operating expenses 
of higher education institutions supported by the state was 53% for 
fiscal 2010 according to the State Higher Education Executive Officers 
(SHEEO), as displayed in the pie chart below.
    In addition to this assistance, states have also historically and 
annually provided enormous financing assistance for capital projects at 
public universities. States often issue bonds for public university 
capital projects.
    Funding for public higher education has been volatile over time. 
States usually are generous to higher education in good fiscal periods, 
only to cut significantly during severe revenue downturns. In fact, 
state funding to higher education experiences outright declines during 
recessionary periods. For instance, state spending for higher education 
was nearly $62 billion in FY 2002, but dropped slightly to $61.6 
billion in FY 2003 and was down to roughly $60 billion in FY 2004. 
Affected again by the latest recession, state funds (that is, excluding 
federal assistance) spent on higher education fell by 0.8% between 
fiscal 2009 and fiscal 2010; however, when federal funds are included 
in the calculation, total state higher education expenditures went up 
by 0.8% in this period due to increased federal assistance resulting 
from the American Recovery and Reinvestment Act. Recessions have led to 
an unfortunate--and almost unique--cycle of state funding for higher 
education. A long-time budget director in Ohio and Illinois, the late 
Hal Hovey provided analysis in the 1990s about this volatile cycle in 
state budgeting. According to Hovey, states use higher education as a 
``balance wheel'' during economic downturns. Essentially, states cut 
higher education funding in bad fiscal times (allowing significant 
tuition increases to make up for the reductions) but then dramatically 
increase higher education spending when state revenues rebound. A group 
convened by the National Center for Public Policy in Higher Education 
(NCPPHE) put it more starkly when they said in a 2009 statement, states 
``follow past patterns of responding to revenue shortfalls by shifting 
the financial burden [of higher education] to students and their 
families and by shutting out undergraduate students. Even when growth 
returns, states will still face structural budget deficits.'' \5\
    More recently additional data on this issue of cyclical funding for 
higher education has been analyzed by William Doyle of Vanderbilt 
University and Jennifer Delaney of the University of Illinois at 
Urbana-Champaign. The two authors analyzed data on state support for 
higher education between 1979 and 2007 and demonstrated the volatility 
in higher education funding. Echoing Hovey's point, they write, ``When 
state revenues are low, higher education is an attractive option for 
heavy cuts because it has the ability to collect fees for its services 
(an ability lacking in most other state spending categories). When 
states revenues are high, higher education is a politically attractive 
area on which to spend money.'' \6\ This past recession has been no 
different with declines in state support for higher education (along 
with significant cuts to nearly all parts of state budgets) and 
increases in tuition.

Moving towards a new approach to state higher education finance
    On a nominal basis, state spending growth has averaged 5.5 percent 
annually over the last few decades.\7\ Economic forecasts for slower 
growth--the new normal--make this scenario unlikely to continue. Based 
on governors' recommended fiscal 2013 budgets, state spending is 
expected to increase by just 2.2 percent,\8\ and average spending 
growth may actually be closer to 3 percent to 4 percent on a nominal 
basis for years to come, in line with slower national economic growth. 
Consequently, even if states want to be generous to higher education, 
they may not be able to be. With resources even scarcer, state 
Governors and lawmakers are going to be asking administrators tough 
questions about state-supported programs and this will include higher 
education. State officials will be reluctant to provide funding 
increases unless they know how the money will be spent wisely and that 
there will be an improvement in program performance.
    State officials, for example, will be less patient with 
universities that have empty classrooms for significant portions of the 
day, or that cannot accommodate all of the students who want a 
particular course. State officials also will be less patient with 
institutional duplication. Too often, each separate institution within 
a public university system wants to do what its peers are doing, 
leading to extensive duplication. When the institutions are able to 
complement each other rather than duplicate, funds can be allocated 
more efficiently. Increases in appropriations for the institutions will 
need to lead to increased performance in some way.
    According to College Board, over the past five years, average 
posted tuition and fees at public four-year higher education 
institutions increased at an annual growth rate of 5.1% after adjusting 
for inflation.\9\ Granted, in some cases universities are simply 
replacing lost state dollars, but state officials still want to 
understand whether this is always necessary and when institutions 
should seek to be significantly more efficient. One major concern among 
state officials was raised by a recent study that found that much of 
the new incoming revenue to institutions was not necessarily spent on 
educating students or producing degrees. There needs to be a serious 
commitment among state and education policy leaders to set specific 
goals, align spending with those goals, improve degree productivity and 
improve public accountability. Goals need to be based on the public's 
needs not necessarily on the interests of individual public 
institutions.
    Funding has rarely been tied directly to results and performance in 
the case of higher education but the scarce resource environment at the 
state, and ultimately at the federal level, may cause this to change. 
More and more officials are focusing on the importance of 
accountability. There will be opportunities in the states to adopt 
different approaches to this dilemma and in fact there are some 
examples to examine. At the same time, certain obstacles impede states 
from tying spending to performance, such as the Maintenance of Effort 
(MOE) provision of the 2008 Higher Education Opportunity Act. With this 
requirement in place, states have less flexibility to allocate 
resources based on need and evidence, and furthermore have a 
disincentive to make a large or one-time increase in higher education 
spending in a given year.
    The bottom line is: Money will be tight for all areas of state 
government. The ability of states to fund higher education at previous 
growth rates may be limited and in many states not possible. The old 
pattern of making up for significant cuts with generous increases to 
higher education when good times return may no longer be possible. With 
resources so scarce, state officials will increasingly expect improved 
efficiency and funding tied to outcomes and results. Working with 
university systems, state officials can improve the situation by 
determining ways to provide more predictable revenue to higher 
education. At the same time, public university officials will need to 
understand and acknowledge the ``new normal,'' and determine ways to 
improve efficiency and performance.
    NASBO commends this subcommittee on their attention to this 
critical and timely issue. Our organization also recognizes the 
importance of state higher education finance and is very interested in 
strategies to reform the system to make it work better for all. In 
light of this, among many other projects, NASBO is partnering with the 
Bill and Melinda Gates Foundation to have state budget officers engage 
in an open dialogue on the critical issues associated with higher 
education finance. This effort will culminate in a final report 
offering best practices and recommendations in this area. Ultimately, 
we expect these efforts and the efforts of many other groups to lead to 
the adoption of changes to higher education finance to make it more 
closely tied to successful outcomes.
    Thank you again for the opportunity to testify here today on the 
subject of higher education finance and share the perspective of the 
nation's state budget officers.

                                ENDNOTES

    \1\ National Association of State Budget Officers. The Fiscal 
Survey of States. (June 2012).
    \2\ National Association of State Budget Officers. State 
Expenditure Report. (2002; 2010).
    \3\ The College Board, Annual Survey of Colleges. (2011).
    \4\ Delta Cost Project IPEDS database. www.deltacostproject.org.
    \5\ The National Center for Public Policy and Higher Education. The 
Challenge to States: Preserving College Access and Affordability in a 
Time of Crisis. (March 2009).
    \6\ Delaney, Jennifer. A. and William R. Doyle. ``The Role of 
Higher Education in State Budgets.'' The Challenges of Comparative 
State-Level Higher Education Policy Research. Kathleen M. Shaw and 
Donald E. Heller (Sterling, Virginia: Stylus, 2007). 55--76.
    \7\ National Association of State Budget Officers. The Fiscal 
Survey of States. (June 2010).
    \8\ National Association of State Budget Officers. The Fiscal 
Survey of States. (June 2012).
    \9\ The College Board. Trends in Higher Education Series: Trends in 
College Pricing 2011. (2011).
                                 ______
                                 
    Chairwoman Foxx. Thank you very much, Mr. Pattison.
    Ms. Lubbers, you are recognized for 5 minutes.

STATEMENT OF TERESA LUBBERS, COMMISSIONER FOR HIGHER EDUCATION, 
                        STATE OF INDIANA

    Ms. Lubbers. Chairwoman Foxx, Ranking Member Hinojosa, and 
members of the subcommittee, thank you for the opportunity to 
testify today. My name is Teresa Lubbers, and I serve as 
Commissioner of Indiana's Coordinating Board for Higher 
Education. My testimony will provide a brief overview of 
Indiana's efforts to lower student costs and enhance success by 
improving college affordability and productivity.
    Indiana is ripe for reform in higher education. The State 
currently ranks 40th in the nation in postsecondary attainment. 
Capitalizing on that need to reform, the Indiana Commission for 
Higher Education has adopted an aggressive strategic plan, 
``Reaching Higher, Achieving More.'' Ultimately, our goal is 
quite straightforward: to ensure that more students complete 
postsecondary credentials on time and at the lowest possible 
cost.
    Indiana has fared no better than most States in containing 
the costs of postsecondary education over the past two decades. 
Hoosier students borrow an average of $27,000 to finance a 
college degree, and Indiana's student loan default rate has 
increased by 35 percent over the past 3 years.
    Indiana has weathered the recent recession far better than 
nearly any other State; and thanks to Governor Mitch Daniels 
and the State's General Assembly, Indiana's funding for higher 
education operations has remained essentially stable. In the 
past decade, Indiana's allocation for financial aid has 
actually increased by 90 percent, and during the current 
biennium it has grown by a generous 4.5 percent.
    Indiana's tuition has increased by nearly 100 percent over 
the past decade, while Hoosier per capita personal income has 
grown by only 27 percent. In response, the General Assembly 
mandated that the commission set targets for tuition and fees 
at the public institutions.
    To their credit, Indiana's public colleges adopted measures 
that lower cost, including decreasing summer tuition, 
guaranteeing on-time graduation, and increasing aid based on 
student performance.
    Affordability is also a function of time spent in 
remediation, excessive credits taken, and credits lost through 
transfer or poor academic advising.
    Indiana has focused on five opportunities for limiting 
higher education costs.
    The first, as has been mentioned, is performance funding. 
Indiana's performance funding formula has evolved since 2003 to 
prioritize degree completion, on-time completion, the success 
of at-risk students, and the production of credentials that 
support Indiana's economy. Indiana allocated 5 percent of 
overall State support for institutions to performance funding 
in the past budget and is committed to increasing the 
percentage in the years ahead.
    The second opportunity is creating innovative educational 
models. As an example, Western Governors University Indiana 
allows students to advance in their degree programs as they 
master the material rather than through credits earned or seat 
time.
    The third area focuses on accelerated credentials. Ivy Tech 
Community College enables some students to earn a 2-year degree 
in 10 months, while Purdue University's balanced trimester 
schedule will allow students to obtain a 4-year degree in 3 
years.
    Currently, 90 percent of Indiana's college degree programs 
exceed 120 or 60 credits. Ball State University has led a 
statewide return to the 120-credit-hour standard, while 
recently enacted legislation mandates that all public 
institutions provide justification for degree programs that 
exceed the standard.
    A fourth opportunity is optimizing credit transfer. We have 
developed a core transfer library of courses that transfer 
seamlessly among public and many private colleges. 
Additionally, Indiana mandated a general education core, which 
will transfer as a block among the State's public institutions.
    Finally, Indiana seeks to increase the transparency of 
return on its educational investment. Students need to know 
that, while all degrees matter, some matter more in terms of 
earning, employment prospects, and job security. Already, the 
commission has supported the development of a college cost 
estimator and will launch a return on investment calculator to 
convey the value proposition of investing in higher education.
    I will conclude with some reflections on the shared 
responsibility which must characterize the discussion of 
educational affordability as we move forward.
    The past two decades have witnessed a perfect storm within 
higher education and the economy. Cost growth among 
postsecondary institutions has been fueled by the extraordinary 
institutional investments in technology, facilities, employee 
benefits, and student support staff.
    The recent economic downturn has caused many States to 
reduce their spending on postsecondary operations. And students 
themselves are not without culpability. Completion rates have 
stagnated, more students supersede normal graduation timelines, 
and many practice less than sound judgment in borrowing and 
spending. This perfect storm has resulted in triple-digit 
percent increases in tuition and fees and runaway increases in 
student debt. Reversing this trend must be a responsibility 
shared among States, institutions, and students.
    While today's hearing focuses on some cost considerations, 
a word of caution is warranted. Neither Indiana nor the nation 
can suffer the long-term consequences of building a productive, 
affordable system of higher education that diminishes academic 
quality. Ensuring affordability at the expense of academic 
rigor would be a hollow victory indeed. To avoid doing so will 
take thoughtful, collaborative action and metrics to promote 
quality learning and accountability.
    I am grateful to the members of committee for convening 
this important discussion and thank you for this opportunity to 
testify.
    [The statement of Ms. Lubbers follows:]

          Prepared Statement of Teresa Lubbers, Commissioner,
                Indiana Commission for Higher Education

    Chairwoman Foxx, Ranking Member Hinojosa and members of the 
subcommittee, thank you for the opportunity to testify on the important 
subjects of affordability and cost containment within higher education.
    My name is Teresa Lubbers, and I serve as commissioner of the 
Indiana Commission for Higher Education. The commission is a 14-member 
public body, created in 1971 to define the missions of Indiana's public 
colleges and universities; plan and coordinate the state's 
postsecondary education system; and ensure that Indiana's higher-
education system is aligned to meet the needs of students and the 
state.
    My testimony will provide a brief overview of the commission's 
goals for college affordability and productivity; the current cost of 
higher education in Indiana; and how those costs have increased over 
time. I will describe actions the Commission for Higher Education and 
its partnering state institutions of higher education have recently 
undertaken to contain, and in some cases reduce, the cost of education 
to Indiana residents. I will also mention briefly additional steps that 
are planned or currently in progress to advance the goal of making 
postsecondary education affordable to all Hoosiers. In particular, I 
will focus my comments on five areas that the commission considers to 
have great potential in limiting the cost of postsecondary-credential 
attainment to students and to taxpayers. Those five areas are: 
performance-based funding, innovative educational-models, accelerated 
credential-completion, optimization of credit transfer, and transparent 
means for students and parents to calculate the return on their 
investments in postsecondary study.

Reaching Higher, Achieving More
    Indiana is ripe for reform in higher education. The state currently 
ranks 40th in the nation in higher education attainment. Less than a 
third of Indiana's four-year college students graduate on time, and 
just over half graduate after six years. Only 4 percent of the state's 
two-year college students complete their credentials on time, and 
merely 12 percent graduate within three years. More than two-thirds of 
students attending the statewide community college require remediation 
in math, English, or both.
    With the recent economic downturn, the imperative to increase 
Indiana's postsecondary attainment was never clearer or more vividly 
impactful on the lives of the state's workforce. As the graph below 
describes, the unemployment rate of Indiana workers by educational 
attainment is inversely proportionate to their average weekly earnings. 
Generally, Hoosiers with postsecondary credentials have weathered the 
recession far better than their less-well educated neighbors; and the 
higher the educational attainment, the more secure the job and the 
greater the income.



    While Indiana's postsecondary attainment lags the national average, 
and has done so historically, the will and call to improve are strong. 
More Hoosiers than ever before recognize that a college credential is 
their passport to opportunity and prosperity, as evident in the recent 
growth in postsecondary study. Within the past five years, enrollment 
at Indiana's statewide community-college has increased by double-
digits, and it has witnessed a remarkable 57 percent increase in 
associate degree production. Moreover, the postsecondary-enrollment 
rate of recent high school graduates is moving in a positive direction, 
now at 67 percent. Increasingly, Indiana's economy demands better-
skilled workers. The Bureau of Labor Statistics projects that by 2018, 
Indiana will have 500,000 job vacancies requiring postsecondary 
credentials, compared to only 325,000 with high school diplomas. 
Indiana's legislature is equally committed to improvement, having 
enacted broad-sweeping reforms to improve the state's K-12 system, 
while actually increasing the allocations of state funds for financial 
aid during the recent economic downturn.
    With the need to reform and the commitment to do so at hand, in 
March 2012, the Indiana Commission for Higher Education adopted a new 
strategic plan, titled Reaching Higher, Achieving More. The development 
of a new plan reflects the evolving environment of higher education, 
including employer demands for higher-skilled workers, the imperative 
to ensure quality in the credentials produced, the need for quicker and 
alternative pathways to credential attainment, and the fact of ever-
increasing costs of tuition and fees.
    To respond to that evolving environment, Reaching Higher, Achieving 
More envisions a higher-education system grounded in three overarching 
principles. The system must be student-centered, recognizing the 
changing needs and demographics of Indiana students and placing 
students at the center of all reform efforts. It must be mission 
driven, recognizing Indiana's diverse landscape of public and private 
postsecondary institutions, each with a distinct but integrated role 
within the system. It must be workforce aligned, recognizing the 
increasing knowledge, skills and credential attainment needed for 
individual lifetime-employment and to ensure Indiana's economic 
competitiveness.
    To advance the principles embedded in Reaching Higher, Achieving 
More, and to honor the evolving environment of higher education, the 
plan calls for action by the commission and by Indiana's public 
universities in three key areas: completion, productivity and quality. 
Specific recommendations are set forth to increase credential 
attainment, generally, as well as on-time graduation rates. The plan 
supports improvements to remedial education; a focus on improved 
secondary-postsecondary alignment; and increases in dual-enrollment 
courses and other means of accelerating credential completion. It calls 
upon the colleges and universities to collaborate more fully on 
instructional delivery, to expand joint-purchasing agreements, and to 
establish annual targets for savings. And the document seeks reform in 
the allocation of state financial-aid awards, facilitated transfer of 
academic credit, and comparable assessments of program quality. While 
many and aggressive, the objectives contained within the plan are well 
reasoned; some are reflective of the very best practices in higher 
education nationally, while others are truly innovative in concept and 
approach.
    Ultimately, the goal of Indiana's environmentally-responsive, 
integrated system of higher education as envisioned in Reaching Higher, 
Achieving More is quite straightforward: to ensure that more students 
complete postsecondary credentials on time and at the lowest possible 
cost.

Indiana's Educational Costs and Financial Aid
    Indiana has fared no better than most states in containing the 
costs of postsecondary education over the past two decades. Too many 
Indiana families must borrow large sums to pay for higher education. In 
fact, Hoosier students borrow an average of $27,000 to finance a 
college degree, and according to the U.S. Department of Education, 
Indiana's student loan default rate has increased by 35 percent over 
the past three years.
    It is true that Indiana has weathered the recent national 
recessionary-period far better than nearly all states, attributable to 
sound fiscal management and prudent spending cuts across state 
agencies. Credit is due to Indiana's political leadership, Governor 
Mitch Daniels and the state's General Assembly, for their extraordinary 
efforts to sustain postsecondary funding during a period of significant 
economic turmoil. Whereas most states have trimmed, and many have 
eviscerated, their appropriations for public institutions, Indiana's 
higher-education funding has remained essentially stable in terms of 
direct-dollars.
    Moreover, recognizing the ever-increasing importance of college 
access, Indiana has nearly doubled its appropriation for student 
financial-aid over the past decade. State student-support has increased 
by 90 percent, and remarkably, the appropriation has grown by $23 
million during the current biennium--a generous 4.5 percent increase. 
Importantly, Indiana's financial-aid program is primarily needs-based, 
focused on Hoosiers who would otherwise be challenged to pay the cost 
of postsecondary study. And since Indiana grants-in-aid follow the 
students, whether they enroll in public, private or proprietary 
institutions, students are free to choose the school that best fits 
their needs.
    Nationally, much recent debate has centered on the role of tuition 
and fee increases in college affordability. The graph below describes 
tuition increases in comparison to other cost-sectors. Over the past 
twenty years, tuition and fees have grown nearly 300 percent, while 
other cost-sectors have increased by a fraction of that rate. That 
tuition and fees have outpaced increases in healthcare costs is 
especially remarkable, given the substantial national-outcry about 
healthcare affordability.



    Indiana faces the same concerns. Despite Indiana's efforts to 
sustain higher education appropriations and increase funding for 
student financial-aid, state dollars simply cannot keep pace with the 
year-over-year cost increases among postsecondary institutions. The 
table below describes the increases in tuition and fees at Indiana's 
public institutions over the past decade, as compared to changes in 
Hoosier per-capita personal income and the consumer price index. The 
average tuition and fees at Indiana's public colleges have increased by 
nearly 100 percent over the past decade, while Hoosier per-capita 
personal income has grown by 27 percent and inflation by 24 percent. To 
address this dramatic increase, the legislature has mandated that the 
commission set targets for tuition and fees at public institutions and 
requires each institution to hold an open hearing on proposed 
increases.



    To their credit, Indiana's public postsecondary-institutions have 
begun to adopt measures that directly lower their costs of tuition and 
fees. While some measures are quite straightforward, others seek to cut 
costs while also incentivizing student achievement.
     Indiana University, Ball State University and the 
University of Southern Indiana have lowered their summer-session 
tuition and fees by as much as 25 percent.
     Vincennes University has instituted the ``Middle-Income 
Hoosier Scholarship,'' which provides semesterly tuition reductions to 
income-qualified students who maintain a 2.5 grade-point average. 
Students who graduate within five semesters receive a $250 refund.
     Indiana State University has launched the ``Sycamore 
Graduation Guarantee,'' which guarantees eligible students that they 
will be able to complete a bachelor's degree within four years. If not, 
they will be able to enroll in remaining courses tuition free.
    While direct reductions in postsecondary tuition and fees are 
certainly welcome, it is widely recognized that college costs, and 
therefore affordability, are also a function of more indirect 
variables. The correlation between cost and time spent by students in a 
course of study is clear. By delaying college completion, time spent in 
remedial courses, a superabundance of academic-credits taken, and 
academic credits lost through transfer or poor academic-advising all 
contribute to inflated student costs. In fact, these factors diminish 
the likelihood of completion all together; and low completion-rates 
surely increase institutional costs. Moreover, if students' expected 
return on their educational investment is not transparent or evident, 
they will be less likely to make good, cost-conscious educational 
choices, and may not make them at all.
    In recognition of the impact of these more indirect drivers of 
postsecondary costs, the Indiana Commission for Higher Education and 
its partner postsecondary-institutions have committed to a series of 
reforms as articulated in Reaching Higher, Achieving More. Among them, 
five opportunities for action are particularly noteworthy for their 
potential to lower the cost of college completion.

Performance-Based Funding
    The commission believes that funding for our state's colleges and 
universities should be tied to key values and needs, especially higher 
graduation rates and credentials that lead to greater economic 
opportunity for students and the state.
    Historically, support for Indiana's public colleges and 
universities had been determined by set increases in state funding, 
based on the number of students enrolled in a given year and adjusted 
for inflation. In other words, the more students enrolled, the greater 
the funding colleges received, without respect to how many students 
actually graduated. A performance-based funding formula represented, 
therefore, a significant shift from past practice.
    Indiana's performance-funding formula was first enacted in 2003 as 
an incentive to increase the level of research conducted at the public 
institutions of higher education. In the intervening years, the formula 
continued to evolve, expanding upon its incipient research-focus to 
place priority on degree completion, on-time completion, and the 
success of at-risk students. Indiana allocated 5 percent, approximately 
$61 million, of overall state-support for institutions to performance 
funding in the 2011-13 biennial-budget.
    As Indiana plans for its next biennial budget, new performance 
criteria have been established. The refined performance-funding formula 
complements the existing foci by rewarding successful remediation 
strategies, establishing targets for credit-attainment, and 
incentivizing institutions to produce graduates in fields that support 
Indiana's economic-development goals. To honor mission differentiation 
among the state's colleges and universities, and to support their 
individual priorities, each institution may also designate a unique 
metric to be included in its performance formula. The new criteria fit 
within three high-level foci of performance:

Completion Metrics
     Overall Degree Completion--Includes one-year certificates, 
associate degrees, bachelor degrees, master's degrees and doctoral 
degrees.
     At Risk Student Degree Completion--Includes one-year 
certificates, associate degrees and bachelor degrees. Applies to Pell 
recipients at the time of graduation.
     High Impact Degree Completion--Includes bachelor degrees, 
master's degrees and doctoral degrees in STEM-related fields. STEM is 
defined as Science, Technology, Engineering and Mathematics, based on 
national standards. This metric applies only to research campuses.

Progress Metrics
     Student Persistence Incentive--Provides an incentive for 
students successfully completing a set number of credit hours. Two-year 
institutions are rewarded for students earning 15, 30 and 45 credit 
hours; four-year, non-research campuses are rewarded for students 
earning 30 and 60 credit hours. The metric applies only to community 
colleges and non-research four-year institutions.
     Remediation-Success Incentive--Provides an incentive to 
two-year institutions for students who successfully complete a remedial 
course and subsequently complete a gateway college-level course in math 
and English.

Productivity Metric
     On-Time Graduation Rate--Provides an incentive for 
increased on-time graduation rates at two- and four-year institutions. 
On-time graduation rate is considered four years for four-year 
institutions and two years for two-year institutions.
    Institutional Defined Productivity Metric--This metric is defined 
by each institution and submitted to the commission for approval. The 
metric must align with the strategic plan of the institution and focus 
on reducing the cost of attendance to the student. Although differing 
by institution, the goal is to rewarding institutions for improving 
productivity in some manner.
    Indiana is widely recognized as a national leader for advancing an 
effective performance-based formula for higher education funding, and 
it is a practice we advocate for consideration among other states, as 
well. With the staunch support of Governor Daniels and members of the 
General Assembly, Indiana has made performance funding a foundational 
principle of public support for our higher-education system, and the 
state is also committed to increasing the percentage of overall 
institutional support allocated through performance in the years ahead.

Innovative Educational-Models
    Increasingly, Indiana's college students are a diverse group from 
all ages and backgrounds who are working (often full time), commuting 
to campus, and balancing their academic work with family obligations. 
The changing demands of Hoosier students requires new approaches to the 
delivery of higher education, embracing flexibility and expanding 
options that support student learning at the time, place and pace that 
best fits an individual's unique needs and circumstances. Within 
Indiana's system of public postsecondary institutions, several 
innovative models meet those changing demands.
    Western Governors University-Indiana fills a unique role among 
higher-education institutions. WGU-Indiana is a fully-online university 
that allows students to advance in their degree programs as they master 
the material rather than through credits-earned or time-spent in class. 
WGU-Indiana's competency-based approach caters specifically to working 
adults, enabling motivated students to earn bachelor and master's 
degrees faster and at lower cost than they could otherwise. Moreover, 
WGU-Indiana offers the state's community college graduates full 
transfer-credit for prior coursework, an application fee waiver, and a 
5 percent tuition discount.
    Ivy Tech Community College also employs a competency-based approach 
through its Ivy Institute of Technology. The Institute delivers 
academic programs that are structured around industry-recognized 
certifications in such high demand areas as manufacturing, computing 
technology, and logistics. The 30-week programs are offered as a single 
progression of skill acquisition within a fixed daily class schedule of 
6 hours per day. The self-contained instructional day includes all 
academic activity, allowing students to engage in evening employment, 
if necessary. The curricula are delivered through self-paced, computer-
based instruction, and are facilitated by a content-expert, certified 
faculty. At the completion of the program, students earn a certificate 
of completion and are eligible to sit for one or more nationally-
recognized certification exams.
    In addition to these competency-based models, Indiana actively 
encourages the state's colleges and universities to award credit for 
prior learning. Through competency-based assessments that evaluate the 
knowledge and skills individuals have mastered in their work and 
related experiences, students earn credit, thereby shortening the 
length of their formal studies.
    Taken together, these and other innovative educational-models are 
providing more options for students to complete postsecondary studies, 
while ensuring academic quality.

Accelerated Credential Completion
    Recognizing that time is the enemy of completion, the commission 
increasingly emphasizes on-time and accelerated degree completion. In 
addition to the on-time completion component of the performance funding 
formula noted previously, several of the state's postsecondary 
institutions are implementing alternative course-delivery and 
scheduling options that enable students to earn an associate degree in 
one year and a bachelor's degree in three years.
    Ivy Tech Community College's Associate Accelerated Program (ASAP), 
a highly-structured associate degree program enables students to earn a 
two-year degree in 10 months. The accelerated program is intensive, 
applying rigorous interventions to address remediation needs and 
requiring students to be on campus 40 hours each week for coursework 
and group study. Designed specifically for students from low-income 
households, the ASAP program targets students during the critical 
transition period from high school to college. As participants in ASAP, 
students are encouraged to think of college as a job, and to that end, 
they are provided with a stipend of $5,200 per year, which covers 
living expenses and encourages them to make coursework their first 
priority. This focus also ensures that students learn critical soft 
skills, including the importance of arriving on time, staying on 
schedule, and working collaboratively with others.
    Purdue University is transitioning to a balanced trimester schedule 
in an effort to streamline students' path to graduation and to increase 
institutional operating-efficiency. Offering a third semester each year 
will allow students to complete a four-year degree in as little as 
three years, saving students both time and money in the process. When 
fully implemented, Purdue estimates that the trimester initiative could 
provide $40 million in additional revenue for the university and would 
support better use of classrooms, residence halls and other campus 
facilities during the summer months.
    Eliminating excessive credit requirements is another effective 
strategy for supporting on-time and accelerated degree completion. 
Credit requirements have steadily increased nationwide over the years, 
and currently, nearly 90 percent of Indiana college degree programs 
exceed the historical standard of 120 credit hours for a bachelor's 
degree (four years of full-time attendance) and 60 credits for an 
associate degree (two years of full-time attendance). Ball State 
University has led a statewide return to the 120 credit-hour standard 
for all bachelor's degrees offered by that institution. Further, 
recent-enacted legislation mandates public institutions to provide 
justification for degree programs that exceed the standard, and 
establishes an ongoing audit-process that empowers the commission to 
enforce the statute.
    Building on this recent progress, Indiana is currently exploring 
related on-time and accelerated completion incentives for students. 
Possible policy directions include encouraging full-time students to 
take 30 credit hours per year and potentially capping state financial 
aid for students who accumulate excessive credits.

Optimization of Credit-Transfer
    College becomes more affordable when students are able to transfer 
without losing credit, take courses from less expensive colleges before 
transferring, succeed after transferring with a strong foundation for 
subsequent coursework, and easily access reliable information about 
their transfer options. To these ends, Indiana has, over the past ten 
years:
     Created a statewide comprehensive community college 
system;
     Undertaken curricular innovations;
     Facilitated ways high school students can earn college 
credit; and
     Utilized technology to inform students about transfer 
opportunities.
    Indiana has the only statewide community college system that is 
accredited as a single institution. Such an approach facilitates 
transfer of credit, providing a single curriculum and common syllabi 
for each credential statewide. Moreover, transfer agreements with four-
year institutions are more readily maintained; and the community 
college's accreditation as a single institution promotes system-wide 
quality.
    For nearly a decade, the Commission for Higher Education has worked 
with the state's institutions of higher education to develop a 
legislatively-mandated Core Transfer Library (CTL) of some 85 courses. 
All courses in the CTL transfer to all public institutions, and many 
private colleges participate in the CTL on a voluntary basis, as well. 
To supplement the CTL, the commission worked closely with the Indiana 
General Assembly during the last legislative session to establish a 
common statewide-transfer general-education core, which, when 
completed, will transfer as a block of 30 credits to any of the state's 
public institutions. Notably, the general education core is to be based 
on a set of competencies--what students are able to know and do--rather 
than a standard set of distribution requirements of credits. The 
legislation also calls for a common course-numbering system to reduce 
confusion among institutions and students, alike.
    To increase public transparency in credit transfer, the commission 
maintains a comprehensive TransferIN website that helps students to 
understand how completed courses transfer between colleges and to avoid 
wasting time and money on duplicative coursework. Students are also 
able to determine how a specific course they are contemplating will 
transfer to another institution, if at all.
    Indiana has also worked to provide students with more opportunities 
to complete college-level coursework while in high school. By statute, 
each Indiana high school must offer a minimum of two dual-credit and 
Advanced Placement courses, and the state has made a concerted effort 
to expand the numbers of students completing these rigorous courses. 
From 2006-2011, Indiana increased the percentage of high school 
graduates passing AP exams from 7.5 percent to 14 percent, while dual-
credit course-taking increased by 317 percent to include more than 
43,000 students. To support affordable access to dual credit courses, 
state law also gives the Commission for Higher Education the authority 
to limit the cost charged to students by the Indiana's public colleges 
and universities. For 2011-2013, that cost was capped at $25 per credit 
hour. The commission has also put in place quality-control mechanisms 
to ensure that dual-credit courses are truly college-level courses.
    With these reforms, Indiana has made important strides in ensuring 
the fungibility of coursework between a less-expensive community 
college and a four-year institution. Students who begin their education 
at a community college will be able to transfer their credits 
seamlessly to four-year schools. Likewise, four-year students who 
discover a community college or a different university to be a better 
fit, will not lose academic credit. These efforts will undoubtedly help 
make college more affordable to students and lead to greater student 
success.

Transparent Return on Education Investment
    As the cost of postsecondary education rises, students and their 
families are increasingly called upon to finance tuition and fees 
through personal savings or student loans. As noted above, the average 
Hoosier student now graduates with $27,000 in college debt. In making 
investments in college study, students and families alike, increasingly 
seek assurance that they will realize a return, in employment 
opportunity, in job security and in financial remuneration.
    Although there is no single measure, data point or piece of 
evidence that will fully satisfy that need for assurance, a number of 
sources of information can be assembled to help students and their 
families make good investment choices. One important data point is 
presented in the chart on page two of this document, describing the 
inverse proportionality between unemployment risk and wages produced as 
academic attainment increases. A multiplicity of data demonstrate the 
truism that while all postsecondary degrees matter, some matter more in 
terms of postgraduate earnings-level, employment prospects, and job 
security. Other data attest to the differential quality of education 
among institutions, demonstrating that the same degree, earned from 
disparate institutions, frequently results in widely-varying employment 
prospects and salary levels.
    The whorl of these data points and other information about 
postsecondary outcomes begs for improved aggregation, accessibility and 
transparency; and sound advice on appropriate debt-levels should be 
part of the calculus. The goal of this ambitious project is support for 
students and their families in appreciating the value proposition in 
higher education--in making reasoned and informed judgments about their 
financial investments in postsecondary study and understanding the 
value of what they stand to yield from them.
    The Commission for Higher Education has embarked on such a project 
to bring that information into a one-stop, user-friendly, easily-
accessible format for Hoosier. When complete, the utility will allow 
students to discern their interests and values for a professional 
career; to identify those careers that best fit their aspirations and 
financial goals; to discover which academic programs and postsecondary 
credentials lead to that career; to learn which institution meet their 
personal and academic needs, and those of employers; to obtain precise 
information about available financial aid; and to understand how their 
own monetary contributions should best support their education.
    Indiana has already made good progress on the project. Learn More 
Indiana is a communication and outreach initiative that guides students 
through a series of questions and exercises designed to help them plan, 
prepare and pay for postsecondary studies. Planning includes completing 
the Indiana Career Explorer interest and values inventory and 
investigating universities and colleges with the College Navigator 
developed by the Institute of Education Sciences. The Preparing section 
counsels students in good study habits and leads them to explore 
careers through information provided by the United States Department of 
Labor. And when it comes to Paying, students are directed to the 
commission-supported College Cost Estimator, a robust tool that uses 
family-specific income information and demographic data to predict, 
quite accurately, their anticipated costs at any Indiana college or 
university.
    Within the coming months, the assistance already available at Learn 
More Indiana will be supplemented by a Return on Investment Calculator. 
The calculator will frame the value proposition inherent in higher 
education, generally, as well as the anticipated returns on making 
specific choices about college major, degree type, institution and 
cost. Moreover, the commission has begun scoping a prescription, likely 
in the form of a percent on post-graduation earnings, that will provide 
students and their families solid advice on appropriate debt-levels for 
their postsecondary education.
    The commission anticipates that, equipped with fuller information 
about their interests, institutional quality, major-to-career options, 
employment prospects, financial aid and borrowing, students will be 
empowered to make the good decisions about their postsecondary study 
and will understand that a sound and appropriate financial commitment 
will produce lasting dividends.

Summary
    I will conclude with some reflections on the shared responsibility 
which must characterize the discussion of educational affordability as 
we move forward.
    The past two decades, right up to the present, have witnessed a 
perfect storm within higher education and the economy. Cost growth 
among postsecondary institutions has been fueled by the emergence of 
widespread information-technology and the need to make extraordinary 
capital investments to facilitate learning and to support 
administrative needs. Many universities have made costly investments in 
residence halls, fitness centers, and other high-visibility facilities, 
as well as student support staff, in an on-going race to attract 
students who place a premium on such amenities.
    Concomitantly, evolving employer demand for a highly-skilled 
workforce has required more students to seek postsecondary study, 
placing further pressure on institutions to expand their offerings and 
facilities to accommodate burgeoning enrollment. Complicating these 
upward pressures on cost, the recent national economic-downturn has 
caused many states to contract their spending on postsecondary 
operations. Students themselves are not without culpability: 
postsecondary completion rates have stagnated, more students supersede 
normal graduation-timelines, and practice less-than-sound judgment in 
borrowing and spending.
    The result of this perfect storm has been triple-digit-percent 
increases in tuition and fees, and runaway increases in student debt-
load. To reverse this trend and rationalize postsecondary costs must be 
a responsibility shared among states, institutions and students.
    Indiana has taken significant steps to contain higher-education 
costs and to advance the goal of making postsecondary education 
affordable to all Hoosiers. More needs to be done, but in adopting 
Reaching Higher, Achieving More as its strategic plan, the Indiana 
Commission for Higher Education has articulated a clear pathway 
forward--one that is student-centered, mission-driven and workforce-
aligned--with specific, actionable goals. The commission remains 
grateful to have the support of Governor Mitch Daniels and the Indiana 
General Assembly in sustaining public investments in the operations of 
the state's institutions and in increasing the amount of aid available 
to Hoosier students.
    The commission is fortunate to have the partnership of Indiana's 
public colleges and universities, whose leadership is active and 
engaged in efforts to improve postsecondary affordability. Those 
institutions have already begun to adopt cost-containment measures 
aimed directly at lowering tuition and fees. Many have implemented 
other affordability measures that will allow students to graduate more 
quickly and at reduced cost.
    Now we must turn our attention more fully to the crisis of student 
debt. Solutions will require the development of assistance mechanisms 
and making information more transparent, so that students and their 
families can simultaneously realize the overwhelming value proposition 
inherent in postsecondary attainment, while understanding fully the 
ramifications of borrowing and the need to spend wisely.
    While today's hearing focuses on cost considerations, a word of 
caution is warranted. Neither the nation nor the State of Indiana can 
suffer the long-term consequences of building a productive, affordable 
system of higher education that gives short shrift to academic quality. 
Ensuring affordability at the expense of academic rigor would be a 
hollow victory, indeed. It would be far too easy to develop academic 
programs that accelerate completion at the cost of learning, and 
credentials that have no value within the workplace. To avoid doing so 
will take thoughtful, collaborative discussion among all stakeholders 
in the outcomes of postsecondary education, as well as mutually-
accountable, eagerly-accepted shared responsibility in making positive 
change.
    I am grateful to the members of the subcommittee for convening this 
important discussion and thank you for the opportunity to contribute 
testimony.
                                 ______
                                 
    Chairwoman Foxx. Thank you, Ms. Lubbers.
    Mr. Jones, you are recognized for 5 minutes.

              STATEMENT OF STAN JONES, PRESIDENT,
                    COMPLETE COLLEGE AMERICA

    Mr. Jones. Thank you, Chairwoman Foxx.
    I am Stan Jones. I am president of Complete College 
America. We are a relatively new national organization, not-
for-profit. We have a single purpose. That is college 
completion. We principally work with States, with governors, 
with key legislators within States. We have been funded, 
fortunately, by the Gates Foundation, Lumina, Ford, Carnegie, 
and Kellogg; and that has been our focus.
    I want to approach this hearing just a little bit 
differently than my good friend and colleague, Teresa Lubbers 
from Indiana. When I was first elected to the Indiana General 
Assembly, being quite a bit older than Teresa, in 1974, college 
tuition had literally doubled in 2 years; and it was a hot 
issue in 1974. And Indiana enacted in 1975 a 2-year tuition 
freeze, the first and only time they have done that. It has 
been a hot issue ever since. And Chairwoman Foxx very correctly 
outlined the situation that States are facing, that this 
country is facing and its students are facing very well.
    But I would like to take a different look at this tuition 
affordability issue. If we think that college is increasingly 
expensive for students, it is even more expensive for students 
who don't graduate; and half those that start at 4-year 
colleges don't graduate. Two-thirds of those that start at 
community colleges don't graduate. That is crippling. Those 
students are more than twice as likely to be in default on 
their student loans, twice as likely to go into bankruptcy.
    What is even more expensive, as well, is what we think of 
college as a 4-year enterprise. Actually, it takes most full-
time students 5 years to graduate. It takes most students going 
to community colleges that are going full time not 2 years, not 
3 years, but 4 years to graduate.
    So you think about tuition at a community college, you 
might think about doubling it. If you think about it at a 4-
year institution, it is at least 20 percent more. We only have 
about a third of the students going to 4-year colleges that 
graduate on time. So when we talk about these things, we have 
to talk also about the price of failure, about students who 
don't graduate and students who take too long.
    One of the contributing factors that I see, and that 
Congressman Miller has introduced some legislation on, is 
transfer of credit. It simply doesn't work in many States. 
Everybody is working on this problem.
    Students also accumulate too many credits. Typically an 
associate degree, instead of being 60 hours, the average 
student gets 80 hours; and typically a 4-year student, instead 
of 120 hours, it takes 135 credit hours to graduate. And many 
of these credits are inefficient credits. So--not enough 
students graduate and it takes too long and they accumulate too 
many credits.
    What are States doing? They have been pretty aggressive, as 
my colleague has pointed out, in terms of performance funding, 
in terms of 120-hour credit caps, in terms of more on-time 
pathways, in terms of attacking remediation. We have about 60 
percent of students that start at community colleges, start 
taking remedial courses, courses they just literally passed in 
high school, a very expensive proposition. So these strategies 
are being put in place.
    Rethinking what a full-time student is. If we think a full-
time student is 12 credit hours, they are already on the 5-year 
plan, not the 4-year plan. So States are working toward getting 
more students on 15 and 16 credit hours a semester so they can 
graduate in a timely way.
    What is important here, and I guess what I would like to 
say to you, is the federal government can provide more 
transparency. Right now, we don't report graduation rates for 
Pell students. Even though we spend literally billions of 
dollars a year on Pell students, that is not part of the 
federal database. We don't report graduation rates on part-time 
students. Right now, they represent 40 percent of all the 
students going to college in this country. We don't report 
graduation rates on adult students, who increasingly are an 
important part of the economy for all these States. So 
transparency is very important as part of what the federal 
government can do.
    But also importantly, this country has been hugely 
successful on our access agenda. We have record-breaking 
enrollment in the middle of this recession, more students going 
to college than ever before, the freshman class is more 
representative of this country than ever before in respect to 
Latinos and African Americans than ever before. But if you look 
at graduation day, we have lost many of those demographics by 
graduation day, and less than half of the students that start 
finish.
    So we would like the federal government to rethink that 
this should not only be an access agenda with student loans, 
with Pell grants, with college access, but also a success 
agenda. How can we better model State programs and federal 
programs to respect progress toward degrees, on-time 
graduation, higher graduation rates?
    So thank you very much for having me. It is a pleasure.
    [The statement of Mr. Jones follows:]

 Prepared Statement of Stan Jones, President, Complete College America

Executive Summary
     A new American majority of students is emerging on college 
campuses. These students must often delicately balance long hours at 
jobs they must have with the higher education they desire. 
Approximately 40% of all American college students today feel they can 
only manage to attend part-time. And just one-quarter of American 
college students attend full-time at residential colleges.
     Even though this emerging majority has fundamentally 
different needs, American higher education in general has been slow to 
change, continuing to deliver courses and programs designed decades ago 
and best suited for full-time, residential students.
     To achieve the substantial gains in college completion 
America must have to compete, we must reinvent American higher 
education. To do so, requires significant shared responsibility by all 
stakeholders, including government. More of the same will not do.
     Historic data has proven that time is the enemy of college 
completion: the longer it takes to graduate, the less likely one is to 
do so. And more time on campus means more is spent on college, adding 
high costs as another cause for dropping out.
     Time, choice and structure are the essential optics 
through which all higher education reforms must be viewed in order to 
maximize the likelihood of graduating more of today's students.
     Successful, large-scale programs and systems around the 
country have proven that by utilizing informed choice and structured 
delivery, students can successfully balance jobs and school--and are 
much more likely to graduate.
     States, as the leading investors in higher education, have 
the power and authority to demand more from higher education--and they 
have a moral obligation to do so.
     By utilizing the NGA/CCA Common College Completion 
Metrics, yawning gaps in current data collection will be filled and 
states will be empowered with new tools to hold higher education 
accountable and inform reform design.
     Congress can seize key opportunities to encourage states, 
incent needed reforms, and signal its clear interest in more college 
graduates, not just enrollments.

Introduction
    Measured on the first day of classes each fall, higher education in 
America appears to be a roaring success. In most communities, our 
campuses are bursting at the seams with eager students. More important, 
colleges have nearly erased racial gaps in enrollment: According to a 
2003 US Department of Education report, 83% of whites pursue higher 
education in the first eight years after high school--and 80% of blacks 
and Hispanics do the same.
    We have clearly convinced almost all of our young people that for 
good jobs and a brighter future there is one irrefutable fact: high 
school isn't high enough. Our colleges provide most of the open doors 
and essential ladders to the greater opportunities and higher 
achievement young people desire.
    There's no disputing that a generation or more of sustained 
efforts--while unfinished--have yielded impressive gains in access. 
But, access without success is an empty promise--and a missed 
opportunity with severe economic consequences for students, states and 
our country.
    With so much at stake, how is America doing? Barely more than half 
of full-time students graduate with 4-year bachelor's degrees in six 
years--and fewer than three in ten pursuing 2-year associate degrees at 
our community colleges graduate in three years! Sadly, part-time 
students graduate at even lower rates.
    To make matters worse, a closer look on graduation day reveals that 
those eventually receiving degrees look very different than the student 
body on the first day of class: the hopes raised by nearly equitable 
enrollments are crushed by long persistent gaps in achievement and 
completion.
    Given projections that two-thirds of all jobs in 2020 will require 
advanced training or education, we simply have no choice: We must get 
more of our students--from all walks of life--to graduation day.
    Many argue that it is the significant cost of higher education that 
is the greatest obstacle to student success. If we simply cut tuition 
and fees, they claim, our country can significantly boost college 
graduations.
    While it is true colleges must become more efficient and tuition 
more affordable, we will not regain our intellectual leadership in the 
world without new policies, legislation and strategies to reduce the 
time it takes students to complete degrees and certificates.
    Historic data has now proven that time is the enemy of college 
completion, not just tuition. Today's college students are dramatically 
different than those of the past: most now commute to campus, balancing 
jobs, school and often family.
    Yet higher education has done little to adjust to the changing 
needs of this new majority. The result: students are spending longer 
than ever in college. The longer it takes, the more life gets in the 
way, and the less likely it is that one will ever graduate. More time 
on campus means more is spent on college, adding high costs as another 
driver of dropping out. Simply put: time is money.
A New Reality for an Emerging Majority on Campus: Time is the Enemy
    Why does America have such abysmal completion rates? Of the many 
reasons offered, one compelling fact stands above all others: Today, 
most students balance the jobs they must have with the higher education 
they desire.
    Today's college student is a far cry from the American archetype of 
the 19 year-old college kid who lives on campus, attends full-time, 
doesn't work, and gets most of his bills paid by Mom and Dad. In fact, 
only 25% of college students in our country today attend residential 
schools.
    What's the new reality? According to a recent study by Public 
Agenda, nearly half of students at 4-year schools work more than 20 
hours a week. At community colleges, 60% are at jobs more than 20 hours 
a week, and a quarter of these stressed out students are working more 
than 35 hours. Nearly 40% of all of our college kids attend part-time. 
Roughly a quarter of them have children of their own to support. And 
yet they still find a way to come to college to pursue better lives.
    With so much at stake, today's students need to finish their 
studies as soon as possible to get on with life. They need clear 
pathways to quality degrees and career certificates in order to land 
the good jobs they desperately want. And they must have predictable 
schedules they can count on in order to balance jobs and school. Why is 
this so important? Because the more time college takes, the more life 
intrudes. And when more life intrudes, fewer students complete college.

The Completion Cornerstones: Time, Choice and Structure
    For years, adding time and more choices have been our answers. 
Semester long, multiple-level remediation courses, limitless periods of 
exploration before declaring a major, and midnight courses are all 
examples of well-intended efforts to try and meet student needs. When 
coupled with other policies like additional credit requirements or 
transfer rules that don't readily recognize credits earned at multiple 
campuses, the result has been to lengthen the time to degree for many 
students--or hinder degree completion altogether.
    The numbers make it clear: When it comes to college graduation, 
time is the enemy. According to federally collected data in 2008, only 
29% of full-time students at public 4-year institutions graduated on 
time. After the fifth year of pursuing a Bachelor's degree, 19% more 
graduated.
    Now consider the sixth and eighth years after enrollment: Only 6% 
then 3% more students made it to graduation day, respectively. Giving 
students more time to graduate does not yield many more graduates. Why? 
Simply put, life gets in the way.
    Today's students need less time on campus, fewer confusing choices 
and more structured schedules. Time, choice and structure are the key 
issues to address the needs of today's students and the optics through 
which efforts to boost completion must be viewed.

Directed Choice Yields More Graduates
    More time and uninformed choice work against college completion. To 
understand why, we must again consider the nature of today's college 
students--and human nature, in general.
    Respected researcher and educator, James Rosenbaum, of Northwestern 
University, and his colleagues have found that students at 2-year 
colleges in America, which now make up nearly half of all college kids 
today, often lack the know-how to direct their own progress. Further, 
their work revealed that although students ``are assumed to be capable 
of making informed choices, of knowing their abilities and preferences, 
of understanding the full range of college and career alternatives, and 
of weighing the costs and benefits associated with different college 
programs, our analyses show that many students have great difficulty 
with such choices.'' The fact that on average one college guidance 
counselor is matched with 700 students in this country doesn't help the 
situation.
    While public 2-year colleges design their programs and procedures 
based on faulty assumptions about the capability of their students to 
make informed choices, Rosenbaum found that their private counterparts 
often do not. According to him and his fellow researchers, many private 
2-year colleges--with identical student bodies containing large numbers 
of low-income and minority students who did poorly in high school--
shift academic planning responsibilities to themselves, ``devising 
procedures to help students succeed even if they lack the traditional 
social prerequisites of college.'' And it works: Rosenbaum found that 
the private 2-year schools in his study graduate significantly more 
students than their public peers.
    How do they do it? The private 2-year colleges in the study offered 
students ``package deal'' plans for accomplishing their specific 
academic and career goals in a clear length of time. Instead of 
charting their own paths by navigating daunting catalogs overflowing 
with choices, students make the ``big choice'' of a desired career or 
academic discipline and then the colleges make all of the ``little 
choices'' for them by utilizing structured programs that move students 
to degrees in the shortest time possible. (See Appendix A to review 
Rosenbaum's findings.)
    Before assuming that only private colleges can accomplish this, 
consider the tremendous success of the past twenty years at the public 
Tennessee Technology Centers. Part of the Tennessee Board of Regents 
system, the statewide Technology Centers have been regularly 
accomplishing graduation rates of 75% or higher and job placement rates 
above 85%.
    Their approach shares many common elements with private schools: 
Students sign up for whole programs, not individual courses. They are 
clearly told how long the program will take to complete, the likelihood 
of success, and the total ``all in'' costs. There are plenty of ``big 
choices,'' but the ``small choices'' are directed, streamlined and 
packaged to cut down on confusion and the chance of mistake.
    So, this isn't about public versus private 2-year schools. It's 
about divining an uncharted course through a catalog of undirected 
choices on one's own versus fully informed choices with clear 
expectations and benefits.
    Nor is it just about college students--it's about what the 
abundance of choice does to the human brain. In one famous study, 
subjects became nearly paralyzed when presented with 24 choices of 
fruit jams. While 60% helped themselves to samples, only 3% could ever 
decide which jam to buy. By reducing the choices to just 6, researchers 
observed that nearly a third of the 40% who sampled the jams made a 
purchase. Whether choosing jams, bath soaps, investment plans, or 
college courses, directed choice can be a great benefit to consumers.
    As important as direction, the best choices are those most closely 
aligned with intentions: Students come to college in pursuit of better 
lives, higher-paying jobs and clearer paths to accomplish their goals. 
They simply seek the fastest, most affordable route to do so--and most 
don't enjoy the luxuries of endless time and resources to get there.

Add Structure to Achieve the Full Potential of Reforms
    By choosing to think differently about choice, colleges can meet 
the needs of more of today's students and share in the success that 
comes with more graduates. But, combining directed choice with new 
structures for academic delivery unleashes the full potential of 
reforms to boost college completions.
    To understand why, return again to what it's all supposed to be 
about: students. It's clear that too many students work too many hours. 
That's unlikely to change unless college suddenly becomes a lot more 
affordable.
    So, let's consider again the lives of young adults who try to keep 
it all going. At almost all colleges, courses are scheduled all over 
the weekly calendar. In a student-centered culture, would programs be 
designed that required an 8:00 a.m. class on Monday, a 2:00 p.m. class 
on Tuesday, 11:00 a.m. on Wednesday, etc.? Of course not.
    Instead, what if programs were designed utilizing more structured 
scheduling? Students could attend classes every day, five days a week, 
from 8:00 a.m. to noon or from 1:00 until 5:00 p.m. Full-time 
attendance would now be possible for many more, dramatically shortening 
the time it takes to graduate. And finding time for jobs in such a 
predictable daily routine is no longer a challenge.
    When presented with this concept, students are incredulous. ``That 
would be a dream come true,'' they have told us. Here again, the dream 
is actually a tried-and-true reality.
    Not only do the hugely successful Tennessee Technology Centers help 
direct student choices, they also structure academic delivery in just 
this way. Three-quarters or more of their students earn career 
certificates in twelve to eighteen months going full-time, five days a 
week, from 8:00 until 2:00. Every year over 12,000 students move 
through the multiple Technology Center campuses and nearly all of them 
head straight into jobs.
    Structure also produces some added bonuses that should not be 
overlooked. Compressed class schedules create stronger linkages between 
faculty members--and cohort-like connections between students. 
Professors not only interact more often, they also tend to create team 
approaches to teaching the students they share. And students often move 
through programs as a group, strengthening their ties and support of 
one another.
    But, structured scheduling only works for vocational education and 
career certificate programs, right? Wrong. The City University of New 
York (CUNY) has a program (ASAP) for accelerated completion of 
associate degrees that is so successful the system will soon open an 
entire campus designed to utilize block scheduling, student cohorts, 
directed choice, embedded remediation and reinvented supports. Why make 
this kind of significant investment in the midst of a budget crisis? 
Because it works so well: ASAP students graduate on-time at more than 
twice the rate of their peers.
    Time, choice and structure: to significantly boost college 
completions, turn the broken dreams of dropouts into the bright futures 
of graduates, fully seize the opportunities for our country that 
overflowing campuses provide, and make America the world leader again 
in college attainment, we must keep our collective focus on these three 
touchstones. They are universal truths arrived at in the best way: by 
seeing the true nature of our college students today--and opening our 
minds to accept that to help them succeed--a success that America is 
counting on--we must reinvent American higher education.
States Must Lead the Way
    The stakes are high. That's why we must recognize that higher 
education institutions themselves are not the only players. One key 
participant that has too long been on the sideline of higher education 
reform is state government.
    Given that our country has suffered these low graduation rates for 
a generation or more, it is clear that--in spite of our best 
intentions--doing more of the same will just get us more of the same. 
Higher education now must have the committed and shared partnership of 
all key stakeholders. America--now 12th in the world in college 
attainment and falling--does not have the luxury of time to wait. 
States must step forward and help lead the way.
    There are many compelling reasons for governors, state legislatures 
and higher education system leaders to assume leadership on this 
agenda:
             State Authority
    While state-appointed or elected citizen boards directly govern 
public institutions, ultimately states are responsible for all public 
colleges and universities. State goals and state leadership created 
college systems and expanded open access four-year institutions over 
the past 50 years; state leadership and support will be necessary to 
enhance and sustain their effectiveness in improving college completion 
in the 21enhance and sustain their effectiveness in improving college 
completion in the 21enhance and sustain their effectiveness in 
improving college completion in the 21
             Majority Investor
    By a wide measure, state taxpayers provide the greatest funding for 
institutions, especially community colleges and open access four-year 
institutions. No other stakeholder is better positioned than state 
governments to ensure that public investments are wisely utilized to 
maximize opportunities for the future economic success of their states.
             Systemic, Scalable Change
    States are the best positioned to ensure reform across systems and 
campuses by setting goals, establishing uniform measures, and 
monitoring progress. They can also serve as the most efficient 
clearinghouses of best practices, allowing for rapid scaling of 
successful reforms.
             Accountability
    With so much at stake economically, states must hold themselves, 
students, and institutions accountable for success. States have 
leverage over both governance and the funding mechanisms needed to 
achieve higher levels of completion.
             Transparency
    Institutions have strong incentives to shape reporting to mask 
failure and avoid confronting problems. States are much more likely 
than individual institutions to share and publish data to drive reform.
             Economic Development
    Higher education attainment is inextricably linked to future 
economic success. State leadership will ensure stronger linkages 
between each state's economic needs and higher education delivery.
             Mobility of Students
    Today's students move across campuses and systems to attain 
credentials. Coherent state policy and integrated state strategies are 
essential for assuring ease of transfer and efficient completion of 
academic programs.
States in Action: Complete College America's Alliance of States
    When it comes to state leadership, there is great reason for 
optimism. Today, more than half of the states have joined Complete 
College America's Alliance of States. To do so, Governors and their 
higher education leadership had to make four key commitments:
    1. Establish statewide and campus-level college completion goals,
    2. Adopt the NGA/Complete College America Common Completion Metrics 
in order to measure progress and hold institutions accountable for 
results (see Appendix B),
    3. Create comprehensive statewide and campus-level college 
completion plans, and
    4. Move significant legislation and policies to remove unnecessary 
obstacles and speed student success.
    As of this writing, 30 states have made these commitments and are 
now working as members of the Alliance of States to design and 
implement strategies that will significantly boost the number of their 
citizens with college degrees or other credentials of value.

Essential Steps for States
    Complete College America recommends several significant policy 
levers that states can utilize to enhance the likelihood of student 
success and college completion, including shifting to performance 
funding, reducing time-to-degree, transforming remediation, 
restructuring academic delivery, and making career certificates count, 
among others. Please see Complete College America's Essential Steps for 
States documents for more specifics on what states can do today 
(Appendix C).

Actions Congress Can Take Now
    1. Restructure federal investments in higher education to reward 
states and institutions that implement new strategies and structures to 
significantly boost college completion, including measures to shorten 
time-to-degree. As an example, the Community College and Career 
Training Grants program should incent states with unified community 
college systems and/or community college consortia to restructure 
delivery to help working students. As shown above, proven models exist 
that can be replicated and scaled by states and consortia.
    2. Embed robust progress and completion metrics in all federal 
higher education policies and statutes. The NGA/CCA Common College 
Completion Metrics can serve as a strong starting point. These 
comprehensive metrics allow for accurate state-by-state and 
institutional comparisons and fill in yawning gaps in current data 
collection, enhancing opportunities for accountability and empowering 
all stakeholders with new tools to inform reform design.

Conclusion
    Commitments like those made by our Alliance States give us great 
reason for optimism--and a clear path forward. With a little more 
help--and a lot of common sense--students, their families, taxpayers, 
and all Americans will share in the benefits of more individuals 
completing college.
    Complete College America applauds the President and Congress for 
efforts to make America first in the world again in college completion. 
And we stand ready to assist in efforts to reinvent higher education to 
meet the needs of the new emerging American majority of college 
students. Thank you for this opportunity to be of assistance in this 
vital effort.
                                 ______
                                 
    Chairwoman Foxx. Thank you very much.
    I would now like to recognize Dr. May for 5 minutes.

   STATEMENT OF JOE MAY, PRESIDENT, LOUISIANA COMMUNITY AND 
                    TECHNICAL COLLEGE SYSTEM

    Mr. May. Thank you, Madam Chair, Ranking Member Hinojosa, 
and members of the committee. I am honored to be with you today 
and to represent not only the State of Louisiana and our 
community and technical colleges but also community colleges 
across the nation. The Louisiana Community and Technical 
College System is comprised of 14 colleges, which last year 
served 111,000 students.
    As well as being the President of the Louisiana Community 
and Technical College System, I also am President and represent 
a new group, an organization called Rebuilding America's Middle 
Class, which represents about 100 institutions across the 
country that have joined together to ensure that federal 
policies support the ability of individuals to acquire the 
skills needed for today's jobs.
    More than ever, as was said in opening testimony, the road 
to economic security runs through higher education and through 
specifically community and technical colleges. Over the last 5 
years, Louisiana, like most of the nation, has seen reduced 
State funding and yet increased interest. In fact, our 
enrollment has grown by 55 percent, while we have seen 
decreased State support of almost 37 percent during that same 
period of time. And while the changing funding model creates 
challenges, I believe it is in times like this that community 
and technical colleges shine.
    In Louisiana, through merging colleges, eliminating 
redundant programs, aligning programs with market demand, 
consolidating information technology systems, sharing backroom 
operations like payroll and auditing services, we are saving 
almost $30 million a year that we are applying to meet 
students' needs as compared to 4\1/2\ years ago.
    One of the greatest opportunities for keeping costs low is 
to encourage more students to begin their postsecondary career 
at a community or technical college. Because our colleges are 
close to where students live and work, they are lower cost and 
offer high quality programs, they are an outstanding value for 
students planning to transfer to a university and earn a 
baccalaureate degree.
    While this has been an obvious benefit of attending 
community colleges, for many students the transfer process 
itself has been a nightmare. In fact, in Louisiana, in the past 
if a student earned an associate's degree at a community 
college and transferred to a public university, the student 
would on average lose between 21 and 24 semester credit hours.
    The solution to this problem was clear: develop a statewide 
transfer agreement to ensure that students can transfer without 
losing credit, regardless of which institution they choose to 
attend.
    Today, students can enroll at any community college in 
Louisiana, earn the Louisiana transfer degree, either an 
associates of art or associates of science degree, and transfer 
to LSU or any of the 14 State universities with junior status. 
Thus, for the first time in the history of our State, 2-year 
college advisers can actually encourage students to earn the 
associates degree.
    Prior to this legislation, advisers knew that if the 
student earned the associates degree that he or she would take 
more hours than needed and spend more money than was necessary. 
Prior to this legislation, students were spending about $2,100 
more in terms of the amount of money they needed to spend and 
the State of Louisiana was spending about $1,900 more per 
student. In addition, the Pell program was spending about 
$2,750 more per student than was necessary. It is estimated 
that, on average, students would save over $10,000 of the cost 
of a bachelor's degree by starting at a community or technical 
college and then transferring with the associate degree into a 
4-year college or university.
    As we streamlined the process, we also realized that one of 
the barriers, and it has been mentioned earlier, was the fact 
that we had seen the credit hour creep. Many of our programs 
associate degrees had gotten as high as 75 hours required to 
earn the associates degree. In 2010 we capped that at 60 hours, 
went back and reviewed programs, both to reduce time to degree 
and to save students dollars. On average, we have seen a $1,100 
reduction in terms of the amount of money that students spend 
and about $792 per student in terms of what the State is 
spending.
    As both the President of the Louisiana Community and 
Technical College System and the President of Rebuilding 
America's Middle Class, I have learned the importance of policy 
on impacting the ability of colleges to respond to business and 
industry to meet the needs of students and to rebuild America's 
middle class. In Louisiana, we have been successful in growing 
enrollment while reducing costs, improving services and 
enhancing quality and guaranteeing that we are relevant to the 
needs of today's students, business and industry and our 
communities.
    Thank you for the opportunity to share this important story 
today, and I welcome your questions.
    [The statement of Mr. May follows:]

            Prepared Statement of Dr. Joe D. May, President,
            Louisiana Community and Technical College System

    Thank you, Madam Chair, Ranking Member Hinojosa, and members of the 
Committee.
    I am honored to be with you today.
    My name is Joe May and I am the President of the Louisiana 
Community and Technical College System.
    On behalf of the great state of Louisiana and Louisiana's community 
and technical colleges, I want to thank you and the members of the Sub-
committee on Education and Workforce Training for inviting me to be 
part of these important deliberations.
    The Louisiana Community and Technical College System is comprised 
of 14 colleges which last year served 111,000 unduplicated students.
    Of these 14 colleges, seven have been recognized as among the 
nation's fastest growing colleges when ranked among colleges of the 
same size.
    Along with being President of the Louisiana Community & Technical 
Colleges, I am the president of a new organization called Rebuilding 
America's Middle Class (RAMC).
    Our almost 100 members are a group of community and technical 
colleges that have joined together to insure that federal policies 
support, rather than hinder, the ability of individuals to acquire the 
skills needed for today's jobs.
    Our economy is in trouble. When our economy is in trouble, 
individuals and families struggle to find good jobs.
    More than ever, the road to economic security runs through higher 
education and specifically community and technical colleges.
    The fear of skyrocketing college costs has put the dream of a 
middle-class lifestyle out of reach for many Americans.
    Yet, community colleges are the low cost, high value educational 
providers that respond to market demands.
    The average annual cost per year to attend a community college is 
just under $3,000 compared to over $8,000 for the average price of 
annual in-state tuition at a four-year public college.
    Author Jim Clifton points out in his book, ``The Coming Jobs War,'' 
that today's global economy is engaged in a war for jobs.
    As pointed out by the McKinsey publication of a few years ago, 
employers are also engaged in a ``war for talent.''
    The war for jobs and the war for talent are symptoms of the same 
problem.
    As a country, we must do more to align postsecondary programs with 
the needs of business and industry to enable them to be successful and 
to equip individuals for good paying jobs.
    It is clear that while employers are fighting for the top talent in 
terms of knowledge, skills, and abilities in order to remain 
competitive in today's economy, individuals badly want those jobs.
    Community colleges are the key to bridging this knowledge gap 
between employers and individuals.
    Bringing together employers and individuals has been the story of 
the Louisiana Community and Technical College System.
    Yet like most of the nation, funding at Louisiana's community 
colleges and technical colleges has not kept pace with enrollment 
growth.
    Over the past five and a half years, Louisiana's community and 
technical college enrollment has grown by 55% while our state support 
has decreased by 37%.
    While the changing funding model creates great challenges, I 
believe that it is in times like this that community and technical 
colleges shine.
    As institutions, we are problem solvers that find ways to be more 
efficient while serving more students and meeting the needs of business 
and industry.
    Our colleges are driven to adapt to changing economic realities 
because we understand that the stakes have never been higher.
    In Louisiana, through merging colleges, eliminating redundant 
programs, aligning programs with market demands, consolidating 
information technology systems, and sharing backroom operations such as 
payroll and auditing services, we are saving almost $30 million 
annually.
    Enrolling almost half of the nation's undergraduate enrollment, 
community and technical colleges have become the front line for 
improving student access and student success.
    Perhaps most importantly, our colleges are the conduit by which 
employers secure the talent they need and help students get the jobs 
they desire.
    Louisiana's community and technical colleges are proud to say:
    Our colleges have no needs * * *
    We quickly point out that it is people, who have needs,
    Employers have needs,
    Communities have needs * * *
    Our colleges must use all of our resources to provide the solutions 
to meet the needs of people, employers and communities.

Transfer Policies
    In Louisiana, we have worked hard to help students achieve their 
goals and objectives, ensuring that employers find the talent they 
need, while at the same time driving costs down.
    One of the greatest opportunities for keeping cost low is to 
encourage more students to begin their postsecondary career at a 
community or technical college.
    Because our colleges are close to where students live and work, are 
lower cost, and offer high quality programs, they are an outstanding 
value for students planning to transfer to a university and earn a 
baccalaureate degree.
    While this has been an obvious benefit of attending community and 
technical colleges, for many students, the transfer process has been a 
nightmare.
    In fact, in Louisiana, if a student earned an associate's degree at 
a community college and transferred to a public university, the student 
would, on average lose between 21 and 24 semester credit hours in 
transfer.
    The solution to this problem was clear: develop a state-wide 
transfer agreement to ensure that students can transfer without losing 
credit hours regardless of which university they chose to attend.
    When the Louisiana legislature debated our transfer policy, it was 
supported by not only two-year colleges but university faculty as well.
    Referencing the transfer policy in testimony before the Louisiana 
Senate, Louisiana State University Faculty Senate President, Kevin Cope 
stated, ``I urge everyone to think long and deeply about this system 
and how it will impact the educated person. I believe that with this 
legislation we finally have the chance to get it right.''
    Today, students can enroll at any community college in Louisiana, 
earn the Louisiana Transfer Degree--either an Associate's of Arts 
degree or an Associate's of Science degree and transfer to LSU or any 
of the state's 14 universities with junior status.
    Thus, for the first time in the history of our state, two-year 
college advisors can actually encourage students desiring to transfer 
to complete the associate's degree.
    Prior to this legislation, advisors knew that if the student earned 
the associate's degree that he or she would take more hours than needed 
and spend more dollars than necessary.
    As the result of this initiative, the average student saves $2,117 
while the state of Louisiana saves $1,930 per transfer student.
    In addition, this means that $ 2,750 less Pell funds are needed by 
students who transfer to a university having already earned an 
associate's degree.
    It is estimated that, on average, students would save over $10,000 
of the cost of a Bachelor's of Arts by starting their college careers 
at a community college and transferring their credits seamlessly to a 
four-year school.

Establishing a General Education Common Core
    The legislation didn't stop with policies related to student 
transfers, it also allowed for the development of a common general 
education core of 39 semester credit hours.
    These courses would be the same regardless of the institution 
attended and would be guaranteed to transfer to all public institutions 
in Louisiana.

Capping Associate Degree Programs
    As we streamlined the process for students, we realized that one of 
the transfer barriers was inconsistency with the number of hours needed 
to earn an associate's degree.
    Over time, many of our programs had grown from the standard 60 
semester credit hours to as many as 75.
    This sort of credit hour creep had to be changed.
    Therefore, in 2010 the Louisiana Legislature passed a bill that 
limited all but selective associate's degrees to 60 semester credit 
hours.
    Reducing the number of credit hours results in a reduction in cost 
of approximately $1,100 to the student and their family. The state of 
Louisiana additionally saves $792 per student and most importantly, it 
reduces time to degree.

Accountability, Retention, and Graduation Rates
    We also support legislation in Louisiana that holds colleges 
accountable for retention and graduation rates as part of the higher 
education funding formula, which ensures that students are getting more 
value for their dollar.

Common Course Numbering
    Another important policy measure passed in the 2012 legislative 
session was a bill to require common course numbering at all 2-year and 
4-year colleges.
    This means that English 101 at any community college is the same 
English 101 at LSU or any other 4-year college in the state, ensuring 
that the course will transfer no matter when or where it was taken, 
which has not always been the case.

Conclusion
    In closing, I want to mention that the Louisiana Community and 
Technical College provides something we call the Day One Guarantee.
    Our colleges guarantee that a graduate of any of our certificate or 
associate degree programs will have the knowledge, skills, and 
abilities expected by employers on day one or we will retrain them for 
free.
    This is about guaranteeing quality and market relevance to our 
graduates and our employers.
    This guarantee is posted in every college and listed in every 
college catalog and we stand behind it.
    Our goal is to ensure that both students and employers know that 
there is guaranteed value in every educational dollar they spend.
    As both the President of the Louisiana Community and Technical 
College System, and the President of Rebuilding America's Middle Class, 
I have learned the importance of policy in impacting the ability of 
colleges to respond to business and industry, to meet the needs of 
students, and to rebuild America's middle class.
    In Louisiana, we have been successful in growing enrollment while 
reducing costs, improving services, enhancing quality, and guaranteeing 
relevancy.
    Thank you for the opportunity to share this important story today.
    I welcome your questions.
                                 ______
                                 
    Chairwoman Foxx. Thank you very much, Dr. May.
    Thank you all very much for staying within our time 
constraints and presenting very cogent testimony to all of us. 
I am very grateful to you.
    I am going to ask a couple of questions, and then I am 
going to list some questions that I am not going to ask you to 
answer today. And I know we can do this in the record without 
my saying them, but I want to put some issues out there for 
everybody to hear, not just to send them to you to answer. So I 
will do that and probably not use all of my time so that I can 
move on to some of my colleagues. But I did want to get a 
couple of things out.
    I would like to ask Dr. May and then Ms. Lubbers and Mr. 
Pattison, if you know this from either your experience in 
Virginia or general knowledge, how much does it cost in your 
State, Dr. May, Ms. Lubbers and Mr. Pattison, if you know, how 
much does it cost to fund a student's degree? How much is your 
State spending?
    If you don't know that, then we can get that answer from 
you later.
    Dr. May?
    Mr. May. In terms of the funding from the State and the 
cost to students to earn a 60-semester-hour associate degree, 
it is going to cost a little over roughly $5,500, $5,600 for 
tuition fees and State costs, not counting books and fees, our 
books, which would be in addition to that. So around $5,500.
    Chairwoman Foxx. That is what the student would pay?
    Mr. May. Yes, the student would pay about $5,500, and the 
State would pay roughly an equal amount to that. So the total 
cost of that would be about $10,000.
    Chairwoman Foxx. Okay. I thought your number was a little 
low.
    Ms. Lubbers?
    Ms. Lubbers. Our State operating per FTE is about $4,900; 
and the students are paying, depending on whether they are 
going to a community college or they are going to a 4-year 
institution, somewhere between a little over $4,100 for the 2-
year college and more like $7,200 to $7,400 for the 4-year 
institution. So the State's commitment, which is down for FTE 
by about 16 percent over the last 3 years, is right at around 
$4,900.
    Chairwoman Foxx. Mr. Pattison?
    Mr. Pattison. I unfortunately don't recall off the top of 
my head for Virginia. But I will say what is very interesting 
and I think a very important point is it does vary quite 
tremendously by State, and that brings up another issue as to 
why costs are so different, depending on the State.
    Chairwoman Foxx. Okay. Thanks.
    And, again, I will ask Dr. May and Ms. Lubbers this 
question, and if you would answer it as succinctly as you can: 
What led each of your States to recognize that you had a 
problem in making college affordable for students? What was the 
awakening in the State?
    Mr. May. I think the awakening really came from the 
employers in the State. We saw two issues that were taking 
place. On the one hand, our companies were looking for talent 
to meet their needs and stay viable as organizations. On the 
other hand, we have seen the highest unemployment rate in a 
generation occur. So you have companies wanting to hire people 
but couldn't find them, and individuals needing jobs who 
weren't getting those jobs.
    So what we began to look very closely at, how do we get 
more people in the door, recognizing that there are budget 
constraints that are out there. So we began to look at wastes 
to reduce costs to students so that even in tight budgets we 
could expand services. And, in fact, we have done that, having 
grown 55 percent in enrollment during the very time that we 
have seen funding reduced at the State level.
    Chairwoman Foxx. Ms. Lubbers.
    Ms. Lubbers. Certainly Indiana, like most States and more 
than most States, needs to look at this from the standpoint of 
the job opportunities we have and the workforce preparation. 
But I think the one factor that probably has directed this more 
than anything else has been the 100 percent increase in tuition 
over this period of time.
    Chairwoman Foxx. Great. Thank you.
    Let me throw out again some questions that we will ask you 
in a more formal way. One is, do you believe higher education 
is subject to the whims of the economy more than other areas of 
State budgets? In what ways do you anticipate the structure of 
State funding for higher education to evolve over the next 10 
years? Mr. Pattison, that is a particularly good question for 
you.
    And I think another question, to build on what Ms. Lubbers 
just said, why has the cost of acquiring a degree outpaced 
State funding increases so dramatically?
    And another question again for Ms. Lubbers and Dr. May, did 
you encounter pushback from institutions when the State began 
to discuss higher education reforms, how did you appease the 
concerns of the faculty, and what benefits have students and 
institutions realized since enacting the reforms put forward by 
the State?
    I think we have sort of glossed over in some ways the 
institutional resistance to the changes that have to occur in 
higher education. We haven't really focused on those very much 
as we deal with this issue.
    But thank you all very much.
    I would now like to recognize Mr. Hinojosa for his 
questions.
    Mr. Hinojosa. Thank you.
    Mr. Jones, President Obama has set a national goal that the 
United States will lead the world in proportion of college 
graduates by the year 2020. Will you elaborate on the 
importance of this goal, both in terms of individual prosperity 
as well as our nation's ability to compete in this 21st century 
global economy?
    Mr. Jones. Well, first of all, I think it is aspirational 
in the sense that we used to talk about that it was good enough 
to get an eighth grade education, and then we focused on it was 
important for everybody to get a high school education. And so 
clearly this is generational. It is aspirational, the 
recognition that more students need to go to college, that that 
is the remaining pathway to prosperity as many of the good 
factory jobs just aren't there anymore.
    There also have been a lot of economic reports out, one 
from the Georgetown Center on Education and the Economy, that 
clearly points to the fact that 60 percent of our workforce is 
going to need credentials of value, 2-year degrees, 4-year 
degrees, 1-year certificates. So there is both an economic 
imperative, nationally, internationally, as well as a 
generational imperative to do this.
    I do want to clarify, because this is an issue that comes 
up all the time, when we say not everybody should go to 
college, I think all of us here would define ``college'' as 
being, broadly defined, not only 4-year bachelor's degrees but 
2-year associate's degrees, 1-year certificates. Many of the 
vocational programs one might think about in terms of 
electrical work or plumbing, all those students go to college. 
So we think of it as broadly and not simply as getting a 4-year 
degree.
    Mr. Hinojosa. Tell me, in my home State of Texas, Latino, 
African American, Asian American, and Native American students 
already make up the majority of the students enrolled in many 
of our colleges and universities. Can you highlight what States 
are doing to ensure that these students are part of the 
President's college completion goal?
    Mr. Jones. I think, as I said, this country, ever since the 
GI Bill, higher education has been about access. That has been 
the DNA of higher education. And we have record breaking 
enrollment in this very difficult time because people have 
decided the pathway to a better job is education. And the 
freshman class has more, across this country, more Hispanics, 
more African Americans, than ever before.
    But if you look at the graduating class, a lot of the 
Latinos, a lot of the African Americans that we worked so hard 
to get into college, they are not there, a lot of the first-
generation students. So we are winning the access battle. We 
are losing, not only in the State of Texas but across this 
country, the success rate for these students.
    Mr. Hinojosa. But tell me, when are the governors and all 
of the stakeholders going to believe that investing early in 
reading and writing so that children can have a good 
understanding of what they read, a good vocabulary so they can 
express themselves? Why isn't there more being done and why 
aren't the Governors pushing for that? If we know that half of 
our students are not graduating, even though the enrollment is 
so high, we have a void that has to be filled, and that is 
getting children to start reading when they are 1-year-old, 2, 
3, and 4-year-olds.
    Commissioner Lubbers, Indiana's 21st Century Scholars 
Program has been cited as a model for State College aid 
programs, promising scholarships to free-and-reduced priced 
lunch students in middle school if they graduate from high 
school and maintain good grades and stay out of trouble. So, as 
Indiana is reducing the State appropriations for this 21st 
Century Scholars Program, administrative costs and 
scholarships, what is the expected impact on recruiting and 
enrolling low-income students into the program?
    Ms. Lubbers. Well, the good news is that financial aid is 
actually increasing in Indiana, including funding for the 21st 
Century Scholars Program, which is a nationally respected 
program and one which we want to preserve. We believe it is an 
aspirational preparation scholarship program for students. It 
has a huge increase in the number of students who are signing 
up and going to college. Actually, the college-going population 
for the 21st Century Scholars is the highest college-going 
population of any right now.
    Like the discussion preceding my comments, we are not 
getting them to complete at the level we need to, so we are 
really focused on interventions for their success. It is an 
entitlement program. If they meet their needs, we try to meet 
the State's obligation to them. But, not surprisingly, our 
financial aid, like every other part of the State's budget, has 
suffered some, in this case primarily because we have more 
people going to college.
    We have put $23 million more into financial aid when we 
couldn't put money into anything else, but the number of people 
who are showing up at our doors meant that the size of some of 
our grants was actually going down. But our commitment to the 
21st Century Scholars and those mostly first-generation 
college-going students is strong and will remain strong.
    Mr. Hinojosa. The Pew Foundation report says that 
enrollment in colleges went up 28 percent for minority 
students, but I say that we still are not doing a good job in 
pre-kindergarten and getting them ready to be able to handle 
the assignments and the work that is expected at the college 
level.
    Chairwoman Foxx. The gentleman's time has expired.
    I would like to recognize Dr. Roe for 5 minutes.
    Mr. Roe. I thank the chairwoman for recognizing me; and, 
first, I want to welcome the students. I see a lot of students 
out here. And really this is about them. In not so many years 
you are going to be sitting where we are. One of my major 
concerns I had, I only have been here 3\1/2\ years in Congress, 
but was the affordability of a college education, and let me 
sort of explain why that is.
    My father was a factory worker, and I was able to graduate 
from college, stayed at home, worked my way through school, and 
ended up graduating from college with no debt. I then went to 
medical school in 3 years. So I know an accelerated program can 
work, because I have been through it. And I graduated from 
medical school with no debt. And one of the colleges I applied 
to, the tuition was more than my father made in a year, so I 
clearly wasn't going to go there.
    We didn't have access to loans that are available now that 
I think put a lot of students in horrific debt. And it is not 
unusual to see a student graduate from college--and I get 
letters all the time in my office, ``Dr. Roe, I have got 
$75,000 in student debt.'' Well, one of my good friends, my 
son's best friends, has $300,000 in student debts after 
graduating from law school. So it is a huge problem.
    On my walk down here today, I saw people lined up around 
Financial Services getting ready to go in there. And if we 
don't get this right where you can educate people at a 
reasonable cost, the rest of that stuff is not going to matter.
    I have heard a lot of good ideas, and Mr. Jones pointed out 
something I thought was very important, is the price of 
failure. That is huge in this country, when we fail and don't 
graduate our students. And really the future of our country 
relies on us educating our people where it is still affordable.
    So I think the things we are doing in Tennessee--and I want 
to bring this up just a little bit--is to use our technology 
centers. We have 27 technology centers in Tennessee where you 
can get technology training. The community colleges, Dr. May, 
you make a great point, and a lot of students are now taking 
advantage of a much lower cost community college and then going 
to the 4-year college and graduating.
    I think the other thing that I think Ms. Lubbers brought 
out--and I want her to talk about this a little more--is the 
education of students, where I know what I can do with my 
degree when I graduate. And it is not just getting a degree, 
but then can I extrapolate this degree into meaningful 
employment. And the meaningful employment numbers I have seen 
are, if you graduate from high school, it is worth a half 
million dollars more in your lifetime in income; if you 
graduate college, it is at least a million dollars more; and if 
you have an advanced degree, it is even an exponential number 
of that.
    So, Ms. Lubbers, I want you to again go over those things 
in Indiana, because I think our State is doing some of the same 
things.
    Ms. Lubbers. Thank you.
    I know one of the things that we are doing, as you are 
doing in Tennessee as well, is performance funding and paying 
for what we value at an increasingly higher level. So if we 
believe that failure is a problem, then we should incent 
completion, and that is one of the things that we incent. If we 
believe that you can save money by graduating on time, then we 
look at funding on-time graduation at a higher level. So some 
of those things that we are doing from a policy standpoint.
    From a student or a family standpoint, when you talk about 
making decisions about going to college and making smart 
decisions, we think that it is important for students to be 
able to follow their dream and do those kinds of things in life 
that they want to do, but we think it is important that they 
understand the implication of the decisions they make and the 
likelihood of getting a job, how much debt they have actually 
incurred during that time, how long it will take them to pay 
that off.
    So that is why we are committed to really this return on 
investment report that will try to align college with the 
workforce, with employers. And the good news is we are doing 
that better now than ever before. We have the ability through 
technology to align the performance in school with the kinds of 
jobs that people get, and we are committed to doing that. So I 
think this return on investment issue is incredibly important 
so that people will make smarter decisions.
    Mr. Roe. I think one of things that I looked at--I talked 
to some folks in Tennessee last night. In 2001, the tuition at 
a 4-year college was $3,100. In 2010, it was $6,000. It doubled 
during that time. That is a lot of money. And 80 percent of the 
students that leave East Tennessee State University have an 
average debt of $21,000. And if you are a teacher, if you go 
into law enforcement as a police officer or whatever, at least 
in our area, that is a sizable chunk of change.
    And I don't want the students out there to think--I was 
highly motivated by the draft during the Vietnam War, so I want 
you to understand that that motivated me a lot to stay in 
college. It didn't work out for me. I ended up going anyway. 
But that was one of my motivations.
    The other thing we did was, and this was done when I was in 
college, if you took 12 hours or above, then it was a full 
load, and you could take whatever you wanted after that. So I 
graduated with extra hours, not because it cost me more but 
because there was an incentive for me to do that.
    Is there a way to look at that now, where if you take a 
full load, not charged by the credit hour, but this is a full 
load, if you take more than that it doesn't cost you any more 
money. Does anybody want to comment?
    Mr. Jones. Yes. More and more States--some States have had 
those policies, some institutions. But as we are thinking about 
getting students, you only have 12 hours to be a full-time 
student to get federal Pell grants, so that is kind of the 
default now. So we need to have people thinking about 15 hours. 
And so States are doing that, colleges are doing that in the 
same way.
    I did want to point out that your technology centers I 
think are an unwritten story. They have a 75 percent graduation 
rate and an 85 percent placement rate and compared to other 
similar programs that might only have a 15 or 20 percent. So 
your State is doing a lot both with Governor Bradesen and 
Governor Haslem.
    And the technology center model is highly effective. They 
go on block schedules, they go on cohorts, they take 
attendance, which I think is an underrated strategy, and it is 
really a model I think the rest of the country could look at.
    Mr. Roe. Thank you. I yield back.
    Chairwoman Foxx. Thank you, and thank you all for boosting 
Tennessee here.
    I do think that, particularly in Ms. Lubbers' response, it 
partly answers I believe Mr. Hinojosa's question about why 
can't we get more people to get students through. More pay 
performance perhaps in the States would help with helping 
students with graduation.
    I now would like to recognize Ranking Member Miller for--I 
recognize Mr. Bishop for 5 minutes.
    Mr. Bishop. Thank you very much, and I thank the ranking 
member for his indulgence.
    I want to just pick up on the point that Dr. Roe just made. 
I think it is one that we should look at very carefully, the 
choice between flat rate pricing and per credit pricing. I do 
think that there is an opportunity there to help students 
accelerate. The key would be to have the tipping point or the 
equity point for the flat rate pricing versus the per credit 
pricing to be relatively closer to the 12 credit number as the 
18 credit number, but I think a very good point.
    It seems to me that a theme that runs through all of your 
testimony is that we need to have two agendas. We need to have 
an access agenda, and we need to have a completion agenda. And 
right now what is facing students at the public level is per-
FTE funding that is lower than it has been an in a quarter of a 
century. I understand that you said the aggregate fund is 
higher, but that has I guess to do with the increased volume as 
opposed to per-FTE. Mr. Jones, you made comments in your 
testimony about the extent to which both full- and part-time 
students rely on at least part-time work, if not full-time 
work.
    One of the things I am very concerned about is here in 
Washington we are, in effect, moving in the opposite direction. 
Today, the Labor-H Appropriations Subcommittee is going to vote 
on the chairman's mark for appropriations for fiscal 2013, and 
that mark includes a reduction in the Pell Grant of 
approximately $800 per year. It is estimated that that 
reduction will render immediately approximately 400,000 
students ineligible for Pell, and every other--just the way 
Pell works, everybody else that gets a Pell will get a Pell 
that is $800 less than what they are getting now.
    So my question to each of you is, to what extent do you see 
that move on the part of the federal government impacting our 
shared concern for both an access agenda and a completion 
agenda?
    Mr. Jones, why don't we start with you?
    Mr. Jones. Right. And I am not knowledgeable enough to talk 
fully about the Pell Grant, except to say this: the Pell Grant 
and the student loan program, which serves even many, many more 
students, both are extremely important to the access agenda and 
have propelled the access agenda and made our freshman classes 
more diverse.
    But I will say, as you are thinking about reforms both in 
student loans and in Pell grants, is that you think about the 
progress students make toward completion. To the very point you 
made about an access agenda coupled with a success agenda, to 
the very point you made about if we can get students thinking 
about 15 or 16 credit hours a semester, progressing in a timely 
way. Not everybody is going to graduate on time, but more than 
a third of them could graduate on time.
    So I would like Congress to think about those kinds of 
progress measures as you are thinking about very, very precious 
resources that you are having to allocate.
    Mr. Bishop. I think you are absolutely right.
    I am going to let you all answer, but I just want to jump 
in. Given the extent to which now even full-time students 
depend on work, if we are reducing their Pell, is it reasonable 
to assume that their dependence on work will go up and 
therefore their time to degree will get longer? Is that a 
reasonable assumption?
    Mr. Jones. Yes. We put out a report last October called 
``Time is the Enemy.'' That was essentially the argument in our 
report, is that the longer it takes, the less likely it is 
students will graduate.
    Mr. Bishop. Thank you.
    Ms. Lubbers.
    Ms. Lubbers. Well, I would like to use this as an 
opportunity to put a plug in for something that I think you 
could help us with, which is the consideration of using Pell in 
the summer months. If we talk about trimesters at Purdue and we 
talk about accelerated programs, it only makes sense that we 
would actually be able to use Pell during the summer months. So 
whatever you do with the final amounts of money for Pell, to 
preclude people from using Pell in the summer is turning out to 
be very problematic in the States.
    Mr. Bishop. I am sure you know that we had year-round Pell 
in the last higher education reauthorization, but it became a 
casualty of our effort to keep the Pell Grant maximum at 
$5,550.
    Ms. Lubbers. I do understand. And I am just saying that as 
we look forward into the 21st century of how students are 
actually getting their education, one of the considerations 
that I think we should have is what that calendar actually 
looks like; and the old agrarian calendar is not the calendar 
in which students now go to school.
    Mr. Bishop. Let me just raise one last thing. I thought you 
made a wonderful point, Ms. Lubbers, about the tightrope 
basically between efforts to reduce costs and maintain quality. 
And if you--at the end of that tightrope is completion, and a 
lot of things that are related to completion cost money. And so 
how we work our way through this over the next, you know, 
several years is going to be a real challenge, I think, from a 
public policy perspective but also from an educational 
administrator and faculty and curriculum perspective. And I 
hope as we look to cut costs we don't lose sight of the fact 
that a lot of what we spend money on is integral to a student's 
ability to persist and succeed.
    Thank you all for the work you do on behalf of our 
students.
    I yield back.
    Chairwoman Foxx. Thank you, Mr. Bishop.
    I would like to point out that in the appropriations 
process this year the Pell Grants were level funded. There were 
no cuts made in Pell Grants.
    I would now like to recognize Dr. Bucshon for 5 minutes.
    Mr. Bucshon. Thank you, Madam Chairwoman.
    I want to put in a plug for Indiana since two of our people 
that are testifying today are either currently or previously 
involved in Indiana's higher education. We appreciate all of 
you being here today.
    I usually try to focus on what we can do on the front end 
on a lot of these problems, and I agree that we have maybe been 
a little bit of a victim of our success, of our goals of 
getting everyone into a 4-year college institution. And now, on 
the back end, we have a lot of students that have an education 
with degrees that don't produce jobs. Nothing against those at 
all. But these students now have a lot of debt, and they don't 
have any access to the job market because what they are 
educated in may or may not produce a degree that allows them to 
be employed.
    And as a parent of four children--I have one son who just 
finished his freshman year in college, another getting ready to 
go. And coming from a family kind of like Dr. Roe's, who my dad 
was a coal miner and my mom was a nurse and I am the first 
graduate of a 4-year school from my family, I understand the 
importance of parental expectations. And let me tell you, my 
dad said, you have 4 years to graduate, and he meant it. And I 
do think to a certain extent that, as a society, we have 
lessened our expectations of our citizens in that respect.
    And similar to health care where, unless we get people to 
take personal responsibility for their own actions related to 
their health care, education is very similar. Unless we get 
students and parents to take some responsibility as part of 
this overall problem that we have, it is going to be difficult 
to solve it.
    And so, Ms. Lubbers, I will ask you. I mean, how can you 
interact with people at the grade school level and the high 
school level to help us educate our students and, probably more 
importantly, our parents about what the expectations will be of 
their students when they get to college?
    My wife and I are college graduates, so we know what the 
expectations are. But I think a lot of students going to 
college not really understanding what the expectations are, how 
simple stuff like if you only take 12-hour credit hours for a 
semester it is going to extend your college unless you take 18 
in another one.
    So the first question is to Ms. Lubbers. In grade school 
and high school, can we help?
    Ms. Lubbers. Well, we are trying to make certain in Indiana 
that people understand the relationship between K-12, higher 
education, workforce development is very inextricably linked. 
And so we work together. We have an organization in Indiana 
called Learn More Indiana, which is basically focused on 
working with schools to make sure that students understand at 
an early age what it takes to be ready to go to college both 
academically and financially. And you can't start too early in 
doing that. So we reach all the way down to the grade school in 
trying to do that, to make sure that people are starting to 
prepare, on both of those levels, academically and financially 
prepared to go.
    This return on investment report that I mentioned I think 
it is going to be very important, too, to make sure that we can 
crosswalk the kind of degrees that you get with the workforce 
opportunities that exist in Indiana. So it is really by working 
together. We have the good fortune in Indiana of having our 
superintendent of public instruction, as commissioner myself, 
our teachers, our higher education institutions, we are sort of 
committed to the same final product at the end, which is the 
success of the individual, and we can't have failure anywhere 
along the way.
    So as was mentioned earlier, you know, reading early in 
life, that that is critically important. You can connect those 
who don't read to those who don't go to college, and certainly 
we have to do a better job with that. But there is no one 
answer, but starting early and being consistent in a message of 
being academically and financially prepared is important.
    Mr. Bucshon. I think it is so important that parents 
understand, understand that. I mean, I know what the 
expectations are for my kids and my dad did for me, and that 
makes a big difference.
    I guess the second question along that line is, once 
students are in college, I have found--my son is 19 and so 
there are a lot of privacy issues with access to his academic 
record and his progress in school. Believe it or not, we have 
to get his permission to see his grades and other things like 
that. And I am not sure I have a problem with that necessarily. 
However, since we are footing the bill, you know I guess you 
could say, well, if you don't show us, we don't pay.
    But my point is, are we doing a good enough job once 
students are in college in advising them about, you know, about 
not only just the credit hours but the financial impact of not 
taking the right courses and how that will have an effect on 
you financially. Because students can understand, if I don't do 
this, it may take me 5 or 6 years to graduate. But unless you 
really put a dollar amount on it, I don't know if that works. 
Can we do that? Can we bring that into it?
    Anyone want to comment on that?
    Dr. May? I think my time has expired, so real briefly.
    Mr. May. You know, to comment on that, I think sometimes we 
forget that people are in college for a reason today in the 
United States. Most people are there because they want a job 
and, at the end of it, they want to go to work.
    And I think sometimes we confuse the means with the end and 
that a college education is a means to get there to improve the 
individual, to improve society, and to grow the economy. And I 
think sometimes we just talk about that as the end goal when in 
reality people want more out of--they want more for themselves, 
more for the community, and more for the nation as a whole. And 
sometimes I think the numbers we talk about in terms of cost 
don't tie directly to the salaries, the jobs, and--that they 
will be making as individuals.
    Chairwoman Foxx. Thank you, Dr. May. And I want to thank 
you particularly for pointing out that even people in 4-year 
schools are striving to get a job. Too often--I think Mr. Jones 
mentioned this--that there is a perception that there is 
something called vocational education that is aside from 4-year 
schools. That is not true. Everybody is in college pretty much 
to get a degree. Yes, they want more, but I mean to get a job. 
They want to get a job whether they are in a 4-year school or a 
2-year school or a certificate program.
    Mr. Miller.
    Mr. Miller. Thank you very much, Madam Chairman, for 
holding this hearing. I think this is one of the most important 
hearings we have had on the issue of the cost of college, and I 
want to thank the panel because I think you have brought a 
number of recommendations and accomplishments that greatly 
enrich this conversation in the Congress.
    This committee has been interested in this problem for a 
long time on a bipartisan basis, but we haven't made a lot of 
progress. But I think you present a very rich environment of 
how this can now be accomplished if we rethink how we look at 
these institutions.
    And I think that we sort of see a confluence of events 
taking place, probably driven by the economic downturn but also 
by the work of Georgetown that maybe disturbs some of us 
liberal arts degree majors and graduates, that 80 percent of 
the people who are going to college are going there to get a 
job. And that doesn't reduce the responsibility of the other 
institutional mandates of institutions of higher education, but 
we cannot neglect that.
    And when we look at the Chamber of Commerce, it is telling 
us that these institutions really have to think about what 
service are you providing to your community--that could be the 
State or your local community or to the nation.
    It goes back to Clayton Christensen, a writer of 
disruptors, who asked the question, for what purpose is this 
student hiring this college? Is it for a certificate? Is it for 
a job? Is it for greater education, advanced degrees? For what 
purpose is this community supporting this institution? And I 
think that the rethinking that you have proposed in your 
testimony today I think is very, very, encouraging.
    And I think, Dr. May, you have done us a great service when 
you are willing to sort of quantify what a more efficient 
institution--that doesn't mean a more base institution but a 
more efficient institution--whether you are going to graduate 
with a degree in humanities or in sciences or in business--it 
doesn't matter--what that means to taxpayers and to families 
and students paying that cost. I think Louisiana has done a 
great service here in willing to put that down. And so I think 
that is very, very important.
    And, Dr. Jones, you have touched on in your testimony--
well, you have all touched on this subject, including the 
Chamber. It is this issue of articulation agreements that can 
no longer be allowed just to lay around and you go as slow as 
the slowest boat here. I know I have been kind of at this in my 
State of California for many years and pitched battles, and 
they have made some progress, but it is not comparable to what 
we are hearing here today in terms of what has been 
accomplished and what is possible.
    I have introduced legislation--you referred to it, Mr. 
Jones--that I think that by the middle of 2014 States have got 
to have these in place. This is a luxury. It is very costly to 
taxpayers. It is very costly to students and their families if 
you don't have this.
    And, Ms. Lubbers, you talked about credit creep. We don't 
know quite why it happened. Was it essential? Was it necessary? 
Except I know it cost me that much per unit to finance that 
credit creep, and I think that has to be looked at again.
    I would hope people would support the legislation. I 
basically say, do it however you want to do it. Let's just come 
up with a system so students can navigate this system in the 
most informed, efficient way since they are borrowing money. 
When I went to school, we weren't borrowing money.
    I would say, Mr. Bucshon, it would have been much better if 
we had privacy arrangements so I wouldn't have to bring my 
grades home. That would have worked out much better in the 
Miller household.
    So I just want to thank you very much; and, Madam Chair, I 
want to thank you for this hearing. I hope we can continue. 
This is really a conversation that is taking place here this 
morning about how we can support these efforts by the States, 
and there are others that are leading the way on making our 
institutions much more responsive to today's economies, to the 
needs of our students today.
    It is no longer just about the degrees that we have 
historically awarded. As you know, it is also about 
certificates. It may soon be about badges that you will be 
asked to recognize or not recognize, to assign credit to or 
assessments to that you don't give, that you don't have control 
over. We don't know how that is going to play out.
    So this is a very exciting time, but with those cost 
factors continuing to creep up, you have focused I think our 
attention here. And I hope that we can continue to follow up in 
other hearings on many of the issues you have raised. Because I 
think you are developing a roadmap of what we should insist 
upon if we are going to keep spending taxpayer dollars in these 
systems and financing the cost of college for students and for 
their families.
    So thank you very, very much, Madam Chairman, for this 
hearing.
    Chairwoman Foxx. Thank you, Mr. Miller, for your very fine 
comments; and you can count on our continuing to spend time on 
this issue.
    Now I would like to recognize Dr. Heck for his comments. We 
are blessed with three physicians here this morning asking 
questions and another person in the health care field. So we 
are very blessed in this area.
    Mr. Heck. Thank you, Madam Chair, and I thank all of you 
for being here and for your testimony.
    I guess the one side of having three doctors is we all very 
much know--at least I do--the cost of education. And not to 
dissuade the students here, but I am still paying off my 
student loans between college and medical school.
    Mr. Pattison, in your testimony you talk about the 
increased cost of about 72 percent at a 4-year public 
university adjusted for inflation; and we heard from Ms. 
Lubbers some of the drivers of that cost, like technology, 
investment in infrastructure, employee benefits, and support 
staff. There are some that have theorized or postulated that as 
more financial aid money becomes available, whether it is 
through guaranteed student loans or Pell Grants, that that also 
is a driver of increasing costs at universities.
    Mr. Pattison, or everybody else on the panel, have you seen 
any evidence that supports that claim that as more money 
becomes available to pay for higher education the cost of 
higher education goes up?
    Mr. Pattison. Well, what I will say--and I think this is 
really an important point as all of this is discussed--is there 
are so many factors obviously affecting the cost of education 
and tuition increases, but there are very few activities or 
ways of financing that create the incentives on the 
institutions to be as cost-efficient as possible. And I think 
the bottom line is, based on what you heard me say when I laid 
out the statistics of the tight budgets in the future, 
especially for States, it is unsustainable, in my view, that 
colleges and universities will be able to raise tuition at the 
rates they have.
    So I think something is going to have to come together, and 
there some great programs that have been talked to create the 
right incentives to focus not just on funding the additional 
cost increases but also funding results, completion, and so 
forth.
    Mr. Heck. I appreciate that.
    Then, to Ms. Lubbers, I guess I define cost and 
affordability maybe a little differently. To me, cost is what 
does it cost the university to provide the education. 
Affordability is whether or not the student cannot afford the 
cost. And so some of the things that you talked about, like 
streamlining the ability for transfer credits or decreasing 
summer tuition, guaranteeing or trying to secure on-time 
graduation, may address the affordability for the student, but 
what steps are being taken to control the costs to the 
university of providing that education?
    Ms. Lubbers. Well, obviously, you have to approach this 
from both angles, and we are trying to do that in Indiana as we 
are looking at the cost structure itself. And you have 
mentioned some of the things that I had talked about that were 
drivers of the cost of higher education and to the degree that 
we are able to successfully use technology, for example, to 
drive down costs. There is some question that in some 
institutions where the cost--technology is actually driving up 
costs.
    And so we are asking very, very specific questions about, 
you know, when can we reap some benefits from this technology 
where we can have academic rigor and costs won't keep going up 
with technology? You know, do we need all the expensive 
facilities that we are building? Especially at a time in which 
many people will be getting their higher education perhaps not 
going to an institution any more. So do we keep building? 
Because there are some sectors of the market who want that 
particular part.
    So at some point you have to say not what do you want but 
what do you need. And I think that is where we are getting to 
the point right now.
    So we are very intentional about looking at the cost 
structure and rewarding things that we think are giving the 
kind of dividends that we want in Indiana. It is not easy. 
Turning it around is tough. But you know from being in health 
care many people are talking about higher education in the same 
way they talked about health care. Is it the next bubble? And 
we need to make sure that it isn't by making sure that we do 
address the costs and the value proposition.
    Mr. Heck. I appreciate the catch-22 that sometimes 
technology causes. Because, like I say, as my daughter was 
going to the University of Nevada Las Vegas, she decided to 
take on line course which actually came with an additional fee 
for taking it on line, which you would think maybe it might be 
more cost-effective to the university to not have the person 
sitting in a classroom.
    Dr. May, you mentioned, among other things, the impact of 
credit hours. Can you explain what is it that is driving the 
increase of credit hours for a degree and whether or not those 
credit hours are actually necessary? Is it some way and somehow 
an attempt to increase the tuition dollars coming to a 
university?
    Mr. May. And I think that is kind of a universal challenge 
for colleges. Because we kind of have an add-on mentality and 
approach as new knowledge and skills and abilities are 
introduced. We don't always go back and re-examine the entire 
curriculum. What we do is tend to add things on to the end of 
the curriculum so that students end up doing more. And while 
one course seems relatively minor, it doesn't take long before 
it is two and three and four over a period of years.
    And so what we have done is make sure the learning outcomes 
stay the same. However, go back and reexamine all the courses 
that are in the program to make sure that, in fact, one, they 
align with the needs of business and industry, they do provide 
the skills that lead to jobs, and we do it in such a way, 
especially for those students that transfer, that they are not 
accumulating additional hours than what they really need.
    So I think it is one of many ways in which, as colleges and 
States, that we have to look at the cost structure, and that is 
a very basic way that pays dividends, improves time to a 
degree, reduces time, and cuts the cost to everyone involved in 
the process.
    Mr. Heck. Thank you all again for being here on this 
morning.
    Thank you, Madam Chair. I yield back.
    Chairwoman Foxx. Thank you, Mr. Heck.
    Mr. Thompson.
    Mr. Thompson. Thank you. I thank the chairwoman for this 
very, I think, incredibly important hearing; and thanks to the 
witnesses who are here.
    I was going to go down one direction until the chairwoman 
pointed out all of the health care professionals on the panel, 
and I started to have flashbacks from my 30 years of health 
care with regulations and what that has done to our health care 
system in terms of driving up costs and decreasing access.
    And in front of me--I guess I was supposed to ask about 
something else, but in front of me there was an article that 
was put out by the American Council on Education and 
specifically has a lot of different things they have addressed 
in terms of the cost of education.
    But one had to do with regulation. So I wanted to--that is 
where I--the direction I want to go with my questioning. And 
specifically--and I want to get your response to this--this 
white paper from 2012, from this year, it talks about in recent 
years burdens imposed by colleges and universities by federal 
regulation have become increasingly complex, onerous, and 
costly.
    And so I guess my question will be whether you agree with 
that, disagree with it. It specifically referenced that the 
Higher Education Opportunity Act of 2008 alone added over a 
hundred new regulations and a 2011 Congress mandated study 
found that 90 percent of senior campus leaders reported the 
implementation and administration of regulations under the 
Higher Education Opportunity Act of 2008 were burdensome.
    It goes on. It talks about a finding that in 2005 there 
were more than 7,000 federal regulations governing colleges and 
universities and the number of regulations having grown 
exponentially. So my question--I will open this up to the 
panel--is do you agree or disagree? Was your experience--is 
compliance with federal regulations on our higher education, 
has it become complex, onerous, and costly, as this article 
cited?
    We will start with Mr. Pattison.
    Mr. Pattison. Well, what I think is important is that what 
we keep hearing from colleges and universities and, of course, 
through the State groups that we talk to is that every 
additional request like that is a burden. Now sometimes there 
is a benefit. So it is kind of a cost-benefit analysis.
    But what I think is important to remember is there is not a 
lot of extra capacity to comply with additional requirements. 
And I know it might sound trite to even suggest that money come 
with additional requirements, but I do know we continue to hear 
a lot of concerns that any additional requirements require 
additional administrative capacity that really doesn't exist. 
They are just so tight right now, especially because we have 
had the recession and tight budgets over the last few years.
    Mr. Thompson. So if it is tight capacity, then that has to 
be funded somewhere, and that tends to be through tuition. The 
cost of compliance has an impact on tuition.
    Mr. Pattison. Especially during the last few years, again 
because the State support because of the recession has been 
shrinking.
    Mr. Thompson. Ms. Lubbers?
    Ms. Lubbers. These are very complex enterprises, as we 
know, so trying to find a way to impact the system needs to be 
considered I think primarily at the State level and that the 
States are best suited to look at how these enterprises 
operate.
    Different States are different. We have a coordinating 
board. Our boards of trustees are primarily for the operations 
of the institutions. Some States have boards of regions or 
governing boards, and they operate differently in that regard, 
and they have more direct authority over what they expect those 
institutions to do.
    I guess my overall disposition on this issue is that, with 
the exception of financial aids that comes through Pell or 
Stafford loans or other ways that students receive funding, 
primarily this is a straight State-driven enterprise, and it is 
best directed at the State level.
    Mr. Thompson. Mr. Jones, any thoughts, cost of compliance 
on higher education?
    Mr. Jones. Well, I agree with Commissioner Lubbers that 
principally the money comes from the State level and 
principally that is where the responsibility--all the boards of 
trustees, the boards of regents are all appointed by governors, 
are authorized by the legislature, and that is the primary 
response.
    I will say from the federal government's responsibility the 
two themes I would pick up is, one, more transparency in terms 
of information that is reported about students, as I mentioned, 
graduation rates for part-time students, for transfer students, 
for Pell Grant students.
    And the second is this other theme of, historically, for 
six decades, the federal government's involvement has been 
about access, and that has been extremely successful. And 
reasonable expectations about a success agenda--if you are 
giving student loan subsidies, if you are giving Pell Grants, 
there ought to be reasonable expectations about students' 
progress toward timely graduation. I think that that is where 
the federal government ought to weigh in as their primary 
responsibility because of the money that you are putting out 
there.
    Mr. Thompson. Dr. May.
    Mr. May. You know, almost always regulations are about 
preventing something from happening, and as Chairwoman Foxx 
said earlier, I think there are often unintended consequences 
with that approach. Where we see something that has occurred 
somewhere and we want to deal with that issue, but, 
unfortunately, we stifle innovation, we increase costs, and 
often work against the very things that we wanted to see happen 
within our institution. And I would certainly concur.
    I think that the States are much closer to what is going on 
in terms of how to impact the local economy, how to educate 
students and solve their educational needs as well as work 
within the workforce needs of the State.
    Mr. Thompson. Thank you, Dr. May.
    Thank you, Chairwoman.
    Chairwoman Foxx. Thank you, Mr. Thompson.
    And I want to especially tell Ranking Member Miller that I 
did not coach any of these witnesses to make those comments at 
all. It was all completely on their own. But I thank you very, 
very much for it. It just shows the wisdom of the staff in 
bringing in these witnesses.
    I would now like to recognize in Congresswoman Biggert from 
the great State of Illinois.
    Mrs. Biggert. Thank you, Madam Chairman.
    And I am sorry that I missed your testimony, because this 
is such a very, very important subject, but I just have a 
couple of questions that hopefully have not been asked before.
    But I wanted to address something that Concordia College 
and the University of Illinois are working on, maybe in 
partnership, but Concordia a little bit different. What 
Concordia is doing is, instead of trying to alleviate the time 
that students, as you have been talking about in Indiana like 3 
years--but this is for them to offer on-line courses before 
students arrive to the university or the college. And I know 
that so many times there are so much remedial courses that 
students have to take.
    And I would just like to know what you think about that, 
where Concordia actually is having the on-line course, and the 
student receives college credit for it. And I think the 
University of Illinois, theirs is not credit, but at least it 
avoids another term maybe of college.
    Maybe, Dr. May, you could start with that.
    Mr. May. Sure. In relation to online, we have seen that the 
fastest growing part of our college enrollments over the last 
several years. And part of the reason for that we have also 
continued to see an increase in the age of students. Our 
average student today has been out of high school 8 years when 
they enroll. They are trying to balance work, family, job all 
together and also the inability to predict accurately a future 
in terms of their lives. So online has become very attractive 
for those individuals.
    And colleges are I think engaged in--and we certainly are 
in Louisiana--to really as a response to the needs of students 
and to make sure that we have the workforce that is in place to 
meet those needs. So it is increasingly important, and we 
expect that to continue to be the fastest growing aspect of our 
colleges.
    Mrs. Biggert. Ms. Lubbers, maybe you could comment on that 
from Indiana. But I think that this really is addressing the 
student that really is maybe the traditional student you know 
that is just out of high school and could spend time before 
that, you know, doing some of the remedial or whatever these 
courses would offer.
    Ms. Lubbers. Well, what is abundantly clear is that we need 
to a better job in however we are doing remediation and that it 
hasn't been working the way we are doing it. And working with 
Complete College America and other organizations, Indiana is 
very committed to the redesign of remediation. It is 
devastating to a student when they have to take remediation, 
even more so when they don't complete and they never continue 
with their work.
    So to answer to your question more specifically, I think on 
line work is turning out to be very effective. I know our 
community college system, ID Tech, is using it with some pre-
courses to get students ready so that they begin.
    Stan would offer, I am sure, that to the degree that we can 
get students immediately into credit bearing courses and if by 
the use of on line and giving them some of that remediation 
before they can start credit bearing courses more quickly saves 
them time, saves them money, encourages them so they can 
continue to keep going.
    You know, I think there are lots of different models, and I 
think that is a very important model as well as we effectively 
use on line to move students, increase their learning, and move 
them more quickly.
    Mrs. Biggert. Do you, and maybe Mr. Jones, do you think 
they should offer just a regular, you know, the first course in 
there, what they want their degree in or anything, to do that 
on line before they get to school? Or is it just that we should 
use it for remedial?
    Mr. Jones. Well, I think three quick points. One is that 
the most developing effective strategies are blended courses 
that maybe have one-half with regular in person teachers and 
one-half on line or two-thirds in person and one-third blended 
are showing--the researchers are saying that is the best 
result, this balance.
    Second, almost any community college in the country will 
say that 50 percent--this is to your point, Congressman--50 
percent of the students that graduated from high school in the 
spring start in remedial courses in the fall taking the same 
courses. That is where a lot of Latinos and African Americans 
are ending up.
    And the third point I want to make is it is highly 
ineffective. In Texas, 40,000 students at the community college 
start in remedial math programs. Three years later, only 15 
percent have completed the first math course. And so I think 
that the on line learning has a great place as a blended 
strategy, and remediation is a great place to do that.
    Mrs. Biggert. Mr. Pattison, do you have any comments on 
that?
    Mr. Pattison. Well, it is interesting that what you have 
seen over the years is that before technology allowed online 
type of activities there have been many colleges and 
universities that bring students early that needed remediation 
or made remediation requirements, and it is nice to see that 
there is an ability with new technology to try to deal with 
that unfortunate issue and hopefully do it in a more cost-
effective way and, frankly, a more convenient way, too.
    Mrs. Biggert. This is kind of a basic question, but how do 
these colleges that have students know who is going to be in a 
remedial program before they get there?
    Mr. Jones. The best strategy is their high school. There 
are 4 years of record there. Those that have been out longer, 
as Joe talks about, they probably need some type of placement. 
But remediation at the college level simply is not working. We 
need different strategies there, different strategies in high 
schools to get them ready for college.
    Mrs. Biggert. Thank you. I yield back.
    Chairwoman Foxx. Thank you, Mrs. Biggert.
    I would now like to recognize the ranking member of the 
subcommittee for closing comments.
    Mr. Hinojosa. I want to thank each of the panelists, 
because I agree with those before me that it has been a great 
discussion, very interesting, and something that really needs 
to be addressed.
    Our population in the country is over 310 million, and when 
we went into the recession in 2008 many who had had jobs 10, 20 
years with their respective employer lost their job. And we 
talked about retraining them for the jobs that would be 
available, and we found out here in Congress that some 40 
percent of all of those who had lost their jobs had a third 
grade level of education on literacy in reading, and writing. 
So how could you retrain them if they couldn't read?
    So several of us have started an Adult Education Caucus 
trying to help them out. The appropriators can't see their way 
clear to appropriate money to do that.
    But I am going to reiterate and say that, Ms. Lubbers, you 
hit the nail on the head when you said that early reading plus 
writing equals success in school, and that was taught to us by 
members of our Education Committee who went to China to find 
out how it was that 97 percent of those who started 
kindergarten were graduating. And the response they gave us was 
that they started reading to those children from the cradle up 
to 3 and 4 years of age and that they could read by the time 
they were 4 years old. And we don't seem to get it. As smart as 
we think we are, we don't get it.
    And if we don't correct that, this 310 million may become 
400 million, and we will be worse off than what has been shown 
by all of your statistics.
    So I want to say that I hope that somehow in the report 
that we address what countries that have one-fourth of the per 
capita income, such as China and India and South Korea, are 
graduating over 90 percent of their children and turning out 
far, far more college-ready students than we are. So it is not 
so much the money but that we raise the priorities as to where 
we are going to invest our money, and that is that early 
reading plus writing to be successful and college ready.
    I want to thank you for sharing your thoughts on how States 
and institutions can do more to rein in college costs and make 
higher education more affordable for our students and for 
adults. I look forward to working with you and other key 
stakeholders in the higher education community to address all 
of the issues covered here today.
    And, with that, I yield back.
    Chairwoman Foxx. Thank you, Mr. Hinojosa.
    I want to thank again our distinguished panel of witnesses 
for taking time to testify before the subcommittee today. As 
you heard and you heard Mr. Miller say and all of us say on 
both sides of the aisle, this was a very good hearing, and we 
appreciate your taking the time to do this. I am very, very 
grateful to you for all of the comments that you shared with 
us.
    I would like to make just a couple of comments based on 
something Mr. Hinojosa said as well as build on some things you 
all said.
    It is not the money. I am so glad to hear Mr. Hinojosa say 
that. We spend an awful lot of money on education in this 
country, and we are not getting the results we should be 
getting. And so I am glad to hear that as a bipartisan feeling, 
also, because that is not what we always hear. I think it is a 
matter of priorities, and I think it is a matter of 
accountability, and it is a matter of pay for performance, and 
many other things that you have mentioned.
    I am reminded every time I hear a panel like this of 
something that former Governor Bob Scott said when he was head 
of the community college system and I was a community college 
president. He met with the presidents and said to us--this was 
back in the 1990s, early 1990s--he said, folks, I can no longer 
go to the general assembly and say we are doing the Lord's 
work; now give us more money. He said, we have to prove that we 
are getting results.
    Well, I thought that, you know, nirvana was going to come a 
long time ago and that we were going to start having to show 
results across the board. I did that when I was a community 
college president. I could prove that the money I was spending 
was being well spent. But we haven't moved as far along in that 
direction in higher education as I thought we would at that 
time.
    Somebody pointed out, but you all didn't make it explicit, 
that, right now, only 25 percent of the students in college are 
in 4-year residential situations. So most of the time, though, 
people are thinking that is the model. And that isn't the model 
that we need to be dealing with, and we have to change the 
mindset of a lot of people. And you all have brought out some 
of those issues today, but I think it needs to be explicitly 
said.
    On the issue of remediation, I not only was a community 
college president, but I helped set up remediation programs at 
Appalachian State University, and I know how those things work, 
also. If we will stop paying for remediation, if we will stop 
paying the elementary and secondary schools, Mr. Hinojosa, when 
they don't do their jobs, then I think we will see a 
difference. Appalachian State University decided to put in what 
we call developmental math because they had students taking 4-
hour math courses four times and not being able to pass them. 
That was very expensive for Appalachian State University. That 
got the attention of the math department. So they decided in 
self-interest to offer a remedial course to get the students up 
to par.
    Again, when it becomes efficient and it becomes worth their 
while, many of the colleges and universities will do these 
things.
    You haven't touched today very much on programs in the high 
schools. I am a huge proponent of dual enrollment, both for 
community college credit as well as university credit. Again, 
Appalachian State University did this back in the 1960s and 
'70s for high school students, some high school students 
graduating with as many as 24 hours of college credit.
    We need to be doing more of all of those things to bring 
down the cost. We know the answers, I think, in many cases. 
Because you all showed the models that are out there. Now I 
think the challenge to us is how do we offer incentives, not--I 
don't want us to do more regulatory sticks, but how do we offer 
incentives or how do we help people see that it is in their 
self-interest to be doing the kinds of things that you are 
pointing out that are being done. And I do think you have 
brought--all four of you have brought great ideas to us today, 
and I want to thank you for it.
    One other comment that I didn't make. You talked about the 
72 percent increase in tuition or, in the case of Indiana, 100 
percent. At the same time nationally that tuition is going up 
72 percent, the average income of Americans has gone up only 34 
percent, and so there is a huge gap there. And I don't think 
the higher education community has been willing to deal with 
that reality in the past. Because we all want our children to 
have great educations. We all want that. And too many times, as 
Governor Scott said, you know the higher education community 
has been asking for a blank check, basically. We can't continue 
to do that. So we have to figure out a way, as Mr. Hinojosa 
said, I think how do we get a better return on the money that 
we are spending in this area and taking from hardworking 
Americans.
    So thank you all again for being here. I want to thank all 
of the members of the committee for coming and the meeting is 
adjourned.
    [Questions submitted for the record and their responses 
follow:]







      Ms. Lubbers' Response to Questions Submitted for the Record

                          CHAIRMAN JOHN KLINE

    1. Providing better information to Hoosier students about the value 
of higher education and associated smart decisions about academic and 
financial preparation has been integrated into our strategic plan and 
our outreach efforts. Working with our K-12 colleagues and our higher 
education partners, we have coordinated our efforts to make certain 
students and families understand the implications of decisions they 
make about school and career choices. To that end, we have implemented 
a College Cost Estimator that allows them to compare the net cost of 
college versus the published cost. While the federal government has 
required higher education institutions to publish net cost data, our 
tool provides much more information to students and allows them to use 
it in a user-friendly, comparative way. We are in the process of 
expanding on this outreach to include a more comprehensive Return on 
Investment Calculator that will highlight institutional performance and 
characteristics as well as information designed to assist students in 
making better decisions. It's clear that finding the right fit for a 
college is directly tied to affordability/debt, completion and career 
aspirations.
    The federal government's role in the oversight of higher education 
is limited, but there are certainly areas where there is an appropriate 
and important involvement. Working with the states to provide up to 
date data on financial aid, institutional quality and workforce trends 
is one important way. Just last week the U.S. Department of Education 
released its Financial Aid Shopping Sheet and is seeking voluntary use 
of the document among postsecondary institutions. Future iterations of 
the document might include information about the employment outcomes of 
students, as well as average earnings by the institutions' graduates. 
Likewise, the whorl of data points about affordability and quality begs 
for improved aggregation, accessibility and transparency. States 
efforts should be complemented by a federal repository that allows for 
comparison of key data points, including better information on part-
time and adult students. Mark Kantrowitz of FinAid.org released on 
August 1 a useful policy statement (Who Graduates College with Six-
Figure Student Loan Debt?), in which he makes some cogent and specific 
recommendations for federal action. ``The U.S. Department of Education 
should track and publish more information about student loan debt, such 
as college-specific delinquency, deferment and forbearance rates, 
repayment plan utilization and average debt at graduation figures 
(disaggregated by degree level).'' Indiana supports well-reasoned 
measure that would augment the federal government's role in supporting 
informational transparency on these very complex issues.
    2. Not surprisingly, there were mixed reviews when performance 
funding was introduced. While some concerns remain, by reaching out to 
the institutions and building our metrics around mission 
differentiation we have been able to sustain and increase performance 
funding. We are in the process of refining our formula to pay for what 
we value: completion, efficiency, affordability and a focus on at-risk 
students and STEM degrees. Again, we have done this in concert with our 
institutional partners. We have built strong legislative support and 
are committed to performance funding whether there are new dollars, 
flat funding or reductions in higher education.

                        CHAIRWOMAN VIRGINIA FOXX

    1. Indiana students borrow an average of $27,000 to finance a 
college degree and tuition has increased over 100% in the past decade. 
It is against this backdrop and the low per capita personal income of 
Hoosiers that we recognized the need to step up our efforts to tackle 
the affordability issue. At the same time that we're telling people 
they need postsecondary credentials we need to ensure that the goal is 
attainable.
    2. While change is hard and we are asking our institutions to adapt 
to new realities, we have worked to overcome resistance by partnering 
with faculty members and school leaders. For example, when we stepped 
up our transfer efforts, we did so through a faculty led process that 
resulted in the seamless transfer of 85 courses throughout the system. 
Likewise, as we work to institute a 30 credit general education core, 
we are working to develop it based on the core competencies identified 
by faculty.
    Moving to a performance funding system has been challenging, 
especially in trying to fairly recognize the unique roles of our 
institutions--community colleges, research institutions and four year 
comprehensive teaching schools. This task has been made easier by 
integrating our formula into our higher education strategic plan that 
is focused on completion, productivity and quality.

                      REPRESENTATIVE LOU BARLETTA

    1. The work of improving educational outcomes and quality will be 
done in great measure at the institutional level. At our commission, we 
establish policies that are focused on student success, affordability, 
quality and productivity. In that regard, we drive our funding around 
those metrics. We also have an important role in providing clear 
information on the value of higher education, including institutional 
quality, financial aid and borrowing, career choices and workforce 
needs. Any new law or regulation from the federal or state government 
should be considered through the lens of improving student opportunity 
and success.
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        Dr. May's Response to Questions Submitted for the Record

                        CHAIRWOMAN VIRGINIA FOXX

    Can you discuss what led Louisiana to recognize they had problems 
in making college affordable for your students?

    Like much of the nation, Louisiana faces a mismatch between the 
skills of the workforce and the needs of employers. Today, most 
employers are looking for individuals that have some education beyond 
high school and less than a bachelor's degree.
    One of the primary barriers to accessing higher education is cost. 
Yet, declining state budgets have caused states to place an 
increasingly larger burden on students. Following this trend, Louisiana 
has witnessed reduced state funding and increased student tuition.
    As a state, we realized that simply shifting the burden from the 
state to students was unacceptable. Therefore, as a state, we began in-
depth policy discussions to identify ways to serve more students while 
driving down the cost per student.
    The story of Aeisha Ross is an example of the reason why we focused 
on reducing costs. As a single mother with a mortgage payment, living 
on food stamps, and up to three part-time jobs, she struggled to meet 
the needs of her family. One day, she mumbled to herself, ``I hate my 
life.'' With this statement, she resolved to make a better life for her 
and her family.
    She soon realized that the only way out of her life situation was 
to get a good paying job. The only way to get a good paying job was to 
get more education and training. She then made the decision that 
changed her life. She enrolled in the process technology program at 
SOWELA Technical Community College in Lake Charles, Louisiana.
    Today, Aeisha earns a six figure income as a control room operator 
for Shell's Onshore Gas Group. She cites that an affordable and 
accessible education was the key to not only a great paying job, but a 
great life.
    Therefore, despite budget challenges, the Louisiana Community & 
Technical College System is still the most affordable option for the 
first two years of higher education. We are pleased to continue 
offering quality programming throughout the state at a relative bargain 
compared to other institutions but we will not stand still. We will 
continue to improve in dual enrollment focusing on high school 
students, developmental education to prepare students for college level 
work, college transfer to feed into four-year colleges and universities 
and workforce training to provide the skills Louisiana requires to 
prosper.

    Did you encounter any resistance from institutions when Louisiana 
began to discuss higher education reforms? How did you appease the 
concerns of the faculty? What benefits have students and institutions 
realized since enacting the reforms put forward by Louisiana? How is 
the state working to ensure institutions receive the support they need 
to implement this initiative?

    As I stated in my previous testimony, we firmly believe that 
Louisiana's community and technical colleges have no needs. That being 
said, students have needs, employers have needs, communities have 
needs, and states have needs. Higher education is the primary means by 
which many of these needs are addressed.
    With this philosophy, faculty at both two-year and four-year 
institutions have proven themselves to be the key to developing 
solutions that improve educational quality while reducing cost. 
Certainly every member of our faculty and staff are aware of the 
economic difficulties faced by Louisiana since 2008. By engaging all of 
our human resources to find workable solutions, we have reduced overall 
costs per student while improving educational quality. The strategies 
we utilized to achieve this goal included improving student transfer 
and articulation, reducing the hours needed to earn a degree, and, 
perhaps most importantly, aligning instructional programs with 
workforce needs to ensure that graduates can earn a sustainable and 
livable wage.
    As we have focused on keeping college affordable, we have had to 
make some important and sometimes difficult program decisions. Over the 
past four years, Louisiana's community and technical colleges have 
closed over 700 programs and have added approximately a 150 new 
programs. The programs that were eliminated did not lead to good paying 
jobs in today's economy. The new programs that were initiated all lead 
to good paying jobs that align with employer needs.
    The only way the state of Louisiana can ensure strong financial 
support for higher education is through job growth and economic 
development. The strong support demonstrated toward community and 
technical colleges by Governor Bobby Jindal and the Louisiana 
legislature is evidence of their commitment to improved access, 
success, and program quality.

                      REPRESENTATIVE LOU BARLETTA

    It is important to hold all institutions of higher education 
(public, private, and for-profit) to high standards. However, all too 
often our regulations and laws are written to prevent and subsequently 
penalize behavior of our institutions. What ways do you believe the 
federal government and states could incentivize local institutions of 
higher education to improve educational outcomes and increase the 
quality of higher education in our country without adding costs to the 
federal or state governments?

    With the exception of programs designed to improve student access, 
such as the Pell Grant Program, most laws, regulations, and policies 
are best implemented at the state level and local levels. As policies 
move to the national level, the likelihood of producing unintended 
consequences is increased.
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    [Whereupon, at 11:44 a.m., the subcommittee was adjourned.]

                                 
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