[Senate Hearing 112-927]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-927

   MAKING COLLEGE AFFORDABILITY A PRIORITY: PROMISING PRACTICES AND 
                               STRATEGIES

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

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                                   ON

    EXAMINING MAKING COLLEGE AFFORDABILITY A PRIORITY, FOCUSING ON
    
                   PROMISING PRACTICES AND STRATEGIES

                               __________

                             JULY 19, 2012

                               __________

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


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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                       TOM HARKIN, Iowa, Chairman

BARBARA A. MIKULSKI, Maryland
JEFF BINGAMAN, New Mexico
PATTY MURRAY, Washington
BERNARD SANDERS (I), Vermont
ROBERT P. CASEY, JR., Pennsylvania
KAY R. HAGAN, North Carolina
JEFF MERKLEY, Oregon
AL FRANKEN, Minnesota
MICHAEL F. BENNET, Colorado
SHELDON WHITEHOUSE, Rhode Island
RICHARD BLUMENTHAL, Connecticut

                                     MICHAEL B. ENZI, Wyoming
                                     LAMAR ALEXANDER, Tennessee
                                     RICHARD BURR, North Carolina
                                     JOHNNY ISAKSON, Georgia
                                     RAND PAUL, Kentucky
                                     ORRIN G. HATCH, Utah
                                     JOHN McCAIN, Arizona
                                     PAT ROBERTS, Kansas
                                     LISA MURKOWSKI, Alaska
                                     MARK KIRK, Illinois
                                       

             Pamela J. Smith, Staff Director, Chief Counsel

                 Lauren McFerran, Deputy Staff Director

              Frank Macchiarola, Republican Staff Director

                                  (ii)


                            C O N T E N T S

                               __________

                               STATEMENTS

                        THURSDAY, JULY 19, 2012

                                                                   Page

                           Committee Members

Harkin, Hon. Tom, Chairman, Committee on Health, Education, 
  Labor, and Pensions, opening statement.........................     1
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming, 
  opening statement..............................................     2
Burr, Hon. Richard, a U.S. Senator from the State of North 
  Carolina.......................................................     4
Bingaman, Hon. Jeff, a U.S. Senator from the State of New Mexico.    42
Alexander, Hon. Lamar, a U.S. Senator from the State of Tennessee    44
Franken, Hon. Al, a U.S. Senator from the State of Minnesota.....    46
Merkley, Hon. Jeff, a U.S. Senator from the State of Oregon......    48
Hagan, Hon. Kay R., a U.S. Senator from the State of North 
  Carolina.......................................................    50

                               Witnesses

Heller, Donald E., Dean of the College of Education at Michigan 
  State University, East Lansing, MI.............................     5
    Prepared statement...........................................     7
Leath, Steven, President, Iowa State University, Ames, IA........     9
    Prepared statement...........................................    12
Murdaugh, Jim, President, Tallahassee Community College, 
  Tallahassee, FL................................................    15
    Prepared statement...........................................    16
Snyder, Thomas J., President, Ivy Tech Community College, 
  Bloomington, IN................................................    24
    Prepared statement...........................................    26
Twigg, Carol A., President and CEO, National Center for Academic 
  Transformation, Miami, FL......................................    28
    Prepared statement...........................................    30

                          ADDITIONAL MATERIAL

Response to questions of Senator Enzi by:
    Donald E. Heller.............................................    60
    Steven Leath.................................................    61
    Jim Murdaugh.................................................    64
    Thomas Snyder................................................    67
    Carol A. Twigg...............................................    68
Response to questions of Senator Bennet by:
    Steven Leath.................................................    64
    Jim Murdaugh.................................................    66
    Carol A. Twigg...............................................    68

                                 (iii)

  

 
   MAKING COLLEGE AFFORDABILITY A PRIORITY: PROMISING PRACTICES AND 
                               STRATEGIES

                              ----------                              


                        THURSDAY, JULY 19, 2012

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:01 a.m. in 
room SD-430, Dirksen Senate Office Building, Hon. Tom Harkin, 
chairman of the committee, presiding.
    Present: Senators Harkin, Enzi, Bingaman, Alexander, Burr, 
Hagan, Merkley, and Franken.

                  Opening Statement of Senator Harkin

    The Chairman. The Senate Committee on Health, Education, 
Labor, and Pensions will come to order.
    As we approach the start of a new academic year, millions 
of students and families across America are struggling to pay 
the escalating costs of college. During these difficult 
economic times, soaring tuition and shrinking real incomes are 
making college less and less affordable. Over the past decade, 
State and local funding for students dropped by 25 percent, 
while tuition and fees at 4-year public schools increased by 72 
percent.
    Student debt crossed the $1 trillion mark and surpassed 
credit card debt for the first time ever. The news media is 
rife with stories of crushing student debt, including graduates 
with $120,000 debt making $225 a week working two jobs. For 
millions of young people, these trends are putting the American 
Dream on hold or out of reach.
    A national survey of recent graduates, released this past 
spring, found that 40 percent had delayed making a major 
purchase, like a home or a car, because of college debt. About 
one-fourth had decided to put off continuing their education, 
or had moved-in with relatives, to save money. Americans aged 
25 to 34 now make up a little more than one-fourth of all home 
buyers, the lowest share in the past decade.
    There is no need to cite more of these grim statistics and 
stories today, but the message is clear: college is 
increasingly out of reach for students from working families 
and lower income families and our Nation is losing ground in 
having a well-educated workforce that can compete in the global 
economy.
    One of my top priorities as chair of this committee is to 
address this college affordability crisis, and to try to find 
ways to help curb the ever-growing financial barriers to 
college. This is the second HELP committee hearing this year 
focusing on college affordability. As with the previous hearing 
in February, I want us to move beyond merely bemoaning the 
severity of the problem. Our focus will be on institutions that 
are breaking with ``business as usual'' to implement promising 
strategies and practices, innovations and initiatives to 
improve college affordability.
    Today's panel emphasizes efforts at the institutional level 
that are proving successful in curbing costs, both for colleges 
and students, while improving student access and student 
success. These innovations can help inform our committee's work 
in designing Federal policy, and may be worthy of being 
replicated and scaled up to help America regain and retain its 
global leadership.
    We will also hear some expert insights into how tuition 
pricing and financial aid policies can promote affordability. 
How do some schools take an unsparing look at their operations 
to find efficiencies, so savings can be translated into minimal 
or no tuition increases and more effective student supports? 
How are schools working with students and families to ensure 
they are making sound financial decisions and accessing all of 
the aid available to them? How are innovative leaders in 
academia realigning and reinventing their operations? How are 
some schools realizing gains in retention and completion while 
bringing down costs per student? How do some schools maximize 
their financial aid resources by targeting aid to students with 
the most financial need?
    In short, how can colleges and universities make it a 
priority to strengthen post-secondary access and to boost the 
success of students from lower and middle income families in 
the face of State cuts, growing costs, and increasing calls for 
better responsibility and outcomes?
    I look forward to working with our distinguished Ranking 
Member, Senator Enzi, and my colleagues on both sides to ensure 
that a college education remains affordable and within reach 
for all Americans regardless of background.
    With that, I invite Senator Enzi for opening remarks.

                   Opening Statement of Senator Enzi

    Senator Enzi. Thank you, Mr. Chairman.
    I am glad that we are having this hearing, and I appreciate 
this outstanding panel. I appreciate the extensive testimony 
that has been provided. I only regret that you will have to 
reduce that so we can stay within the timeframe, and so that we 
will have time for questions, but what you have provided 
already is extremely helpful.
    Not only do we have this distinguished panel but, of 
course, we have the former president of the University of 
Tennessee serving on this committee. He has been suggesting 
ways for a long time on how colleges could solve some problems, 
and that we could quit laying some burdens on the colleges. So 
I thank you, Mr. Chairman, for having this hearing.
    As we discussed at our February hearing on the cost of 
higher education, college has become too expensive and shows no 
signs of getting any cheaper anytime soon. If this trend is not 
changed, it will be almost impossible for us to achieve the 
President's challenge to, again, become first in the world in 
college attainment.
    Many would say the solution lies with us, but no progress 
will be made if institutions do not first lead the way by 
finding ways to cut costs and save students money. I know this 
is possible because today's witnesses are doing just that.
    In recent years, each of these individuals has been faced 
with the challenge of doing more with less as funding from 
State appropriations has fallen, and the demand for higher 
education has increased. Each of these educators has responded 
through thoughtful budgeting and cost-cutting that has enabled 
their institutions to continue successfully serving their 
students without sacrificing educational quality. I hope that 
what we hear today will be heard by others, and will serve as a 
model for how institutions of higher education can start making 
changes now.
    With this in mind, I recognize that Congress also has a 
responsibility to help. Over the last 3 years, dramatic changes 
have been made to increase access to Federal student aid, and 
to help mitigate the cost of college for a greater number of 
low-income students. These changes, while well-intentioned, 
have led to persistent funding problems in the Pell grant 
program, including a $6 billion funding gap that is now 
projected for fiscal year 2014.
    These funding gaps have been regularly addressed through a 
series of ad hoc changes to the Federal student aid programs in 
annual appropriations bills. While these changes successfully 
generated sufficient savings to maintain the Pell grant in the 
short term, they have come at the expense of other low- and 
middle-
income students, and have done nothing to avoid future funding 
gaps.
    Therefore, I urge this committee to begin addressing the 
long term sustainability of Pell sooner rather than later. As 
we learned earlier this year with respect to student loan 
interest rates, waiting will only result in yet another costly, 
last minute, short term solution.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Enzi.
    We will now go to our panel of witnesses. We have an 
exceptional panel of witnesses with us today. I want to thank 
all of you for taking the time to be here and sharing your 
expertise. I will go down and introduce our panel, and then we 
will start with Dr. Heller and work through.
    I will start by welcoming our first witness, Dr. Don 
Heller, who has been dean of the College of Education at 
Michigan State University since January. Previously, Dr. Heller 
taught and served as the director of the Center for the Study 
of Higher Education at Penn State University, and also held a 
faculty appointment at the University of Michigan.
    He is well known as an expert on higher education finance 
and economics, especially financial aid and tuition pricing, 
widely published in scholarly journals, and his work has been 
frequently reported on by the media.
    Next, we will hear from Dr. Steven Leath, president of my 
alma mater, Iowa State University, who has made college 
affordability a top priority for his tenure at ISU. Dr. Leath 
took the reigns at Iowa State in January, coming from North 
Carolina where he spent many years as a faculty member, 
research program leader, and high level administrator with the 
University of North Carolina System and North Carolina State 
University.
    He currently serves on the Iowa STEM Advisory Council, and 
is a member of the Greater Des Moines Committee's Capital 
Crossroads Implementation Committee. I know that the entire ISU 
community is very excited about Dr. Leath's arrival, and shows 
great signs for doing great things for ISU and the State of 
Iowa.
    Since he spent so much of his life in North Carolina, I 
would like to yield to my good friend and the Senator from 
North Carolina, also for purposes of recognition.
    Senator Burr.

                       Statement of Senator Burr

    Senator Burr. Mr. Chairman, thank you.
    It is tough when you take one of the Chairman's witnesses, 
and ask to recognize him, and introduce him.
    But let me say to my colleagues, Steve Leath has a 
remarkable record within the North Carolina University System. 
Not only has he served in numerous capacities in his field of 
agriculture, Steve led an effort by the University System in a 
public-private partnership to create the largest research 
campus in the world for the study of human nutrition. It is 
truly a model of success for public-private partnerships. Not 
limited to the University System, it has six academic campuses 
on the research campus park. It is the only facility in the 
world that has some of the equipment that they currently have.
    Steve has had an unbelievable history of increasing the 
grants and research programs within the University System, 
which has led the North Carolina University System to be one of 
the most impressive research organizations in the country. He 
has also pioneered what, I believe, is one of the most 
important public-private partnerships and will be a model for 
others to try to replicate around the world.
    Mr. Chairman, he was a graduate of Pennsylvania State 
University, Master's at the University of Delaware, and his 
doctorate in plant pathology from the University of Illinois. I 
cannot think of a person with a better background than to serve 
as the president of one of your esteemed institutions.
    Thank you.
    The Chairman. Thank you very much, Senator Burr.
    Our next witness, Dr. Jim Murdaugh, is president of 
Tallahassee Community College. Before coming to Tallahassee 
Community College, Dr. Murdaugh spent over 20 years working in 
law enforcement and criminal justice, and served 30 years in 
the U.S. Air Force Reserve. He was elected to the board of the 
Florida Association of Colleges and Universities, and will 
chair its legislative agenda committee for the upcoming school 
year.
    Next, we will hear from Thomas J. Snyder, the president of 
Ivy Tech Community College in Indiana. Mr. Snyder came to Ivy 
Tech in 2007 after a successful career as a business executive 
including time at General Motors, and most recently as 
president and CEO of Delco Remy International. A recognized 
leader in advanced manufacturing and alternative energy, Mr. 
Snyder's company participated in the introduction of the first 
U.S.-produced hybrid vehicle drive. ``The Chronicle of Higher 
Education'' named him as one of seven community college 
presidents making a difference nationwide.
    Our final witness, Dr. Carol Twigg, is president and CEO of 
the National Center for Academic Transformation. Dr. Twigg is 
an internationally recognized expert in using information 
technology effectively to transform teaching and learning in 
higher education. Prior to founding NCAT in 1999, she was the 
vice president of Educom, an association of colleges and 
universities dedicated to effectively using technology. She has 
also served as the Associate vice chancellor for learning 
technologies for the State University of New York (SUNY), and 
has held many senior academic administrative positions at SUNY 
Empire State College.
    As I said, we have a very, very distinguished group as a 
panel, today. All your testimonies will be made a part of the 
record in their entirety. We will start with Dr. Heller and go 
through. If you could just sum up your testimony in 5 or 7 
minutes or so, the clock says 5, if you go a little bit over, I 
am not worried too much. But I know a lot of Senators want to 
get engaged in a colloquy with all of you, so if you can 
summarize your testimony, I would appreciate it.
    We will start with you, Dr. Heller. Please proceed.

STATEMENT OF DONALD E. HELLER, DEAN OF THE COLLEGE OF EDUCATION 
         AT MICHIGAN STATE UNIVERSITY, EAST LANSING, MI

    Mr. Heller. Chairman Harkin, Senator Enzi, and members of 
the committee thank you for the opportunity to address you on 
this critical issue affecting our Nation.
    I come to you today having conducted research on financial 
aid, tuition pricing policies and their impact on college 
access for over 15 years, and not as a representative of 
Michigan State University.
    As you are aware, tuition prices at colleges and 
universities have skyrocketed. Over the last 3 decades, prices 
in both public and private institutions have grown more than 3 
times faster than inflation, and more importantly, 3 times 
faster than median family income in our country.
    The purpose of my testimony today is not to examine the 
reasons behind these rising prices, but to discuss what 
governments, and colleges, and universities can do to ensure 
that college remains accessible for all students. My remarks 
are focused on what we can do to promote college access and 
success for students from low- and moderate-income families 
because it is these students who are on the margins of 
attending college, and these we need to focus on if we are to 
achieve, as Senator Harkin mentioned, President Obama's goal of 
returning the United States to world leadership in educational 
attainment.
    For poorer students, the sticker or the posted price of 
college is what drives their perception of what it costs to 
attend. In a world of perfect information about prices and 
financial aid, students would be able to accurately calculate 
the true net price that they face, but this fantasy world does 
not exist. The world of higher education finance is a 
mysterious place for most of these students. While the 
Department of Education and some higher education institutions 
have taken important steps to disseminate better information 
about financial aid, there is still much that needs to be done.
    The hundreds, if not thousands, of studies that have been 
conducted on financial aid will tell us what we need to do to 
ensure college participation for these students with financial 
need. Because they base their college-going decisions on 
sticker prices, financial aid programs need to be simple, 
easily accessible, and provide information early in student's 
lives so that they can make good decisions about preparing for 
college academically and financially.
    We also know that grants are much more effective in 
promoting college participation than are student loans. Poorer 
students have been shown to be more averse to borrowing than 
their wealthier peers and they, instead, will often choose to 
enroll only part time and work more hours, behaviors that we 
know are detrimental to completing a bachelor's degree program.
    Thirty percent of the grants are awarded by States and 55 
percent of institutional grants are awarded without any form of 
means testing. We need to encourage States and universities to 
focus their support on students with financial need. Higher 
education institutions need to ensure that they are doing all 
they can to keep tuition prices in check, and I know that my 
colleagues on this panel will be talking about that.
    Some observers have argued that Federal financial aid 
serves little purpose than to provide incentives for 
institutions to raise their prices and capture that aid, but 
there is no credible evidence to support this proposition.
    During the administration of former president George W. 
Bush, the Department of Education published a highly respected 
study on tuition price increases and what caused them. It found 
that the primary driver of tuition price increases in public 
institutions, where over three-fourths of our undergraduate 
students attend college, is the change in State funding. As 
States invest less money in higher education, the institutions 
respond by raising prices. This study found no relationship 
between the availability of Federal and State grants and the 
ensuing tuition price increases in either public or private 
not-for-profit institutions.
    Now, when institutions raise prices, they have an 
obligation to ensure that they increase their own financial aid 
program to hold harmless these neediest students. For example, 
last year our State cut Michigan State University's 
appropriation by 15 percent, and our board raised tuition 6.9 
percent to compensate, in part, for these cuts. But the board 
also increased our own institutional grant aid by 10 percent 
with 83 percent of these grant dollars going to students with 
financial need. This is an example of what institutions need to 
do with their own financial aid programs.
    While Pell grants receive bipartisan support from Congress, 
one problem with the program is that its maximum awards have 
not kept pace with the increase in tuition prices. So I would 
encourage you to restore the purchasing power of the Pell 
grant.
    A second problem with Pell is that most students are not 
aware of the Grants until late in their senior year of high 
school. They receive a financial aid offer from an institution, 
and it is only then that they know what kind of grants they 
will be receiving. This is too late to help students who are 
deciding earlier in their lives if they can afford to attend 
college.
    To address this problem, I would strongly encourage you to 
fund a small provision in the Higher Education Opportunity Act 
called the Early Federal Pell Grant Commitment Demonstration 
Program. This innovative program would test the efficacy of 
awarding Pell grants to eligible students in the eighth grade. 
By awarding grants to students in middle school, they would 
have at least 4 years of high school to prepare academically, 
socially, and financially to attend college.
    The Demonstration Program was modeled on the State of 
Indiana's Twenty-first Century Scholars Program, which provides 
a guarantee to middle school students who are on free or 
reduced lunch, that the State will pay all of their tuition at 
any public institution in Indiana.
    This Demonstration Program--that was authorized by the 
Higher Education Opportunity Act but not yet funded--would be a 
very modest effort. I encourage you to fund it and implement it 
so then we may learn how we can make Pell grants even more 
effective than they already are today.
    I will close by thanking you once again for the opportunity 
to address this committee. And I would be happy to take your 
questions after the remaining witnesses have testified.
    Thank you.
    [The prepared statement of Mr. Heller follows:]
                 Prepared Statement of Donald E. Heller
    Chairman Harkin, Senator Enzi, and members of the committee, thank 
you for the opportunity to address you on this critical issue affecting 
our Nation. I come to you today as someone who has been conducting 
research on financial aid and tuition pricing policies, and their 
impact on college access, for over 15 years, and not as a 
representative of Michigan State University.
    As you are aware, tuition prices in colleges and universities have 
skyrocketed. Over the last three decades, tuition prices in both public 
and private institutions have grown more than three times faster than 
inflation, or more importantly, more than three times faster than 
median family income in the Nation.\1\ This phenomenon has been well-
documented and analyzed by the Department of Education, congressional 
committees, the media, and researchers. The purpose of my testimony 
today is not to examine the reason behind these rising prices, but 
rather, to discuss what governments and colleges and universities can 
do to ensure that college remains accessible for all students who are 
able to benefit from a post-secondary education.
---------------------------------------------------------------------------
    \1\ College Board. (2011). Trends in college pricing. Washington, 
DC: Author; and U.S. Census Bureau. (2012). Race and Hispanic origin of 
householder--Families by median and mean income: 1947 to 2010. http://
www.census.gov/hhes/www/income/data/historical/families/f 05.xls.
---------------------------------------------------------------------------
    I am going to focus my remarks on what we can do to promote college 
access and success for students from low- and moderate-income families, 
because it is these students who are on the margins of attending 
college. If we are to achieve President Obama's goal of returning the 
United States to world leadership in educational attainment, it is 
these students on whom we need to concentrate our efforts.
    In discussing college prices, we need to distinguish between two 
important concepts: (1) the sticker price, or the posted price on 
college Web sites or admissions materials; and (2) the net price, or 
what students are actually charged after financial aid is taken into 
account. For poorer students, the sticker price of college is what 
drives their perception of what it costs to attend college. In a world 
of perfect information about prices and financial aid, we would not 
have to concern ourselves with sticker prices, as students would be 
able to quickly and accurately calculate the true net price they would 
face.
    But this fantasy world does not exist. Instead, the world of higher 
education finance is a complex and mysterious place, particularly for 
these low- and moderate-income students, and for those who are the 
first in their family to attend college. While the Department of 
Education and some higher education institutions have taken important 
steps to disseminate better information about financial aid, there is 
still much that needs to be done.
    The hundreds, if not thousands, of studies that have been conducted 
on financial aid \2\ provide us with a very clear picture of what we 
need in our college financing policies to ensure successful college 
participation for these students:
---------------------------------------------------------------------------
    \2\ For an overview of this literature through the years, see: 
Baum, S., McPherson, M., & Steele, P. (Eds.). (2008). The effectiveness 
of student aid policies: What the research tells us. New York: The 
College Board; Heller, D.E. (1997). Student price response in higher 
education: An update to Leslie and Brinkman. Journal of Higher 
Education, 68(6), 624-59; Kim, J. (2010). The effect of prices on post-
secondary access: An update to Heller. Higher Education in Review, 7, 
23-46; and Leslie, L.L., & Brinkman, P.T. (1988). The economic value of 
higher education. New York: American Council on Education/Macmillan 
Publishing.

     They base their college-going decisions primarily on the 
posted sticker price on college, so we need to ensure that our 
financial aid programs are simple to understand, are easily accessible, 
and provide information early enough in students' lives so that they 
and their families can make good decisions about preparing for college 
both financially as well as academically.
     Grants have been shown to be much more effective in 
promoting college participation than are student loans. While loans 
have become an important tool for those from middle- and upper-income 
families, poorer students have been shown to be more averse to 
borrowing to finance their college education. They instead will often 
choose to enroll only part-time and work more hours, behaviors that we 
know are detrimental to completing a bachelor's degree program. Thus, 
grant aid is particularly critical for ensuring their access to and 
progress through post-secondary education.
     Almost 30 percent of the grants awarded by States to 
undergraduate students, and 55 percent of those awarded by 
institutions, were awarded without means testing. Research has 
consistently shown that these merit grants are awarded 
disproportionately to students from wealthier families.\3\ The most 
effective grants are those that are targeted on the poorest students, 
as Federal Pell grants are, so we need to encourage States and 
institutions to refocus their efforts on supporting students with 
financial need.
---------------------------------------------------------------------------
    \3\ See for example Heller, D.E., & Marin, P. (Eds.). (2002). Who 
should we help? The negative social consequences of merit scholarships. 
Cambridge, MA: The Civil Rights Project at Harvard University; Heller, 
D.E., & Marin, P. (Eds.). (2004). State merit scholarship programs and 
racial inequality. Cambridge, MA: The Civil Rights Project at Harvard 
University.; and Heller, D.E. (2006). Merit aid and college access. 
Madison: Wisconsin Center for the Advancement of Post-Secondary 
Education, U. of Wisconsin.

    We should not let our higher education institutions off the hook 
with respect to their obligations to ensure that they are doing all 
they can to keep tuition price increases in check. Some observers have 
argued that Federal financial aid serves little purpose other than to 
provide incentives for colleges and universities to raise their prices. 
But there is no credible evidence to support this proposition.
    The most thorough and authoritative analysis that has examined the 
reasons behind tuition price increases was mandated by Congress in the 
1998 reauthorization of the Higher Education Act, and was published by 
the Department of Education in 2001 during the administration of former 
president George W. Bush.\4\ The key finding of this report was that 
the primary driver of tuition price increases in public institutions--
where over three-quarters of our undergraduates attend college--is the 
change in State appropriations. As States invest less money in their 
colleges and universities, the institutions respond by raising prices 
faster. This study found no relationship between the availability of 
Federal and State grants, or student loans, and tuition price increases 
in either public or private not-for-profit institutions.
---------------------------------------------------------------------------
    \4\ Cunningham, A.F., Wellman, J.V., Clinedinst, M.E., & Merisotis, 
J.P. (2001). Study of college costs and prices, 1988-89 to 1997-98, 
Volumes 1 and 2. Washington, DC: U.S. Department of Education, National 
Center for Education Statistics.
---------------------------------------------------------------------------
    When colleges and universities do raise prices, they have an 
obligation to ensure that they also increase their own institutional 
aid programs in order to hold harmless low- and moderate-income 
students. Let me give you one example of how my institution, Michigan 
State University, has done this. Last year, when the State of Michigan 
cut our appropriation by 15 percent, our Board of Trustees voted to 
make up for some of this cut by raising tuition 6.9 percent. But it 
also increased our grant budget by 10 percent, with 83 percent of grant 
dollars awarded to undergraduate students going to those with 
demonstrated financial need. For next year, when the Board voted to 
increase tuition by 3.5 percent, it increased the grant budget by 6.5 
percent. It is this kind of commitment to increasing need-based grants 
at a higher rate than tuition increases that should be encouraged in 
other institutions, public and private alike.
    This year we are celebrating the 40th anniversary of the creation 
of the Higher Education Act's Basic Educational Opportunity Grant 
program, later renamed Pell grants after one of the program's chief 
supporters, the late Senator Claiborne Pell of Rhode Island. This 
program has long received bipartisan support from Congress, and the 
members of this committee and its counterpart in the House should be 
applauded for that support. One major problem with the Pell grant 
program is that its maximum awards have not kept pace with the increase 
in tuition prices, so I would encourage you to restore the purchasing 
power of Pell grants.
    A second problem with Pell grants is that most of the students who 
are eligible for them are not aware of that eligibility until late in 
their senior year of high school, after they have already applied to a 
college, been accepted, and are presented with a financial aid offer. 
This process does not help those students who are wrestling earlier in 
their high school careers with the question of whether they can afford 
to attend college.
    To address this problem, I would encourage you to fund a small 
provision in the last reauthorization of the Higher Education Act in 
2008. Section 894 of the Higher Education Opportunity Act authorized 
the ``Early Federal Pell Grant Commitment Demonstration Program,'' an 
innovative program that would test the efficacy of awarding Pell grants 
to eligible students while they are in the eighth grade. The idea is 
that by awarding the grants to students when they are in middle school, 
they would have 4 years of high school to prepare themselves 
academically, socially, and financially to attend college. The 
demonstration program was modeled on the success that has been shown by 
similar State efforts, such as Indiana's 21st Century Scholars Program. 
That initiative, in place for over 20 years, provides a guarantee to 
middle school students who are eligible for free or reduced lunch that 
the State will pay all of their tuition at a public college or 
university in the State after they graduate from high school.
    The demonstration program authorized by section 894 of the Higher 
Education Opportunity Act would be a very modest effort that has yet to 
be funded. I would encourage you to work with the Department of 
Education to fund and implement this program so that we may learn how 
we can make the Pell grant program even more effective than it already 
is.
    I have taken more than enough of your time, so I will close by once 
again thanking you for the opportunity to address you today. I would be 
happy to take your questions after the remaining witnesses have 
testified.

    The Chairman. Thank you very much, Dr. Heller.
    Dr. Leath, welcome. Please proceed.

 STATEMENT OF STEVEN LEATH, PRESIDENT, IOWA STATE UNIVERSITY, 
                            AMES, IA

    Mr. Leath. Good morning and I thank you for this 
opportunity to testify today.
    As you know, I have the honor of being the 15th president 
of Iowa State University, which is Iowa's public land grant 
university. I mention this because here in Washington and 
throughout the Nation, we are celebrating the 150th anniversary 
of the Morrill Act that created land grant universities, and 
Iowa was the first State in the Nation to accept the terms of 
the Morrill Act.
    These land grant universities were created to make higher 
education accessible and affordable for the working classes, 
which is very relevant to this topic we are discussing today. 
That is, the rapidly rising costs of attending college and the 
resulting debt load that many of our young people carry whether 
they graduate or not.
    I, like many of you in this room, had to work to pay for my 
education. I attended three public universities in pursuit of 
my three degrees, and I worked two jobs throughout college so I 
could graduate without debt. It was the best investment I ever 
made, and with that in mind, I want to make this opening 
statement that I hope we can all agree on, that higher 
education is a good investment for this Nation.
    Our Nation's place in the world economically, and as a 
leader in social and humanitarian issues, depends on having a 
highly educated workforce and citizenry. In this knowledge-
driven economy, jobs are increasingly linked to the application 
of new knowledge in the marketplace, and for individuals 
getting a well-paying, secure job, it is highly dependent upon 
continuing their education beyond high school.
    Not only are earnings higher for people with education 
beyond high school, but their unemployment rate is 
significantly lower. This means we must continue to make higher 
education accessible to all who wish to pursue it, and being 
accessible means being affordable without being burdened by 
unmanageable debt load which, unfortunately, is the case for 
many of our students today.
    This is an especially important issue for us at Iowa State 
because the State of Iowa has the third highest average student 
debt load in the Nation. We are working to lessen this debt 
load for our students by using an aggressive, four-part 
approach, and I would like to talk about that briefly.
    The first part of this is holding down costs. We have a 
responsibility as presidents of our universities to do 
everything we can to reduce the overhead for the education we 
provide; everything from lights, to computing, to 
administrative and support positions. Due to State budget cuts 
and a responsibility to drive our costs lower, we have 
eliminated hundreds of positions and gained substantial 
efficiencies by combining and consolidating colleges, 
departments, reorganizing our administrative offices, merging 
major administrative computing systems, and finding more cost-
effective ways of providing services such as student e-mail. We 
are now saving tens of millions of dollars annually thanks to 
these measures, and we are proud that our tuition is now the 
lowest of all universities in our peer group.
    The second part of our approach is to provide better 
financial aid counseling and financing options for our students 
and families. Our Financial Award Notice Letter to students now 
includes, very prominently, their current indebtedness and how 
much their payments will be after graduation based on their 
borrowing trends. The Notice also emphasizes that the loans are 
optional, and encourages the use of other methods to pay for 
their education. We also help our students make better 
financial decisions. Iowa State is one of only five major 
universities in the Nation with a full service financial 
counseling clinic for our students.
    The third part of our effort is to be more creative in 
helping students find alternative and lower cost pathways to a 
college degree. Key to this approach is working with our 
community colleges. One-fifth of our new students now are 
transfers from community colleges, and an increasing number of 
our high school students come to us having already earned 
college credits; these are mostly from community colleges. Both 
paths speed a student's time to graduation, reduce the overall 
cost, and reduce their debt load.
    At Iowa State now, we have established articulation 
agreements with every community college in the State of Iowa. 
We also offer an admissions partnership program in which 
community college students, who plan to continue their 
education at Iowa State, can dual enroll at the University.
    The fourth part of our effort is maximizing revenue 
streams, other than tuition, to support our academic mission. 
The precipitous decline of State support for public higher 
education across the Nation really needs to stop. In 1981 in 
Iowa, State appropriations covered 75 percent of the cost of a 
resident student's tuition in education. Last year, that figure 
dropped to 36 percent, less than half of what it was in 1981. 
Now fortunately, we see a modest increase from the legislature 
for the coming year, so we are optimistic that this downward 
trend may have slowed or stopped.
    But the Federal Government also has an important role to 
play. Pell grants have long been an important part of financing 
a student's education, especially lower cost students, where 
affordability is linked to access. Pell grants need to keep 
pace with inflation. I applaud Congress' recent efforts to 
increase Pell grants for the 2013-14 academic year. Holding 
down interest rates on Federal student loans is also critical 
to making higher education more affordable. And again, I 
applaud your recent efforts in doing so.
    But we at the institutions have to do more to provide 
funding to help students pay for their education. Iowa State 
recently completed a major campaign that brought in about $867 
million in pledges, and commitments, and gifts, and one-fourth 
of that, $236 million, was for student scholarships. Most of 
this funding goes into endowments, so to put that into 
perspective a land grant university like Iowa State increased 
its annual scholarship dollars for students from $9 million a 
year in 2004 to $21 million last year. Soon, we will be 
launching an aggressive, new fundraising campaign that will be 
focused on student scholarships.
    I would say, overall, thanks to institutional efforts like 
these and some Federal programs, scholarships and grants 
increased nationally over the past decade by 10 percent. As a 
result, total borrowing by both students and parents is 10.4 
percent less than it was a decade ago. These are good trends, 
but more needs to be done because the debt is still 
unmanageable for many.
    But we did not get into this dilemma overnight. It has 
taken decades of cost increases, State decreases in funding, 
and poor financial decisionmaking by students to reach this 
critical debt level, and we will not get out of this overnight, 
either. This is going to take a long term, multifaceted 
approach. With all the stakeholders working together--State, 
Federal Government, colleges, and our students--we can make 
real progress to making college more affordable than it has 
been in a long time.
    Thank you very much. And at the end, I will be happy to 
answer any questions.
    [The prepared statement of Mr. Leath follows:]
                   Prepared Statement of Steven Leath
                                summary
    Our Nation's place in this world--economically and as a world 
leader in social and humanitarian issues--depends on having a highly 
educated workforce and citizenry. In this knowledge-driven economy, 
today's jobs are increasingly linked to the application of new 
knowledge to the marketplace. And for individuals, getting a well-
paying, secure job is highly dependent upon continuing their education 
beyond high school.
    That means we must continue to make higher education accessible to 
all who wish to pursue it. And being accessible means being affordable, 
without being burdened by an unmanageable debt load, which 
unfortunately is the case for many today.
    At Iowa State, we are working to lessen the debt load for our 
students using an aggressive four-pronged approach.

    1. We are reducing the ``overhead''--everything from lights to 
computing to administrative and support positions;
    2. We are providing better financial counseling and financing 
options for students and families;
    3. We are being more creative in helping students find alternative 
and lower-cost paths to a college degree; and
    4. We are maximizing revenue streams other than tuition to support 
our academic mission, meaning:

          The precipitous decline in State support for public 
        higher education across the Nation must stop; States need to 
        realize that it is in their best interests to invest in higher 
        education for their citizens if they are to capitalize on the 
        knowledge-driven economic opportunities ahead;
          The Federal Pell grants need to keep pace with 
        inflation and student loan interest rates must be kept low; and
          We, as institutions, must increase efforts to raise 
        private funds for student scholarships.

    Thanks to institutional efforts like these and some Federal 
programs, scholarships and grants have increased nationally over the 
past decade by 10 percent. As a result, total borrowing--by both 
students and parents--is 10.4 percent less than a decade ago, and loans 
borrowed in the student's name have dropped by 18.2 percent. These are 
good trends, but more needs to be done because the debt is still 
unmanageable for many.
    We didn't get into this dilemma overnight. It's taken decades of 
cost increases, State support decreases and poor financial 
decisionmaking to reach this critical debt level. And we won't get out 
of it overnight. But with all stakeholders working together--States, 
Federal Government, colleges, and students--we can make real progress 
toward making college more affordable and, therefore, more accessible.
                                 ______
                                 
    Good morning, Mr. Chairman and other distinguished members of the 
committee. I'm Steven Leath and I have the honor of being the 15th 
president of Iowa State University, which is Iowa's public land-grant 
university. I mention this because here in Washington and throughout 
the Nation, we're celebrating the 150th anniversary of the passage of 
the Morrill Act that created land-grant universities, and Iowa was the 
first State in the Nation to accept the terms of the Morrill Act. One 
of the main reasons land-grant universities were created was to make 
higher education accessible and affordable for the working classes. 
That makes our experience especially relevant to the topic we are 
discussing today: the rapidly rising cost of attending college and the 
resulting debt load that many of our young people carry, whether they 
graduate or not.
    I, like many of you, worked to pay for my education. I attended 
three public universities in pursuit of my degrees, and I worked two 
jobs throughout college so I could graduate without debt. It was the 
best investment I ever made.
    With that in mind, I want to begin by making a statement that I 
hope we can all agree upon: Higher education is a good investment for 
this Nation.
    Our Nation's place in this world--economically and as a world 
leader in social and humanitarian issues--depends on having a highly 
educated workforce and citizenry. We are in a knowledge-driven economy, 
and today's jobs are increasingly linked to the application of new 
knowledge to the marketplace. And from an individual standpoint, 
getting a well-paying, secure job is highly dependent upon continuing 
their education beyond high school, whether that's at a vocational 
school or at a college or university. The tables below show that not 
only are earnings higher for people with education beyond high school, 
but the unemployment rate is significantly lower, and the more 
education you have, the lower it is.

    Mean earnings in 2010 by education level:
    
    
    Unemployment rate in 2011 by education level:
    
    
    That means we must continue to make higher education accessible to 
all people who wish to pursue it. And being accessible means being 
affordable, without being burdened by an unmanageable debt load, which 
unfortunately is the case for many today.
    This is an especially important issue for us at Iowa State, because 
for students who graduate with debt, the State of Iowa has the third-
highest average debt load in the Nation. We are working very hard to 
lessen the debt load for our students using an aggressive four-pronged 
approach.

    The first part of this effort is to hold down costs.

    We have a responsibility to do everything we can to reduce the 
``overhead'' for the education we provide--everything from lights to 
computing to administrative and support positions. Due to State budget 
cuts and the need to reduce our costs, we have eliminated hundreds of 
positions and gained substantial efficiencies by combining and 
consolidating colleges and departments, reorganizing administrative 
offices, merging major administrative computing systems, and finding 
more cost-effective ways of providing services, such as student e-mail. 
We are saving tens of millions of dollars annually thanks to these 
measures, and we are proud that our tuition is the lowest among our 
peer group.

    The second part of this approach is to provide better financial 
counseling and financing options for students and their families.

    Our financial award notice letters to students now include--very 
prominently--their current indebtedness and how much their payments 
will be after graduation based upon their borrowing trends. The notice 
also emphasizes that the loans are optional and encourages the use of 
other methods to pay for their education.
    We also help our students make better financial decisions. Iowa 
State is one of only five major universities with a full-service 
Financial Counseling Clinic, which offers individual counseling, 
workshops and courses on personal finance--such as budgeting and the 
responsible use of credit. Participation in these courses and programs 
has more than doubled in recent years, but the number is still too low, 
so we are stepping up our efforts to attract more students.

    The third part of this effort is to be more creative in helping 
students find alternative and lower-cost paths to a college degree.

    Key to this effort is working with community colleges. Fully one-
fifth of our new students are transfers from community colleges, and an 
increasing number of high school students come to us having already 
earned college credits--also mostly from community colleges. Both paths 
speed a student's time to graduation, lessen the overall cost, and debt 
load.
    At Iowa State, we have established formal articulation agreements 
with every community college in Iowa, and in fact, we now offer what we 
call an Admissions Partnership Program in which community college 
students who plan to continue their education at Iowa State can enroll 
simultaneously at Iowa State. By doing so, they have access to all of 
the benefits that Iowa State has to offer, such as library materials, 
student services and advising--making their transfer to Iowa State 
seamless.

    The fourth part of our effort is maximize revenue streams other 
than tuition to support our academic mission.

    The precipitous decline in State support for public higher 
education across the Nation must stop. The table below shows that in 
1981 in Iowa, State appropriations covered 75 percent of the cost of an 
education at Iowa State, and tuition covered 22 percent. Last year, the 
State figure was 35 percent--less than half of what it was in 1981. The 
most precipitous decline occurred from 2008 to 2011 when Iowa State 
lost about 25 percent of its State support. Fortunately, we will 
receive a modest increase for the coming year, so we hope the downward 
trend has slowed or stopped. States need to realize that it is in their 
best interests to invest in higher education for their people if they 
are to capitalize on the knowledge-driven economic opportunities that 
lie ahead.


    The Federal Government also has a role to play. Pell grants have 
long been an important part of financing a student's education, 
especially lower income students, where affordability is critical to 
access. Pell grants need to keep pace with inflation, and I applaud 
Congress' efforts to increase Pell grants for the 2013-14 academic 
year. I would also add that holding down interest rates on Federal 
student loans is also critical to making higher education more 
affordable, which was recently accomplished, so again, I applaud your 
efforts.
    We as institutions also have to do more to provide funding to help 
students pay for their education. Iowa State recently completed a major 
fund-raising campaign that brought in more than $867 million in gifts, 
pledges and commitments. More than a quarter of that--$236 million--was 
for student scholarships, creating 832 new scholarship programs and 
expanding many others. Most of this funding goes into endowments that 
fund scholarships in perpetuity, so to put it in perspective, the 
campaign increased annual scholarship dollars for ISU students from $9 
million in fiscal year 2004 to $21 million in fiscal year 2011. Soon, 
we will be launching a new private fund-raising initiative with student 
scholarships as its primary target.
    Overall, thanks to institutional efforts like these and some 
Federal programs, scholarships and grants have increased over the past 
decade by 10 percent. As a result, total borrowing--by both students 
and parents--is 10.4 percent less than a decade ago. Loans borrowed in 
the student's name have dropped by 18.2 percent. These are good trends, 
but more needs to be done because the debt is still unmanageable for 
many.
    We didn't get into this student debt dilemma overnight. It's taken 
decades of cost increases, State tax support decreases and poor 
financial decisionmaking to reach this critical debt level. And we 
won't get out of it overnight. But with all stakeholders working 
together--States, the Federal Government, colleges, and students--I 
know we can make real progress toward making college more affordable 
and, therefore, more accessible.
    Thank you. I'd be happy to answer any of your questions.

    The Chairman. Thank you, Dr. Leath.
    Dr. Murdaugh, welcome and please proceed.

  STATEMENT OF JIM MURDAUGH, PRESIDENT, TALLAHASSEE COMMUNITY 
                    COLLEGE, TALLAHASSEE, FL

    Mr. Murdaugh. Chairman Harkin, Ranking Member Enzi, and 
distinguished members of the committee, thank you for inviting 
me.
    I represent a comprehensive community college in the 
capital city of Florida serving over 15,000 students, and I 
appreciate the opportunity to share with you some of the 
actions at our college to maintain affordability of access to 
the American Dream.
    Let me begin by saying that I believe we are an example of 
the fact that college can be affordable without reducing 
quality. This year following the Florida legislature's decision 
to fund colleges at a continuation level, we chose to hold 
tuition constant despite being given the authority to increase 
tuition by up to 5 percent. Our decision this year to hold 
tuition at the same level as last year is a strong statement of 
what our trustees, and our college leadership, value. We value 
access to higher education, and we believe access is only real 
for those who can afford it.
    Keeping our tuition for a full year of college at $2,304, 
we are one of the most affordable institutions of higher 
education in the country. In fact in 2010 and 2011, including 
fees, our net price was 36 percent lower than the national 
average for 2-year public institutions. Within the State of 
Florida, we are among the most affordable of the State's 28 
community and State colleges, and our tuition and fees are 
roughly half those of State universities for the first 2 years 
of college.
    Our low tuition has not negatively impacted our quality or 
our productivity. According to ``Community College Week's Top 
100 Associate Degree Producers'' listing for 2012, TCC ranks 
fourth nationally among 2-year institutions in awarding A.A. 
degrees. And for associate degrees rewarded to African-American 
students, we are proud that we rank sixth nationally.
    We are also above the State average in retention and 
completion rates, and we have a significantly higher percentage 
of students who transfer to 4-year institutions than the State 
average of colleges in Florida.
    Like all colleges, our first strategy is to keep TCC 
affordable by seeking efficiencies to keep our costs low. And I 
certainly do not want to minimize that, as those other 
representatives up here will speak to that issue.
    The one thing I would like to talk about is where I believe 
we have great promise in an area of efficiency in academic 
planning and execution that helps students enter, remain, and 
complete college. And I believe that holds, perhaps, as much 
promise in keeping college affordable as our efforts in 
administrative efficiencies, but there is still much to learn. 
This helps students avoid paying for unnecessary courses, it 
improves their likelihood of persistence which avoids wasting 
their tuition dollars, and provides them with degrees and 
credentials that lead to jobs that provide an appropriate 
return on that investment.
    We make extensive use of acceleration mechanisms such as 
dual enrollment before students arrive at TCC to save them 
money and expedite their time to completion. Nearly one-fourth 
of previously dual-enrolled students who come to our college 
arrive with over 20 college credits earned at no cost to them 
while they were still in high school. This saves them money in 
tuition, and it expedites their time to complete the 
Associate's degree.
    We create individualized learning plans that assure they 
take the right courses to achieve their career and academic 
goals. And of the 6,713 students in fall of 2011 with less than 
18 college credits, 85 percent had a complete plan and 90 
percent a career interest.
    We engage in a continuous course redesign to improve 
success rates and help students move through college. We focus 
on the top 10 highest enrollment classes and gateway courses to 
achieve the greatest impact on student success. We believe the 
results of our efforts, in terms of academic efficiencies, are 
that our students earn their degrees in a relatively timely 
manner.
    Among 2-year public institutions nationwide, our graduation 
rate within 3 years is 10 percent higher than the national 
average. I have provided much more information in my written 
testimony on a number of these, and other, initiatives.
    Mr. Chairman, Ranking Member, and distinguished members of 
the committee, I look forward to any questions you might have.
    [The prepared statement of Mr. Murdaugh follows:]
                   Prepared Statement of Jim Murdaugh
    We are committed to helping people, not only by providing an open 
door, but by caring about whether someone who wants to pursue education 
beyond high school can reasonably do so, and we acknowledge that 
ultimately we don't determine our affordability, students do.
    Our college has a track record of producing high quality degrees 
and credentials that have market value and social value while keeping 
costs to students at an affordable level and providing compensation to 
our faculty and staff that enables us to recruit and retain high 
quality educators.
    TCC is among the most affordable colleges of the State's 28 
community and State colleges and about half the cost of State 
universities for the first 2 years of college.
    Tallahassee Community College (TCC) is also one of the most 
affordable institutions of higher education in the country. In fact, 
TCC is ranked nationally among the top 3 percent when comparing the 
lowest cost-per-completion. In 2010-11, our net price as a 2-year 
public institution was 36 percent lower than the national average.
    Our first strategy to keep TCC affordable is simply to keep our 
cost low, while maintaining academic excellence. We keep our cost low 
through tuition pricing that balances what students are asked to pay 
with State support for community colleges, financial aid that provides 
a wide range of public and private grants and loans to reduce the 
financial barrier many of our students face to entering college, 
focusing on productivity and efficiency of faculty and staff to keep 
personnel costs low, and targeting student outcomes that keep students 
from incurring debt without finishing college.
    Our second strategy to keep TCC affordable is to minimize time to 
completion for students with effective individual learning planning 
that assures students take the right courses to achieve their goals, 
articulation agreements and transfer policies that make it seamless for 
them to enter and leave TCC, acceleration mechanisms such as dual 
enrollment that minimize time to completion, and a focus on continuous 
course redesign to improve success rates and help students move through 
college.
                                 ______
                                 
    Chairman Harkin, Ranking Member Enzi and distinguished members of 
the committee, thank you for inviting me to testify on the issue of 
making college affordability a priority. I represent a community 
college in the capital city of Florida serving over 15,000 students and 
I appreciate the opportunity to share with you some of the actions at 
our college to improve the affordability of access to the American 
Dream.
    For us at Tallahassee Community College (TCC), being sensitive to 
the role that affordability plays in access to higher education 
fundamentally begins with a discussion of our values as an institution. 
We are committed to helping people, not only by providing an open door, 
but by caring about whether someone who wants to pursue education 
beyond high school can reasonably do so.
    Our college has a track record of producing high quality degrees 
and credentials that have market value and social value while keeping 
costs to students at an affordable level and providing compensation to 
our faculty and staff that enables us to recruit and retain high 
quality educators. Our decisions have consistently and significantly 
contributed to our current level of affordability.
    Within the State of Florida, TCC is among the most affordable of 
the State's 28 community and State colleges, and our tuition and fees 
are roughly half the price of State universities for the first 2 years 
of college.
    Our first strategy to keep TCC affordable is simply to keep our 
cost low, while maintaining academic excellence. We keep our cost low 
through tuition pricing that balances what students are asked to pay 
with State support for community colleges, financial aid that provides 
a wide range of public and private grants and loans to reduce financial 
barriers, focusing on productivity and efficiency of faculty and staff 
to keep personnel costs low, and targeting student outcomes that keep 
students from incurring debt without finishing college.
    While keeping cost low, we monitor indicators of our academic 
excellence to ensure students receive value for their tuition.
    TCC is a national leader both in awarding Associate in Arts (AA) 
degrees and in graduating African-American students. According to 
Community College Week's ``Top 100 Associate Degree Producers'' listing 
for 2012, TCC ranks 4th nationally among 2-year institutions awarding 
AA degrees. For Associate degrees awarded to African-American students, 
TCC ranks 6th nationally. Compared to its peers, TCC is in the 99th 
percentile for completions per 100 students (29 per 100).
    Educational quality is also translating credentials to high 
employment rates for TCC graduates. The State accountability data show 
that 98 percent of TCC students who complete vocational programs (i.e. 
Associate in Science (AS) degrees, Associate in Applied Science (AAS) 
degrees, and certificates) find employment compared to the State 
average (90 percent).
    Our second strategy to keep TCC affordable is to minimize time to 
completion for students. We accomplish this by working with students to 
create individualized learning plans that assure they take the right 
courses to achieve their goals, maintaining articulation agreements and 
transfer policies that make it seamless for them to enter and leave 
TCC, offering acceleration mechanisms such as dual enrollment, and 
focusing on continuous course redesign to improve success rates and 
help students move through college.
    TCC students earn their degrees in a timely manner. Among 2-year 
institutions nationwide, TCC's graduation rate within 3 years is 37 
percent, which is 10 percent higher than the national average of 27 
percent.
        what steps has tcc taken in the area of tuition pricing?
    Having set tuition for a year of college (30 semester hours) at 
$2,304 this year, TCC is one of the most affordable institutions of 
higher education in the country. In fact, Collegemeasures.org ranked 
TCC among the top 3 percent nationally when comparing the lowest cost-
per-completion ($29,767 per student). In 2010-11, including fees, our 
net price ($4,125) was 36 percent lower than the national average for 
2-year public institutions ($6,485).
    I wish I could describe a process for tuition pricing at our 
institution that would provide a stable, predictable plan over time 
that is controlled by the Trustees who govern our institution. However, 
our decisions on tuition pricing take place within a broader 
environment where the Florida Legislature sets the maximum amount of 
tuition a college can charge and it determines the level of State 
funding we receive each year. Those two variables significantly impact 
the decisions we are able to make at the college level.
    The Florida college system works closely with the legislature to 
demonstrate the return on investment that is provided by the system 
from dollars spent. We enjoy a very positive relationship with 
lawmakers and the results we are able to document continue to provide 
an atmosphere of cooperation in even the most difficult budget times.
    This year, following the Legislature's decision to fund colleges at 
a continuation level we were able to review our financial condition and 
make the decision to hold tuition constant, despite given the authority 
to increase tuition by up to 5 percent. Our decision to hold tuition 
constant would not have been possible if the State had made a decision 
to cut State funding to colleges as it did the previous year.
    Our decision this year to hold tuition at the same level as last 
year is a strong statement of what we value. We value access to higher 
education. We believe access is only real for those who can afford it.
    We have committed ourselves to ensure that any tuition increase, 
which we know will take place in our future, will be tied to improving 
the quality of an education the student receives at our college as 
measured by documented learning outcomes. We also have committed 
ourselves that a tuition increase needs to be directed at proven 
strategies that are effective in improving completion and placement 
rates for our graduates.
    And, because of the nature of our community college in serving the 
workforce needs of our community, we will examine the extent to which 
any increases in our tuition can be documented in terms of their 
effectiveness in helping the unemployed and underemployed enter, 
remain, and advance in jobs in our community.
         what steps has tcc taken in the area of financial aid?
    About 65 percent of our students receive some grant or scholarship 
aid. Since 2009, TCC has gone from serving 9,282 students on financial 
aid to 11,494 in 2012, an increase of 24 percent. The amount of 
financial aid disbursed by TCC (now totaling over $76 million) 
increased by over $29 million in the past 3 years. In 2009, 5,072 
students received Federal Pell grants at TCC totaling $16 million. Thus 
far in 2012, 8,312 students received Federal Pell grants for a total of 
nearly $31 million, and that is with the elimination of the policy 
allowing students to receive two Pell grants in an award year.
    TCC is committed to ensuring every student is made aware of 
financial aid opportunities that can make a college education more 
affordable. TCC makes every effort to encourage students to apply for 
financial aid by conducting ``FAFSA Days'' on campus, financial aid 
nights at high schools, participation in events like College Goal 
Sunday, an onsite program that helps prospective students and their 
families complete the FAFSA, and by communication with high school 
students.
    With regard to loans, TCC takes our fiduciary role seriously in 
loan default prevention and requires students to complete entrance 
counseling that includes a financial literacy module. When students 
borrow $13,000 or more, new awards are not issued until the student 
meets with financial aid staff to ensure they understand their 
aggregate loan limits. While we cannot deny the loan, we can keep the 
student advised of the consequences of borrowing.
   what steps has tcc taken to increase productivity and efficiency?
    Instruction. To develop course offerings that are based on student 
need rather than just faculty preferences, TCC uses an annual 
guaranteed course schedule. The schedule is built based on data from 
previous terms as well as any known conditions for change, such as new 
programs or deleted programs, or population changes.
    For both students and faculty, this ability to plan based on the 
guarantee allows us to start classes right--both students and faculty 
are prepared the first day. An example of the efficiency of the 
schedule for 2011-12 follows:

        Planned: 117,898 seats; 4,284 Sections
        Actual: 119,644 seats; 4,273 Sections
        That is:  1,746 more seats were offered in 11 fewer sections 
        than budgeted.

    Advising. Prior to the beginning of fall term 2011, we held a 
Student Success Summit that included faculty, staff and community 
partners. We have as a core value the belief that the Student Success 
and Completion Agenda is the future of TCC: Completion matters and 
every student counts.
    Specific examples of our student success programs designed to 
improve student outcomes include mandatory orientation and advising. 
New students to the college, including first-time and transfers, are 
required to attend orientation. The objectives of the orientation 
program are for students to receive an overview of college, learn about 
campus resources, meet with an advisor, initiate an Individualized 
Learning Plan which will include registering for first-term classes, 
and receive information about living in Tallahassee.
    We opened an Advising Center prior to the start of the fall 
semester in 2011. During the first two terms it was open, it logged 
21,000 visits. It is important for students to ``start right.'' 
Therefore, we require mandatory advising for students with 0-18 college 
credit hours. Students in dual enrollment courses also have mandatory 
advising. These efforts are initial steps to helping students achieve 
their goals efficiently.
    At the conclusion of orientation and advising, students register 
for their first semester with assistance from an advisor. Prior to the 
end of their first term in college, students make an appointment with 
an advisor to discuss first-term progress, potential career objectives 
and next steps for completing their Individualized Learning Plan. We 
have assigned advisors to each of our academic divisions and physically 
located them in the divisions as part of our strategy to ``meet 
students where they are.'' The Advising Center is designed to support 
intentional planning and success strategies. Students who attended and 
enrolled during the Center's first semester (4,796) had a 99 percent 
retention rate.
    Administrative Services. We regularly review college operations 
that directly and indirectly support instruction to identify 
opportunities to streamline, eliminate, or improve them to keep costs 
down. Those reviews include program reviews of administrative areas to 
assess costs and trends.
    One such effort led the college to implement campus-wide changes in 
HVAC equipment, lighting, and computer labs to achieve greater 
efficiencies. Changes in equipment and policies led to a dramatic 
reduction in energy costs at TCC. The Florida Department of Education 
(FDOE) recently recognized TCC as the most energy efficient college 
campus in the State.
    For each of the past 3 years, the percentage of the college's 
operating budget spent on administrative expenses has declined from 9 
percent in 2008-9 to a current level of 8 percent in 2010-11.
         what steps has tcc taken to improve student outcomes?
    Since 2003, TCC has moved from below average performance in areas 
of retention and student success to becoming a top performer in the 
State. The college is now above the State average in retention and 
completion rates. The State data show that TCC has a significantly 
higher percentage of students (75 percent) transferring to 4-year 
institutions than the State average (60 percent).
    TCC has developed a ``data-informed'' culture, using internal data; 
State, regional, and national data; and feedback from surveys such as 
the Community College Survey of Student Engagement and the Survey of 
Entering Student Engagement to redesign services and support and to 
retrain faculty and staff to support learners. The college's ``data-
informed'' has been further enhanced through its participation in the 
national Achieving the Dream initiative.
    TCC's strategic plan focuses on student success and meeting local 
educational needs. Budget decisions are based on meeting the goals in 
the college's strategic plan. Goals require data analysis and specific 
outcomes to be presented for budget consideration.
    TCC has worked to strengthen the culture of success at the college. 
Every employee has a role in student success; every encounter with a 
student is an opportunity to help a student succeed. For example, a 
simple recognition from maintenance and grounds staff that students 
often lose their way the first 2 or 3 days of fall classes has led to 
an official welcome plan the first 2 days that includes tents, maps, 
and all staff taking turns to welcome and guide new students on the 
campus.
    TCC strives to prepare every student to arrive to class in the best 
condition to learn by offering excellence in all services to avoid 
distractions of financial aid problems or bookstore issues, by 
guaranteeing a schedule of classes in which no class with students 
enrolled will be canceled, and by offering a high level of academic 
support and social engagement outside the classroom.
    Faculty have developed a set of effective learning strategies for 
the classroom based on widely accepted principles that place learning 
first and provide educational experiences for learners anyway, 
anyplace, anytime. These principles permeate faculty hiring, new 
faculty seminars, faculty professional growth plans and instructional 
delivery and design.
    Student Affairs and Academic Affairs have worked together to align 
services to meet student needs. Students are guided through 
orientation, career and academic planning, and transition to work or a 
university through TCC's individualized advising system.
    To improve student outcomes, we have developed a number of 
strategies to meet student needs as they are presented and provide 
support outside the classroom. For example, we know that students who 
start in two or more developmental courses often display weaknesses in 
time management, commitment, and other success strategies. Therefore, 
we require these students to take a three-credit College Success course 
in their first semester.
    Making the College Success course mandatory for underprepared 
students has increased the persistence and success of developmental 
students, though more work needs to be done. This course teaches 
students success strategies and academic habits that are applicable 
across the curriculum, thus reducing the need for further individual 
interventions. The College Success skills are reinforced in TCC's 
Learning Commons and in a number of ``gateway courses.''
    Results show that the developmental students who succeeded in the 
College Success course in fall 2010 enrolled in the spring term at a 93 
percent rate compared to an 85 percent return rate for those who 
started college ready and did not take the course. Course success rates 
(with a grade of A, B or C) still showed a gap in the spring 2011 
semester (53 percent vs. 62 percent). As a result of redesigning the 
course and adding a new level of College Success in fall 2011, 
preliminary data suggest that the course success rate gap may no longer 
exist.
    We also know that most of our students need support beyond the 
classroom. Therefore, we have expanded our Learning Commons, the 
college's tutoring and academic support center, and moved it to a 
location in the center of the campus, connected to the library. In 
2011-12, we logged a total of 284,521 visits, with 14,106 total 
students (credit and non-credit) receiving assistance for 543 different 
courses.
    In fall 2011 we examined the performance of students in the top 50 
highest enrolled credit classes. Among those enrolled, 26 percent of 
students who visited the Learning Commons succeeded at rates 5 to 9 
percentage points higher than those who never visited the Learning 
Commons.
    An early alert system guides students to support as soon as issues 
are identified, and the Learning Commons staff proactively work with 
students to plan for success. In 2010-11, the over 15,000 students 
(unduplicated) visited the Learning Commons. Those students who use its 
services regularly (4 or more times) have an 18 percent higher 3-year 
graduation rate than those who never visit.
    Although the initial investment in the Learning Commons and the 
additional staff needed to meet student demand for services was a 
sizable financial commitment, the results are far beyond our 
expectations, both in participation numbers (there are often students 
lined up to get in when the doors open in the morning) and in increased 
success rates. The central location and structured support have proven 
to be much more successful and beneficial than individual tutoring, 
extra class sessions, use of faculty office hours and other methods.
    The Learning Commons is structured to teach students to grow from 
one-on-one tutoring, to group sessions, to independent study. 
Efficiency is achieved as students learn the skills and strategies 
needed to study and succeed on their own as well as through students 
helping and tutoring one another.
    In addition to the Learning Commons, TCC has also developed a STEM 
(Science, Technology, Engineering and Math) center to assist students 
in STEM majors. Students participate in peer-led tutorial sessions, 
student success seminars, and summer workshops and internships. The 
STEM Center supports minorities, women and financially needy students 
majoring in STEM fields and is funded by the NSF Florida-Georgia Louis 
Stokes Alliance for Minority Participation (FG-LSAMP) program and the 
NSF STEM-Star (S-STEM) scholarship program.
    In 2011-12, 63 percent of African-American students who used the 
STEM Center passed college algebra, compared to 36 percent for those 
African-American students who did not use the Center. For Trigonometry, 
African-American students who used the Center had a passing rate of 70 
percent; those who did not use the Center, only 19 percent.
  what steps has tcc taken in the area of the individualized learning 
                                 plan?
    The concept and initial design for an Individualized Learning Plan 
(ILP) began fall 2004 and was implemented spring 2007 as part of the 
advising and intervention services provided by our Student Success 
Center. Prior to this, credit students had the ability to plan their 
academic future at TCC via an advising system online, however this 
system was set up as ``one-size-fits-all'' and didn't allow for 
customization based on the individual student's abilities and needs.
    Our approach to improving the efficiency of academic planning by 
and for students was to create a case management system to track each 
individual student's progress and give the student the ability to plan 
their academic future, whether it is as a credit student transferring 
to a university or a continuing education student intending to advance 
their work skills. The ILP helps students identify their academic 
goals, choose courses needed to achieve their goals, and expedite their 
path to completion. Thus, establishing the most efficient and 
affordable path to graduation.
    While still a work in progress, the ILP improves the efficiency of 
student progression using an electronic, user-friendly, visual format 
which allows the student to become more responsible for achieving their 
educational goal. The student can identify and research a career path 
in consultation with an advisor, confirm their TCC objective, select a 
university major and transfer institution (if applicable), map out all 
courses required for graduation and their university prerequisites (if 
applicable), map out the number of semesters it will take to meet all 
requirements, and receive alerts regarding excess hours and financial 
liability.
    All students who use the ILP tools have a customized, documented 
action plan and support system to guide their educational experience. 
Of the 6,713 students in fall 2011 with less than 18 college credits, 
85 percent had a complete plan and 90 percent selected a career 
interest that they and their advisors could use to guide course 
planning.
    what steps has tcc taken in the area of articulation agreements?
    TCC has vibrant articulation agreements with each of the three 
local school districts in our service area. In addition to dual 
enrollment agreements, we also collaborate on career course 
articulation. Currently we articulate high school certifications to 
college-level credit in 17 areas ranging from carpentry to digital 
design and web development.
    We collaborate on dual enrollment, but we also have other, regular 
meetings to ensure a smooth working relationship between the schools 
and our college. Our advisors, faculty and deans meet with high school 
teachers, guidance counselors, principals and assistant principals to 
address issues impacting student preparedness for college. In addition, 
I meet regularly with superintendents to make sure our efforts are 
supportive and aligned.
    TCC also has very active advisory boards for the AS degree and 
certificate programs. Currently, TCC has 17 advisory boards with 160 
community members who provide input on training and employment needs, 
and on the skills, knowledge and abilities that need to be taught.
       what steps has tcc taken in the area of transfer policies?
    A critical quality indicator at TCC is the number of students who 
transfer to 4-year institutions. Data from the FDOE show that TCC has a 
significantly higher percentage of students (75 percent) transferring 
to 4-year institutions than the State average (60 percent). 
Articulation agreements between community colleges and State 
universities in Florida spans four decades. Common course numbering and 
enhanced articulation policies ensure students the ability to transfer 
to a State university following graduation with an AA degree from one 
of the State's 28 community colleges. Florida's seamless 2+2 higher 
education system is a model for the rest of the country.
    Our higher than average transfer rates are due to the fact that we 
do not rely passively on opportunities for students to transfer. We 
work closely with our two local State University System (SUS) 
institutions, Florida State University (FSU) and Florida Agricultural 
and Mechanical University, as well as institutions around the State. 
Specifically, we have provided office space in the Student Union for 
our two local institutions to allow our students access to university 
advisors. Students are able to discuss upper division majors and 
specific prerequisites that will prepare them to transfer with 
appropriate background coursework. The relationship with our sister 
institutions helps our students avoid taking excess courses, transfer 
with junior status, and is a cost savings to students who are able to 
follow the exact course of study as a native student.
    However, what makes us unique are the five private 4-year 
institutions we house on our campus to give our students more transfer 
choices. We established a University Center on campus where students 
can continue their education at any of five private upper division 
colleges and universities. This gives our students an on-campus 
alternative to complete a bachelor's degree, specifically in Education 
and Business, two areas that have limited access in the SUS. The 
greater transfer opportunities expand the pool of students who can take 
advantage of this cost-saving approach, and also saves students the 
expense of relocating when transferring.
        what steps has tcc taken in the area of dual enrollment?
    TCC uses several strategies to assist students who can benefit from 
acceleration mechanisms. We support Advanced Placement, International 
Baccalaureate, the College Level Examination Program, the Advanced 
International Certificate of Education, and military credits through 
prior learning assessments. We are also particularly proud of the role 
of dual enrollment in helping students accelerate their higher 
education experience before they even graduate from high school.
    We have a robust dual enrollment program and work closely with 
local schools to assure quality education for those who test college-
ready while in high school. TCC has agreements with all three public 
school districts in our service area as well as with several private 
and charter schools. In 2011-12 for example, 834 high school students 
took 7,861 credit hours from TCC. On average, these students who later 
attend TCC for college arrive with over a semester's worth of credits 
(14 credits). Further, nearly one-quarter (24 percent) of previously 
dual enrolled students attending TCC arrive with over 20 college 
credits earned at no cost to them while they were still in high school. 
This not only saves students money in tuition (roughly $100 per credit 
hour at TCC), but expedites their time to complete the baccalaureate 
degree.
    Classes are offered on high school campuses, but about 40 percent 
of the dual-enrolled students attend class either at TCC or online. 
Success rates of dual-enrolled students exceed those of native TCC 
students in the same classes, and these students succeed at equivalent 
rates to university and community college students once they 
matriculate into college.
        what steps has tcc taken in the area of course redesign?
    TCC regularly monitors success rates and curriculum as part of our 
annual assessment. We pay particular attention to the top 10 highest 
enrollment classes and to ``gateway courses.'' In both cases, the 
majority of these classes fall into the developmental education, math, 
and English course areas. However, course redesign has occurred in all 
subject areas.
    The primary assumptions of course redesign is that it will increase 
success rates and is modeled on best practices including active 
learning components such as student-faculty interaction, cooperation 
among students, student participation, prompt feedback, and time on 
task. Our course redesigns have not incurred additional costs for the 
college.
    English. TCC's College Composition course underwent a major 
redesign in 2009. The redesign resulted in a professional, collegiate 
writing focus, thus, a more rigorous curriculum. This content redesign 
was undertaken after several meetings with faculty in our primary 
transfer institution, FSU. Changes to the pedagogy and support 
materials resulted in increased success rates, despite the more 
challenging curriculum. The course success rate in fall 2011 (73 
percent) was substantially higher than rates in prior years (e.g., 66 
percent course success rate in fall 2005).
    Based on assessments of learning outcomes, redesign of the general 
education humanities courses focused on improving students' writing 
skills. Pre-test writing assessments were done in the first week; 
faculty developed videos, on-line tutorials, and used the Learning 
Commons resources to target practice and remediation based on the 
skills each student lacked. They increased journal writing and used the 
professional tutoring service Smarthinking to further assist students; 
rubrics were used to ensure standard assessment across courses and 
classes.
    Results were positive. For example, in the African-American 
Literature course, the post-test essay showed students moved from 48 
scoring a 1 or 2 to none scoring a 1 or 2, and 181 scored 5 compared to 
84 on the pre-test.
    Information Technology. In our Technology and Professional Programs 
division, courses were redesigned to include industry certifications, 
resulting in over 300 new certifications obtained by TCC students in 
the past year. In chemistry laboratories, redesign focused on 
``argument-driven inquiry'' designed to improve students' critical 
thinking skills, use of data, and research and presentation skills. All 
students made gains (6.22 points average), but the writing gains for 
typically low performing students are particularly high (11.44 points), 
measuring scores from the first report to the sixth in spring 2011.
    Math. TCC is also part of the Carnegie Statway Networked 
Improvement Community, an acceleration plan to move students from 
developmental math into statistics more quickly. Initial results are 
positive. All subject areas in developmental education have been 
redesigned over the past 3 years, emphasizing more hands-on work, more 
collaboration, and providing opportunities for acceleration. The 
redesign (funded primarily by a grant through Title III of the Higher 
Education Act) involved two levels of English, math, and reading and 
the college success course. Success rates improved in all areas except 
the lower level English class, with the average course success rate 
increasing by nearly 5 percent (the goal was 5 percent). The greatest 
success was seen in the upper level math and writing courses; these 
students are sustaining higher success rates in subsequent courses as 
well.
    Nursing. The nursing curriculum at TCC was redesigned over a period 
of 2 years using resources from the National League for Nursing; The 
Joint Commission; the Quality and Safety Education for Nurses; and the 
Florida Board of Nursing. In addition, recent graduates and local 
clinical affiliates participated in its development by providing 
feedback about the preparation of our graduates. The content of the 
curriculum is based on the National Council Licensure Examination for 
Registered Nurses (NCLEX-RN) blueprint created by the National Council 
of State Board Exams and aggregated data gleaned from the results of 
student Health and Environmental Sciences Institute (HESI) testing.
    The re-design changed the five semester program to four and moved 
to a systems approach and away from the simple to complex methodology 
the previous curriculum implemented. Faculty were evaluated and every 
attempt made to place them in courses which matched their field of 
expertise. Remediation plans were employed to improve retention, but if 
a student was unsuccessful, they were re-admitted in the next semester 
if clinical space was available, reducing the time out of the program 
for the student.
    The first class to complete the re-designed curriculum graduated in 
April 2012. Forty-two of the original 48 graduated with their initial 
cohort. Of the 39 students who have taken the NCLEX-RN test so far, the 
pass rate is almost 98 percent.
    Emergency Medical Technician (EMT). The EMT program was redesigned 
to consolidate the courses within the paramedic program to allow for 
growth in the courses in anticipation of a new national Emergency 
Medical Services (EMS) curriculum and to provide more continuity 
between EMS courses. A new national EMS curriculum was released a few 
years ago and we have been told it has been accepted by the State of 
Florida EMS Bureau. The national accrediting body is also considering 
the adoption of this curriculum as the standard. Because of the 
faculty's actions, TCC stands ready to implement the new national 
curriculum.
    Consolidation of courses will also allow for continuity between EMS 
courses taken in the same semester. Due to the broad knowledge expected 
of the paramedic in medical and traumatic emergencies, smaller credited 
courses result in silo learning--students often struggle to put all the 
pieces together in this situation. This new curriculum will force 
students to look at the patient as a whole and not just the small 
pieces they have been looking at.
    Distance Learning (DL). TCC has experienced rapid growth in student 
demand for DL classes and has worked to meet the demand. In the past 5 
years, web-delivered courses have grown from 92 sections in fall 2007 
to 192 sections in fall 2011. Enrollments have increased from 2,772 in 
fall 2007 to 5,768 in fall 2011. TCC's goal is for DL success rates to 
be equal to or greater than traditional delivery. In fall 2007, the 
overall college success rate (with a grade of A, B or C) was 67 
percent. Web course delivery rates were 65 percent. However, by fall 
2010 that gap had increased; web classes were 5 percent lower in course 
success rates. The rapid growth, expanded numbers of instructors, and 
lack of centralized policies were assessed as the issues. TCC invested 
in a new Distance Learning Center with five full-time staff. A 
mandatory, free student orientation is now required, faculty must 
follow a standard rubric, and training and retraining of faculty is 
required. Best practices have been implemented. TCC expects to see the 
gap close in 2012-13.
    I have spent the majority of my time discussing, with some degree 
of pride I must add, what Tallahassee Community College is doing to 
keep college affordable. I will conclude this testimony with a request 
for your help in the following areas. To ensure students have 
affordable access to higher education, I hope you will support the 
following:

    1. Fund the Federal Pell grant program at the full amount 
authorized. By fully funding the Federal Pell grant program students, 
particularly at-risk students, will have to borrow less. This will have 
a positive impact on default rates and will serve as an incentive for 
students who demonstrate need to begin the college process. Many of our 
low-income families are discouraged by the prospect of student loans.
    2. Provide a special or expanded grant program for students who 
test into remedial course work. These are our most at-risk students 
whose possibility of success is low, yet deserve the opportunity to 
improve skills and realize the American dream. Most of these students 
are served by community colleges.
    3. We appreciate congressional support in extending the 3.4 percent 
rate on subsidized student loans. Please ensure the loan interest rates 
are always at the lowest rate possible.
    4. Limit borrowing by students in certificate and 2-year programs 
to 60 percent of the aggregate loan limit. This will limit students' 
debt burden. Exceptions can be provided for students who finish one 
certificate or 2-year programs and seek to enter a new program.
    5. Work collaboratively with the U.S. Department of Education to 
identify strategies to address the unique nature of borrowing by at-
risk populations.
    6. Recognize and support institutions who seek to keep tuition 
affordable.

    Mr. Chairman, Ranking Member and distinguished members of this 
committee, I will conclude by once again thanking you for the important 
work you are doing to help make college affordable and for allowing me 
to contribute to your efforts in some small way. I look forward to any 
questions you might have.

    The Chairman. Thank you very much, Dr. Murdaugh.
    And now we turn to Mr. Snyder, Thomas Snyder, and welcome. 
Please proceed.

 STATEMENT OF THOMAS J. SNYDER, PRESIDENT, IVY TECH COMMUNITY 
                    COLLEGE, BLOOMINGTON, IN

    Mr. Snyder. Thank you very much. Mr. Chairman, Ranking 
Member Enzi, distinguished committee members.
    Ivy Tech is a statewide community college in Indiana 
serving 200,000 students, 23 campuses, and 100 learning 
centers.
    I would like to start by thanking the committee for its 
leadership in maintaining low student loan interest rates. The 
millions of community college students who attend our 
institutions appreciate the continuation of these low interest 
rates for the coming year.
    I also want to thank the members of the committee, and 
especially you, Mr. Chairman, for your support of Pell grants. 
Community colleges need to have a strong partnership with the 
Federal Government and input on Pell grants as they are 
particularly critical to the students attending our 
institutions.
    Pell grants, and low interest rates, are only part of the 
college cost concerns of our students and their families. We 
must have low cost, high quality options for individual 
students, the economy, and our Nation's competitiveness as a 
whole.
    As a former auto industry executive, I have watched how 
companies have gained shares of businesses by providing high 
quality product at low cost. I witnessed the emergence of 
Toyota and the Japanese auto industry, the Hyundai and the 
Korean car industry, and now China where the most popular car 
is, surprisingly, a Buick. This is a business model that is 
highly competitive, outcome and value-driven, customer-focused, 
and a relentless pursuit of lower costs.
    What I found in higher education was something quite 
different. Large grants, State subsidies combined with routine 
increase in tuitions, and a revenue model that outpaced 
inflation by a significant amount with little focus on actual 
cost.
    When I joined Ivy Tech in the summer of 2007, higher 
education did not look like a sustainable business model. 
Because of that, we made quality and efficiency pillars in our 
strategic plan, and started to reduce internal costs and 
improve outcomes. Let me share some examples.
    We instituted a single bookstore for all of our campuses, 
capped the number of textbooks that are required for both 
online and in-present courses. One unified bookstore with 
greater purchasing power has translated into fewer and less 
costly textbooks for our students. A centralized purchasing 
system led by a single executive, statewide contracts in areas 
like computers, IT networks, furniture, copiers, 
telecommunications, and healthcare.
    This year, we joined the State of Indiana to have a single 
prescription management program for all State employees 
including higher education.
    We are simplifying our registration and financial process 
for students. Perhaps like your own experience when you had to 
go to six or seven different offices to enroll in school, we 
are building a one-stop system that allows our students to go 
to one place and do everything, saving money for Ivy Tech and 
time for the students.
    On the academic side, we have launched an accelerated 
program called ASAP. Students can get a 2-year transferable 
degree in 1 year, attending 5 days a week for 11 consecutive 
months. Initial completion rates are 75 percent, 3 times the 
national average for community colleges.
    We created one of the largest online offerings for 
community colleges in the country, reaching almost half of our 
students; 80,000 students taking an online course during the 
year.
    We are credentialing, widely, high school faculty across 
Indiana. Dual credit students now exceed 25,000 students, 
saving parents more than $12 million in tuition costs because 
they are taking courses in high school.
    We have also worked with our State legislature to ensure 
that credits transfer better. We do look at Florida as a real 
role model which we hope to emulate. We have more work to do in 
this area.
    Let me close by giving you these facts. In the past 2 years 
with the savings we have generated, the actual cost for a full-
time student at Ivy Tech has dropped in real dollars since 
2008. Affordability is today's most important question. The 
cost in this segment of society has far outstripped not only 
inflation, but the income growth of most Americans. The concern 
I have for my home State is the sad fact that the 4-year 
residential experience is out of reach for half of the Hoosier 
families. Community college is a response to this affordability 
crisis.
    We have focused in the past on low cost and open access. We 
need now to shift to a completion agenda while maintaining our 
low cost. We, the community colleges, become a critical part of 
the affordability solution, and Ivy Tech is committed to that 
goal.
    Thank you very much.
    [The prepared statement of Mr. Snyder follows:]
                 Prepared Statement of Thomas J. Snyder
                                summary
    Ivy Tech Community College is the statewide system of community 
colleges in Indiana. We are the largest singly accredited community 
college system in the country. Ivy Tech serves 200,000 students 
annually at 23 campuses and 100 learning centers.
    I am also here as a founding member of Rebuilding America's Middle 
Class (RAMC), a coalition of community colleges focused on improving 
student access and enhancing student success.
    While my testimony is specific to Ivy Tech, RAMC is working with 
other community colleges to ensure they have the necessary tools to 
produce low cost, high quality programs.
    Let me share some examples of what Ivy Tech has done to keep 
college costs down while providing high quality learning experiences.

     We reduce internal cost and complexity behind purchasing 
student textbooks by instituting a single bookstore for all of our 
colleges and capping the number of required textbooks a student must 
buy per course.
     We have also unified our overall procurement system by 
creating a centralized purchasing system led by a single executive.
     We have begun to simplify our registration and financial 
aid process for students.
     We launched the Associate Accelerated Program or ``ASAP'' 
in order to provide students with the opportunity to earn a 
transferable degree in 1 year instead of the traditional 2-year track. 
Completion rates of 75 percent in this program are three times the 
national average of community colleges.
     We actively provide dual credit programs that allow high 
school students to earn college credit at no cost. This past year, Ivy 
Tech Community College enrolled 25,429 Indiana high school students in 
dual credit programs, saving Indiana parents more than $12.2 million in 
tuition costs while allowing them to further their college education.
     We have dramatically expanded our online offerings, with 
almost 80,000 students taking courses online this past year.
     We have worked with our State legislature to ensure that 
credits which students earned at Ivy Tech transfer to the 4-year 
Indiana schools which they go on to attend.
     We set a goal of reducing costs and have done so through a 
one-time reduction of 10 percent and a recurring savings of more than 
10 percent.

    These and other efficiencies have enabled us to respond to a 45 
percent increase in enrollment over the last 4 years with limited 
additional State funding and modest tuition increases of 2 to 3 percent 
per year.
    For higher education today, affordability, while maintaining 
quality, is the most important question. Cost in higher education is 
outstripping the incomes of most Americans. Community colleges are a 
response to this crisis by focusing on maintaining low costs.
                                 ______
                                 
    Good morning. Chairman Harkin, Ranking Member Enzi, I am Tom 
Snyder, president of Ivy Tech Community College. Ivy Tech Community 
College is the statewide system of community colleges in Indiana. We 
are the largest singly accredited community college system in the 
country. Ivy Tech serves 200,000 students annually at 23 campuses and 
100 learning centers that provide a full-spectrum of educational 
resources, transfer credits, associate degrees, workforce training and 
professional certification.
    I am also here as a founding member of Rebuilding America's Middle 
Class (RAMC), a coalition of community colleges focused on improving 
student access and enhancing student success. While what I talk about 
today will be specific to Ivy Tech, RAMC is working with other 
community colleges to ensure they have the necessary tools to produce 
low cost, high quality programs. RAMC recently held a conference in 
Indianapolis that allowed community college leaders to exchange ideas 
and methods for accomplishing this very important work.
    I would like to start by thanking the committee for its leadership 
on maintaining low student-loan interest rates for this coming school 
year. RAMC wrote this committee and the congressional leadership urging 
that the 3.4 percent rate be maintained. Like you, we realize the 
impact that the cost of college is having on students all across the 
country. College presidents, as well as the millions of students who 
attend our institutions, appreciate the continuation of these low 
interest rates for this coming school year.
    I would also be remiss if I did not thank the members of this 
committee, and especially you Mr. Chairman, for your support for Pell 
grants. Community colleges need to have a strong partnership with the 
Federal Government on Pell grants as they are particularly critical to 
the students that attend our institutions. Recent changes including 
elimination of summer Pell and changes to the ability to benefit rules 
have impacted prospective students seeking to attend Ivy Tech. We look 
forward to working with you to ensure Pell remains a strong program 
that meets the needs of community college students.
    As you know, keeping interest rates low is only one part of the 
college cost pressure being placed on students, their families and 
institutions. Ensuring that we have low-cost post-secondary options 
that provide high quality learning experiences is essential for 
individual students, our economy and our Nation's competitiveness as a 
whole. As a former auto industry executive, I watched how competitors 
gained a share of the automotive business by providing a high quality 
product at a low cost. I witnessed the emergence of Toyota and the 
Japanese auto industry, Hyundai and the Korean car industry and now 
China where the most popular car is surprisingly--Buick. This is a 
business model that is highly competitive, outcome- and value-driven, 
customer-focused and has a relentless pursuit of lower cost.
    What I found in higher education was something different: large 
grants, and State subsidies, combined with routine increases in 
tuition. This was a revenue model that outpaced inflation by a 
significant amount with little focus on actual cost.
    When I joined Ivy Tech in the summer of 2007, this did not look 
like a sustainable business model.
    Because of that, we made quality and efficiency one of four pillars 
in our strategic plan and started to reduce internal cost. Let me share 
some examples.
    We have worked to reduce internal cost and complexity of what 
students must go through when they purchase their textbooks. We 
instituted a single bookstore for all of our colleges and capped the 
number of textbooks that are required for a course to three for bricks 
and mortar classes, and one for online course offerings. This has 
allowed our one unified bookstore greater purchasing power which has 
translated into fewer and less costly textbooks for students to 
purchase.
    We have also unified our overall procurement system. We have 
created a centralized purchasing system led by a single executive. 
We've instituted statewide contracts in areas like computers, IT 
networks, furniture, copiers, office supplies, telecommunications, and 
healthcare.
    This year we joined with the State of Indiana to have a single 
prescription management program for all State employees including 
higher education.
    Recently, we have begun to simplify our registration and financial 
aid process for students. Perhaps like your experience, students 
currently go to six or seven offices to enroll, receive their financial 
aid and register for classes. To respond to this, we are building a 
one-stop system that allows our students to go to one place to 
accomplish all of this. This saves money for Ivy Tech, but also makes 
it easier for students to get on with their studies.
    Ivy Tech has also launched the Associate Accelerated Program or 
``ASAP.'' This program provides students with the opportunity to earn a 
transferable degree in 1 year instead of the traditional 2-year track. 
Designed specifically for students from low-income households, ASAP 
targets students during the critical transitioning period between high 
school and college. It also includes significant wraparound services, 
which research shows greatly improve retention rates and student 
success. Students in the program attend as a cohort, enabling them to 
form a learning community and provide peer support to each other. 
Completion rates of 75 percent in this program are three times the 
national average of community colleges.
    We have dramatically expanded online offerings reaching almost half 
of our students during the year with at least one course offering. With 
almost 80,000 students taking courses online during the year, we are 
significantly increasing the flexibility of each student to complete 
more rapidly and balance work, school, and home life challenges.
    Ivy Tech also actively provides dual credit programs that allow 
high school students to earn college credit at no cost. This effort 
alone has generated huge savings for Indiana's families while also 
preparing high school students for the rigors of college. This past 
year, Ivy Tech Community College enrolled 25,429 Indiana high school 
students in dual credit programs, saving Indiana parents more than 
$12.2 million in tuition costs.
    We have also worked with our State legislature to ensure that 
credits which students earn at Ivy Tech transfer to the 4-year Indiana 
schools which they go on to attend. Nothing increases the cost of 
college more for a student than repeating courses they have taken in 
the community college that the receiving institution will not accept. 
The legislature, with our support and encouragement, has established a 
credit limit for 2- and 4-year degrees to prevent ``credit creep.'' 
Credit creep is adding one or two semesters to a 2- or 4-year degree 
without actually producing job market outcomes.
    Early in my tenure, I set a challenge goal of saving 10 percent of 
our operating cost by 2010. At the same time we wanted to become a 
national leader in the Achieving the Dream program. Achieving the Dream 
is a reform network of community colleges aimed at helping low income 
and students of color complete their education and earn market-valued 
credentials.
    I am pleased to say we handily beat our cost savings goal through 
one time savings of 10 percent and recurring savings of more than 10 
percent. We also met important quality goals. Based on Achieving the 
Dream initiatives there was an increase in persistence from 55 percent-
60 percent before interventions compared with 75 percent-80 percent 
after interventions. This is an increase of almost 20 percent. We 
expect completions to go up 10 percent-15 percent as a result.
    This focus on quality and efficiency has enabled us to respond to a 
45 percent increase in enrollment over the last 4 years with limited 
additional State funding and modest tuition increases of 2 to 3 percent 
per year. In fact, due to the savings we have generated, the actual 
cost per full time student at Ivy Tech has dropped slightly in real 
dollars since 2008.
    Let me close by saying that for higher education, affordability is 
today's most important question. Cost in this segment of society has 
far outstripped not only inflation, but the income growth of most 
Americans. The concern I have for my home State, is the sad fact that 
the 4-year residential experience is out of reach for half of the 
Hoosier families. Community colleges are a response to this 
affordability crisis. We have focused on low-cost open access for 
decades. As we shift to a completion agenda, while maintaining low 
cost, we become a critical part in the affordability solution. Ivy Tech 
is committed to that goal.
    Thank you for allowing me to testify. I would be pleased to answer 
any questions you may have.

    The Chairman. Thank you, Mr. Snyder.
    Dr. Twigg, welcome and please proceed.

STATEMENT OF CAROL A. TWIGG, PRESIDENT AND CEO, NATIONAL CENTER 
             FOR ACADEMIC TRANSFORMATION, MIAMI, FL

    Ms. Twigg. Mr. Chairman and members of the committee, thank 
you for inviting me to testify.
    I am president and CEO of the National Center for Academic 
Transformation, an independent, nonprofit organization founded 
in 1993. The Center's mission is to demonstrate how effective 
use of information technology can both improve student learning 
outcomes and reduce instructional costs. We focus on 
undergraduate higher education.
    Now, everyone seems to agree that both the cost and price 
of higher education are too high. As Dr. Heller has pointed 
out, the primary driver of tuition price increases, at least at 
public institutions, has been changes in State appropriations. 
But the fact is that regardless of who pays what proportion--
States, the Federal Government, or students and their 
families--the overall cost of higher education has risen well 
beyond reason. Without improvements in the overall productivity 
of higher education, these costs and the associated prices will 
continue to rise.
    Unlike other industries where information technology has 
been used to change the way we do business, to reduce costs 
while increasing quality of service, higher education, by and 
large, has not been able to do so and I say this can be done in 
higher education as well.
    For the past 13 years, our Center has worked in partnership 
with more than 200 colleges and universities demonstrating how 
course redesign using technology can change the way they do 
business to achieve both quality improvements, as well as 
dramatic reductions in cost. Altogether, we have produced more 
than 150 large scale redesigns, which impact literally hundreds 
of thousands of students each year.
    What are the results we have achieved thus far? These 
course redesigns have reduced instructional costs by 37 percent 
on average; the savings ranging from a low of 9 percent to a 
high of 77 percent. And collectively, these redesigned courses 
produce a cost savings of about $15 million a year.
    Now, reducing instructional costs by 37 percent in higher 
education is, by itself, a significant achievement especially 
when just about everyone in higher education says it cannot be 
done. But what about quality? Each of the participating 
organizations has conducted a rigorous evaluation of student 
learning, comparing the outcomes from traditional ways of 
teaching to the redesign teaching methods. The results of those 
evaluations show that student learning outcomes have improved 
in 72 percent of the redesigns with the remaining 28 percent 
showing learning equivalents to traditional formats. Other 
positive outcomes include increased course completion rates, 
improved retention, and increased student satisfaction with the 
new mode of instruction.
    Now, I wanted to say a bit more about these redesigns. Most 
of these redesign projects focus on large enrollment 
introductory courses. Now, why did we choose such a focus? The 
reason is because undergraduate enrollments in the United 
States are concentrated, heavily, in only a few academic areas. 
In fact, just 25 courses generated about 50 percent of all 
enrollments at community colleges, and those same 25 courses 
generate about 35 percent of enrollment at 4-year institutions, 
which translates to about 42 percent of all undergraduate 
enrollments. Consequently, these 25 courses consume a 
substantial amount of institutional resources.
    In addition, completion of these courses is critical for 
student progress toward a degree, but failure rates in many of 
these courses--which range from 15 percent at our research 
universities, to 30 to 40 percent at our comprehensive 
institutions, and are as high as 50 percent at our community 
colleges--can contribute heavily to overall institutional 
dropouts between the first and second year. Making improvements 
in these key, critical courses has a direct impact on student 
retention and on-time degree completion.
    We have worked with all types of institutions, research 
universities, comprehensives, community colleges, and private 
institutions in all areas of the country to demonstrate that 
these techniques can be used across the board in higher 
education. We have also worked in all undergraduate disciplines 
to demonstrate that the redesign is applicable to all 
disciplines. My written testimony discusses in detail the 
techniques we have used to achieve these accomplishments, but I 
wanted to emphasize sort of three key ideas in our redesign 
methodology.
    The first is that the redesigns move students from a 
passive learning stance. If you think of a student sitting and 
listening to a lecture while someone is talking at them, which 
is the norm in most freshmen courses and often the cause of 
high failure rates, to a much more active engagement in 
learning.
    The second is each of these redesigns uses high quality 
interactive instructional software where appropriate in the 
learning place. Tasks that faculty members would be performing 
are offloaded to the software, and that enables them to deal 
with more students and more directly with students.
    And then finally, the redesign process methodology 
encourages college faculty and administrators to think outside 
the box, if you will. To sit down and examine who does what and 
why, and decide where they can make changes that lead to 
improved student learning and reduced instructional costs.
    And I would be happy to answer any questions that you may 
have.
    [The prepared statement of Ms. Twigg follows:]
                  Prepared Statement of Carol A. Twigg
                                Summary
    I am president and CEO of the National Center for Academic 
Transformation (NCAT). NCAT was established in 1999 as a university 
center at Rensselaer Polytechnic Institute and became an independent 
non-profit organization in 2003. NCAT's mission is to help colleges and 
universities learn how to use technology to improve student learning 
outcomes and reduce their instructional costs.
    Over the past 13 years, NCAT has worked in partnership with more 
than 200 colleges and universities, demonstrating how course redesign 
using technology can achieve both quality enhancements and cost 
savings. NCAT has conducted four national and six State-based course 
redesign programs, producing about 153 large-scale redesigns. Partner 
institutions include research universities, comprehensive universities, 
private colleges and community colleges in all regions of the United 
States.
    Redesign projects have focused primarily on large-enrollment 
introductory courses that affect significant student numbers and 
generate substantial cost savings. Why focus on such courses? Because 
undergraduate enrollments in the United States are concentrated heavily 
in only a few academic areas. In fact, just 25 courses generate about 
half of all student enrollments in community colleges and about a third 
of enrollments in 4-year institutions.
    NCAT required each partner institution to conduct a rigorous 
evaluation focused on student learning, comparing the outcomes of 
redesigned courses with those of courses with the same content 
delivered in a traditional (pre-redesign) format. Results show improved 
student learning in 72 percent of the redesigns with the remaining 28 
percent showing learning outcomes equivalent to traditional formats.
    Each redesign team was also required to develop a detailed cost 
analysis of both the traditional and the redesigned course formats 
using activity-based costing. (NCAT created a spreadsheet-based course 
planning tool to guide institutions in this process.) All redesigned 
courses have reduced cost, on average by 37 percent, ranging from 9 
percent to 77 percent.
    Other positive outcomes associated with the redesigned courses 
included increased course-completion rates, improved retention, better 
student attitudes toward the subject matter and increased student 
satisfaction with the new mode of instruction.
    NCAT's course redesign methodology is applicable to all academic 
disciplines as evidenced by the redesigns already produced: 16 in the 
humanities (developmental reading and writing, English composition, 
fine arts, history, music, Spanish, literature and women's studies); 93 
in quantitative subjects (developmental and college-level mathematics, 
statistics and computing); 23 in the social sciences (political 
science, economics, psychology and sociology); 15 in the natural 
sciences (anatomy and physiology, astronomy, biology, chemistry and 
geology); and 6 in professional studies (accounting, business, 
education, engineering and nursing).
                                 ______
                                 
    Mr. Chairman and members of the committee, thank you for inviting 
me to testify. I am president and CEO of the National Center for 
Academic Transformation (NCAT). NCAT was established in 1999 as a 
university center at Rensselaer Polytechnic Institute with funding from 
the Pew Charitable Trusts and became an independent non-profit 
organization in 2003. NCAT's mission is to help colleges and 
universities learn how to use technology to improve student learning 
outcomes and reduce their instructional costs.
    Over the past 13 years, NCAT has worked in partnership with more 
than 200 colleges and universities, demonstrating how course redesign 
using technology can achieve quality enhancements as well as cost 
savings. NCAT has conducted four national and six State-based course 
redesign programs, producing about 153 large-scale redesigns. All 
redesigned courses have reduced cost, on average by 37 percent, ranging 
from 9 percent to 77 percent. Learning outcomes improved in 72 percent 
of the redesigns with the remaining 28 percent showing learning 
equivalent to traditional formats. Partner institutions include 
research universities, comprehensive universities, private colleges and 
community colleges in all regions of the United States.
    It is important to understand what NCAT means by course redesign. 
Course redesign is the process of redesigning whole courses (rather 
than individual classes or sections) to achieve better learning 
outcomes at a lower cost by taking advantage of the capabilities of 
information technology. Course redesign is not just about putting 
courses online. It is about rethinking the way we deliver instruction 
in light of the possibilities that technology offers.
                             the challenge
    American colleges and universities continue to be challenged by the 
need to increase access to higher education, to improve the quality of 
student learning, and to control or reduce the rising cost of 
instruction. These issues are, of course, interrelated. As tuition 
costs continue to rise, access is curtailed. If the quality of the 
curriculum inhibits students from successfully completing courses and 
programs, promises of increased access become hollow.
    Solutions to these challenges appear to be interrelated as well. 
Historically, either improving quality or increasing access has meant 
increasing costs. Reducing costs, in turn, has meant cutting quality, 
access, or both. In order to sustain higher education's vitality while 
serving a growing and increasingly diverse student body, we must find a 
way to resolve this familiar--and seemingly intractable--tradeoff 
between cost and quality.
    America's colleges and universities have discovered exciting new 
ways of using technology to enhance teaching and learning and to extend 
access to new populations of students. For most institutions, however, 
new technologies represent a black hole of additional expense. This is 
because the majority of them have simply bolted new technologies onto 
an existing set of physical facilities, a faculty already in place and 
an unaltered concept of classroom instruction.
    Under these circumstances, technology becomes part of the problem 
of rising costs rather than part of the solution. In addition, 
comparative research studies show that, instead of improving quality, 
most technology-based courses produce learning outcomes that are only 
``as good as'' their traditional counterparts--what has come to be 
known as the ``no significant difference'' phenomenon. By and large, 
colleges and universities have not yet begun to realize the promise of 
technology to improve the quality of student learning, increase 
completion and reduce the costs of instruction.
                      the initial proof of concept
    Supported by an $8.8 million grant from the Pew Charitable Trusts, 
NCAT created the Program in Course Redesign (http://www.theNCAT.org/
PCR.htm) in April 1999 to address the issues discussed above. The 
program taught colleges and universities how to redesign instruction 
using technology to achieve quality enhancements as well as cost 
savings. Thirty institutions were selected to participate from hundreds 
of applicants in a national competition.
    All 30 redesign projects focused on large-enrollment introductory 
courses that have the potential to affect significant student numbers 
and generate substantial cost savings. Why focus on such courses? 
Because undergraduate enrollments in the United States are concentrated 
heavily in only a few academic areas. In fact, just 25 courses generate 
about half of all student enrollments in community colleges and about a 
third of enrollments in 4-year institutions.
    The topics of these courses are no surprise and include 
introductory studies in disciplines such as English, mathematics, 
psychology, sociology, economics, accounting, biology, and chemistry. 
Successful completion of these courses is critical for student progress 
toward a degree. But typical failure rates in many of these courses--15 
percent at research universities, 30 percent to 40 percent at 
comprehensive universities, and 50 percent to 60 percent at community 
colleges--contribute heavily to overall institutional drop-out rates 
between the first and second year.
    The insight that these figures point to is simple and compelling: 
In order to have a significant impact on large numbers of students, an 
institution should concentrate on redesigning the 25 courses in which 
most students are enrolled instead of putting a lot of energy into 
improving quality or cutting costs in disparate small-enrollment 
courses. By making improvements in a restricted number of large-
enrollment prerequisite or introductory courses, a college or 
university can literally affect every student who attends.
    The Program in Course Redesign produced many different models of 
how to restructure such courses to improve learning as well as to 
effect cost savings. In contrast to the contention that only certain 
kinds of institutions can accomplish these goals, and in only one way, 
the program demonstrated that many approaches can achieve positive 
results. And to counter the belief that only courses in a restricted 
subset of disciplines--science or math, for instance--can be 
effectively redesigned, the program comprised successful examples in 
many disciplines including the humanities, math and statistics, the 
social sciences, and the natural sciences. In each case, the whole 
course rather than a single class or section was the target of the 
redesign.
    Here is a breakdown of the 30 participating institutions by 
curricular area:
QUANTITATIVE (13)
     Mathematics: Iowa State University; Northern Arizona 
University; Rio Salado College; Riverside Community College; University 
of Alabama; University of Idaho; Virginia Polytechnic Institute and 
State University
     Statistics: Carnegie Mellon University; Ohio State 
University; Pennsylvania State University; University of Illinois at 
Urbana-Champaign
     Computer Programming: Drexel University; University at 
Buffalo
SOCIAL SCIENCE (6)
     Psychology: California State Polytechnic University, 
Pomona; University of Dayton; University of New Mexico; University of 
Southern Maine
     Sociology: Indiana University--Purdue University 
Indianapolis
     American Government: University of Central Florida
HUMANITIES (6)
     English Composition: Brigham Young University; Tallahassee 
Community College
     Spanish: Portland State University; University of 
Tennessee, Knoxville
     Fine Arts: Florida Gulf Coast University
     World Literature: University of Southern Mississippi
SCIENCE (5)
     Biology: Fairfield University; University of 
Massachusetts, Amherst
     Chemistry: University of Iowa; University of Wisconsin--
Madison
     Astronomy: University of Colorado at Boulder

    Each of the 30 participating institutions conducted a rigorous 
evaluation focused on student learning, comparing the outcomes of 
redesigned courses with those of courses with the same content 
delivered in a traditional (pre-redesign) format. Results show improved 
student learning in 25 of the 30 projects, with the remaining five 
showing learning outcomes equivalent to traditional formats.
    Each redesign team developed a detailed cost analysis of both the 
traditional and the redesigned course formats using activity-based 
costing. NCAT created a spreadsheet-based course planning tool (http://
www.theNCAT.org/PlanRes/CPTdesc.htm) to guide institutions in this 
process. Completing the course planning tool allowed faculty members to 
consider changes in specific instructional tasks, make decisions about 
how to use technology (or not) for specific tasks, visualize 
duplicative or unnecessary effort and complete a cost/benefit analysis 
regarding the right type of personnel for each instructional task. At 
the beginning of each project, baseline cost data for the traditional 
course and projected redesigned course costs were collected; actual 
redesigned course costs were collected at the end.
    Results showed that all 30 projects reduced costs by 37 percent on 
average, ranging from 15 percent to 77 percent. Other positive outcomes 
associated with the redesigned courses included increased course-
completion rates, improved retention, better student attitudes toward 
the subject matter, and increased student satisfaction with the new 
mode of instruction. Collectively, the 30 redesigned courses impacted 
more than 50,000 students and produced an annual cost savings of $3.6 
million--while simultaneously improving student-learning outcomes and 
increasing retention.
    Since developing the Program in Course Redesign, NCAT has conducted 
four national and six State-based course redesign programs, producing 
about 153 large-scale redesigns. The number of disciplines have 
multiplied, including 16 in the humanities (developmental reading and 
writing, English composition, fine arts, history, music, Spanish, 
literature and women's studies), 93 in quantitative subjects 
(developmental and college-level mathematics, statistics and 
computing), 23 in the social sciences (political science, economics, 
psychology and sociology), 15 in the natural sciences (anatomy and 
physiology, astronomy, biology, chemistry and geology) and six in 
professional studies (accounting, business, education, engineering and 
nursing).
    Detailed descriptions of each redesign project can be found on the 
NCAT Web site (http://www.theNCAT.org/PCR/Proj_Discipline_all.html).
              quality improvement strategies and successes
    Redesigned courses effect significant changes in the teaching and 
learning process, making it more active and learner-centered. The 
primary goal is to move students from a passive listening and ``note-
taking'' role to an active-learning orientation. As one math professor 
succinctly puts it, ``Students learn math by doing math, not by 
listening to someone talk about doing math.'' Lectures are replaced 
with a wide variety of learning resources, all of which involve more 
active forms of student learning or more individualized assistance. In 
moving from an entirely lecture-based to a student-engagement approach, 
student learning is less dependent on words uttered by instructors and 
more dependent on reading, exploring, and problem-solving undertaken 
actively by students themselves.
    Many of the projects have demonstrated statistically significant 
improvements in student understanding of course content by comparing 
the performance of students enrolled in traditional and redesigned 
courses on commonly administered assignments and examinations. 
Redesign-course students in statics at Mississippi State University, 
for example, performed significantly better on assignments (average 
score of 90 versus 73) and in-class tests (average score of 79 versus 
66) than their peers in the traditional group at a 95 percent 
confidence level. At Carnegie Mellon University, the performance of 
redesign-course students in statistics increased by 22.8 percent on 
tests of skills and concepts, and redesign-course students also 
demonstrated an enhanced ability to identify the appropriate 
statistical analysis to employ in a given real-world problem situation. 
At the University of Maryland Eastern Shore, the traditional and 
redesigned formats of an introductory chemistry course were taught 
using the same materials, homework assignments and exams. The number of 
students who earned a grade of C or better in the traditional course 
was 54.5 percent compared with 69.4 percent in the redesigned course.
    Other projects have shown statistically significant improvements in 
overall student understanding of course content as measured by pre-and 
post-assessments that examine key course concepts. For example, at 
Northeast State Technical Community College in Tennessee, students 
enrolled in a traditionally configured developmental reading course 
posted an 11-point improvement on the standardized Nelson Denny 
examination, while the average gain of 21 points for students in the 
redesigned course was almost double that amount. The University of 
Tennessee, Knoxville found a significant and favorable five-point 
difference between student exam scores in a redesigned Spanish course 
and those of students enrolled in traditional sections.
    Many of the projects have also reported significant improvements in 
their drop-failure-withdrawal (DFW) rates. At Arizona State University, 
the number of students earning a C or better in a computer literacy 
course increased from 26 percent in the traditional course to 65 
percent in a demonstrably more difficult course. At the University of 
Alabama, the percentage of students completing a redesigned 
intermediate algebra course with a grade of C or better improved from 
40 percent to close to 80 percent. At the University of Idaho, the 
percentage of students earning a D or failing was cut by more than 
half. Drexel University reduced its DFW rate in computer programming 
from 49 percent to 38 percent, Florida Gulf Coast University from 45 
percent to 11 percent in fine arts, Indiana University-Purdue 
University Indianapolis (IUPUI) from 39 percent to 25 percent in 
introductory sociology, and the University of New Mexico from 42 
percent to 25 percent in psychology.
    What techniques have institutions found to be the most effective in 
improving student learning? The most prominent are the following:

     Online Tutorials: In redesigned courses, web-based 
resources--either commercially produced or developed by colleges and 
universities--that support greater student engagement with the material 
replace standard presentation formats. Such resources may include 
interactive tutorials and exercises that give students needed practice; 
computerized or digitally recorded presentations and demonstrations; 
reading materials developed by instructors or in assigned textbooks; 
examples and exercises in the student's field of interest; links to 
other relevant online materials; and individual and group laboratory 
assignments.
    Ideally, materials like these are modularized and tailored to 
incorporate examples drawn from a variety of disciplines to match the 
learning circumstances of students with different professional and 
personal goals. Using modularized materials also allows changes in 
content or format if students are having difficulty understanding a 
particular part of the course.
    Building on substantial experience in using and developing 
interactive materials, the University of Wisconsin at Madison developed 
37 Web-based instructional modules in chemistry. Each module leads a 
student through a particular topic in 6 to 10 interactive pages. When 
the student has completed the tutorial, a debriefing section presents a 
series of questions that test whether the student has mastered the 
module's content. Students especially like the ability to link from a 
problem they have difficulty with directly to a tutorial that helps 
them learn the concepts needed to solve the problem.
    Virginia Tech uses a variety of web-based course-delivery 
techniques like tutorials, streaming video lectures, and lecture notes 
as tools for presenting materials in a linear algebra course. 
Consisting of concrete exercises with solutions that are explained 
through built-in video clips, such tutorials can be accessed at home or 
at a campus lab. In redesigned courses, tutorials have taken over the 
main instructional task with respect to transmitting content: 86 
percent of the students enrolled in Virginia Tech's linear algebra 
course reported that the computer presentations explain the concepts 
effectively.
     Continuous Assessment and Feedback: Shifting the 
traditional assessment approach in large introductory courses, which 
typically employ only midterm and final examinations, toward continuous 
assessment is an essential pedagogical strategy in these redesigns. 
Many of the projects include numerous computer-based assessments that 
give students instantaneous feedback on their performance. Automating 
assessment and feedback enables repeated practice as well as providing 
prompt and frequent feedback--pedagogical techniques that research 
consistently has proven to enhance learning.
    Students are regularly tested on assigned readings and homework 
using short quizzes that probe their preparedness and conceptual 
understanding. These low-stakes quizzes motivate students to keep on 
top of the course material, structure how they study and encourage them 
to spend more time on task. Online quizzing encourages a ``do it till 
you get it right'' approach: Students are allowed to take quizzes until 
they master the material.
    Quizzes also provide powerful formative feedback to both students 
and faculty members. Faculty can quickly detect areas where students 
are not grasping key concepts, enabling timely corrective intervention. 
Students receive detailed diagnostic feedback that points out why an 
incorrect response is inappropriate and directs them to material that 
needs review. For example, at the University of Northern Arizona, 
online quizzes used in a redesigned psychology course were perceived 
very favorably, as indicated by the percentage of students who agreed 
``somewhat'' or ``strongly'' that quizzes were useful (60.4 percent), 
promoted understanding of class material (61.3 percent), helped in exam 
preparation (64.8 percent), and encouraged textbook reading (71.8 
percent). Since students are required to complete quizzes before class, 
they are better prepared for higher-level activities once they get 
there. Consequently, the role of the instructor shifts from one of 
introducing basic material to reviewing and expanding what students 
have already been doing.
     Continuous Support: Various kinds of support systems 
enable students to receive help when they need it, not just when they 
go to class. Helping students feel that they are a part of a learning 
community is critical to persistence, learning, and satisfaction. 
Active mentorship of this kind can come from a variety of sources, 
allowing students to interact with the person who can provide the best 
help for the specific problem they have encountered.
    Many of the redesign projects replace lecture time with individual 
and small-group activities that take place in computer labs staffed by 
faculty, graduate teaching assistants (GTAs) and/or peer tutors. In 
several instances, increasing lab hours has enabled students to get 
access to more one-on-one assistance. Students welcome the reduction in 
lecture time and the opportunity to work in groups to apply what they 
have learned. Collaboration also triggers peer pressure within groups, 
which can be a powerful incentive for students to keep up with their 
work.
     Undergraduate Learning Assistants (ULAs): Institutions 
such as Arizona State University, SUNY Buffalo State College, Frostburg 
State University, the University at Buffalo and the University of 
Colorado-Boulder employ ULAs in lieu of GTAs. These institutions and 
others have found that ULAs turn out to be better at assisting their 
peers than GTAs because of their understanding of the course content, 
their superior communication skills, and their awareness--based on 
their own recent experience--of the many misconceptions that 
undergraduate students often hold.
    In Colorado's redesigned introductory astronomy course, the 
instructor meets weekly with the ULAs and discusses in detail what is 
working and where students are having difficulty. Feedback from these 
weekly meetings gives the instructor a much better sense of the class 
as a whole, and of the individual students in it, than would otherwise 
be possible with a class of more than 200 students.
     Increased Interaction among Students: Many redesign 
projects take advantage of the Internet's ability to support useful and 
convenient opportunities for discussion among students. Students in 
large lecture classes tend to be passive recipients of information, and 
student-to-student interaction is inhibited by class size. Through 
smaller discussion forums established online, students can participate 
actively. The University of Central Florida and IUPUI create small 
online discussion groups in which students can easily contact one 
another in their redesigned American government and introductory 
sociology courses. Students benefit from participating in the informal 
learning communities that are created in this manner. Software allows 
instructors to monitor the frequency and quality of student 
contributions to these discussions more readily and carefully than 
would be the case in a crowded classroom.

    People who are knowledgeable about proven pedagogies that improve 
student learning will find nothing surprising in the above list. Among 
the well-accepted Seven Principles for Good Practice in Undergraduate 
Education developed by Arthur W. Chickering and Zelda F. Gamson in 1987 
are such items as ``encourage active learning,'' ``give prompt 
feedback,'' ``encourage cooperation among students,'' and ``emphasize 
time on task.'' Good pedagogy in itself has nothing to do with 
technology, and we've known about good pedagogy for years. What is 
significant about the redesigns is that they are able to incorporate 
good pedagogical practice into courses with very large numbers of 
students--a task that would have been impossible without technology.
    In the traditional general chemistry course at the University of 
Iowa, for example, four GTAs used to be responsible for grading more 
than 16,000 homework assignments each term. Because of the large number 
of assignments, GTAs could only spot-grade and return a composite score 
to students. By automating the homework process through redesign, every 
problem is graded and students receive specific feedback on their 
performance. This, in turn, leads to more time on task and higher 
levels of learning. Applying technology is not beneficial without good 
pedagogy. But technology is essential to move good pedagogical practice 
to scale, where it can affect large numbers of students.
                cost reduction strategies and successes
    There are a variety of ways to reduce instructional costs. As a 
result, there are also a variety of strategies for pursuing 
instructional redesign, depending upon institutional circumstances. For 
instance, an institution may want to maintain constant enrollments 
while reducing the total amount of resources devoted to the course. 
There are two primary ways an institution can decrease costs per 
student even though the number of students enrolled in the course 
remains unchanged. First, it can use technology for those aspects of 
the course where it would be more effective, engaging faculty only in 
tasks that require faculty expertise. Cleveland State Community 
College, for example, was able to double the number of sections taught 
by faculty member in developmental mathematics without increasing 
individual workload. Second, it can transfer other tasks that are less 
academically challenging to those with a lower level of education. The 
use of ULAs described above exemplifies this approach.
    But if an institution is in a growth mode or has more demand than 
it can meet through existing course delivery, it may seek to increase 
enrollments while maintaining the same level of investment. Many 
institutions have escalating demand for particular subjects like 
business, Spanish or information technology that they cannot meet 
because they cannot hire enough faculty members. By using redesign 
techniques, they can increase the number of students they enroll in 
such courses and relieve these academic bottlenecks without changing 
associated costs. Arizona State University, for example, has been able 
to increase the annual enrollment in Organizational Management and 
Leadership from 270 students to approximately 6,500 without additional 
resources. The University of North Carolina at Chapel Hill was able to 
increase the number of students enrolled in introductory Spanish by 40 
percent while reducing the number of instructional staff in 
introductory Spanish.
    What are the most effective cost-reduction techniques used by the 
redesign projects? Since the major cost item in instruction is 
personnel, reducing the time that faculty members and other 
instructional personnel invest in the course, and transferring some of 
these tasks to technology-assisted activities are key strategies. Some 
of the more predominant cost-reduction techniques used by the projects 
include:

     Online Tutorials: Computer-based, modularized tutorials 
are designed to lead a student through a particular topic that is 
presented interactively online. When students have completed the 
tutorial, they are presented questions that test whether they have 
mastered the content of the module. Online tutorials at Wisconsin help 
structure subsequent discussion sections by raising the probability 
that students will come to class prepared to ask questions. This means 
less preparation time for instructors.
    Similar use of online tutorials have been particularly effective in 
both developmental and college-level mathematics redesign at 
institutions such as Chattanooga State Technical Community College 
(TN), Cleveland State Community College (TN), Jackson State Community 
College (TN), Louisiana State University, Manchester Community College 
(CT), the Universities of Alabama and Idaho and Virginia Tech. Off-
loading preparation time from instructors to software has enabled 
radical restructuring of teaching staff that reduces costs. Individual 
faculty members are no longer required to present the same content 
through duplicative efforts. Nor do they need to replicate exercises 
and quizzes for each section. Interactive tutorials can replace part--
and, in some cases, all--of the ``teaching'' portions of the course.
     Automated Assessment of Exercises, Quizzes, and Tests: 
Automated grading of homework exercises and problems, of low-stakes 
quizzes, and of examinations for subjects that can be assessed through 
standardized formats not only increases the level of student feedback 
but also offloads these rote activities from faculty members and other 
instructional personnel. Some of the projects use the quizzing features 
of course management systems like Blackboard. Others take advantage of 
the online quizzes and tests that are built into software like 
MyMathLab and ALEKS from textbook publishers.
    Online quizzing sharply reduces the amount of time faculty members 
or GTAs need to spend on the laborious process of preparing quizzes, 
grading them, and recording and posting the results. Automated testing 
systems that contain large numbers of questions in a data base format 
enable individualized tests to be easily generated, then quickly graded 
and returned.
     Staffing Substitutions: By constructing a support system 
that comprises various kinds of instructional personnel, institutions 
can apply the right level of human intervention to particular kinds of 
student problems. Highly trained (and expensive) faculty members are 
not needed to support all of the many tasks associated with delivering 
a course. As noted above, many universities are employing ULAs in lieu 
of GTAs as a key cost-saving device. By replacing expensive faculty 
members and graduate students with relatively inexpensive labor, an 
institution can increase the person-hours devoted to the course and at 
the same time cut costs.
    Another solution, implemented by Rio Salado College in Phoenix, is 
to employ a ``course assistant'' to address the many nonacademic 
questions that arise as any course is delivered--questions that can 
characterize up to 90 percent of staff interactions with students. This 
frees the instructor to handle more students and to concentrate on 
academic interactions rather than logistics.
     Online Course-Management Systems: Course management 
systems--software packages that are designed to help faculty members 
transfer course content to an online environment and assist them in 
administering various aspects of course delivery--play a central role 
in most of the redesigns. Some projects use commercial products like 
Blackboard; others use homegrown systems created centrally for 
campuswide use or specifically for the redesigned course. Still others 
use instructional software that includes an integrated course-
management system. Sophisticated course-management software packages 
enable faculty members to monitor student progress and performance, 
track their time on task, and intervene on an individualized basis when 
necessary.
    Course management systems can automatically generate many different 
kinds of tailored messages that provide needed information to students. 
They can also communicate automatically with students to suggest 
additional activities based on homework and quiz performance, or to 
encourage greater participation in online discussions. Using course-
management systems radically reduces the amount of time that faculty 
members typically spend in nonacademic tasks like calculating and 
recording grades, photocopying course materials, posting changes in 
schedules and course syllabi, sending out special announcements to 
students--as well as documenting course materials like syllabi, 
assignments, and examinations so that they can be used in multiple 
terms.
     Shared Resources: When an entire course (or more than one 
section) is redesigned, faculty begin by analyzing the amount of time 
that each person involved in the course spends doing each activity. 
This highly specific task analysis often uncovers instances of 
duplicated effort and can lead to shared, more efficient approaches to 
course development. The often substantial amounts of time that 
individual faculty members spend developing and revising course 
materials and preparing for classes can be reduced considerably by 
eliminating such duplications.
    For example, Penn State has constructed an easy-to-navigate Web 
site for its introductory statistics course that contains not only 
material on managing the course but also a large number of student aids 
and resources, including solutions to problems, study guides, 
supplemental reading materials for topics not otherwise treated in the 
text, and student self-assessment activities. Putting assignments, 
quizzes, exams and other course materials on a community Web site for 
the course can save a considerable amount of instructional time.
     Reduced Space Requirements: Using the Internet to deliver 
particular parts of a course as a substitute for face-to-face classroom 
instruction enables institutions to use classroom space more 
efficiently. Two or three course sections can be scheduled in the same 
classroom where only one could be scheduled before.

    With regard to cost savings, the redesign methodology is an 
unqualified success. Virtually every NCAT project has produced cost 
savings, again ranging from 9 percent to 77 percent. Some saved more 
than they planned to; others save less. Why is there such a large range 
in cost savings across the projects? Differences are directly 
attributable to the different design decisions made by the project 
teams, especially with respect to how to allocate expensive faculty 
members. Redesigns with lower savings tended to redirect, not 
reallocate, saved faculty time: They keep the total amount of faculty 
time devoted to the course constant, but they change the way faculty 
members actually spend their time (for example, interacting with 
students rather than lecturing.)
    Others substantially reduce the amount of time devoted to the 
course by non-
faculty personnel like GTAs, but keep the amount of regular faculty 
time constant. Decisions like these reduce total cost savings. By 
radically reallocating faculty time to other courses and activities, in 
contrast, Virginia Tech produced cost savings of 77 percent in its 
redesigned linear algebra course. Most projects could have saved more 
with no diminution in quality, if they had made different design 
decisions.
    By using technology-based approaches and learner-centered 
principles to redesign their courses, these pioneering institutions are 
showing us a way out of higher education's historical tradeoff between 
cost and quality. Some of them rely on asynchronous, self-paced 
learning modes, while others use traditional, synchronous classroom 
settings but with reduced student/faculty contact hours. Both 
approaches start with a careful look at how best to deploy all 
available instructional resources to achieve the desired learning 
objectives. Questioning the current credit-for-contact paradigm of 
instruction, and thinking systematically about how to produce more 
effective and efficient learning, are fundamental conditions for 
success.
                      implications for the future
    Now that it is clear that large-scale course redesign can produce 
substantial savings, an obvious question that arises is, who should 
benefit from these savings?
    Institutions that have produced savings from course redesign have 
used the savings in many different ways:

     stay in the department to support continuous improvement 
of the course and/or the redesign of other courses;
     underwrite a greater range of course offerings at the 
upper division or graduate level;
     allow the institution to accommodate greater numbers of 
students with the same resources;
     stay in the department to reduce teaching loads and to 
provide more time for research;
     allow the institution to redesign similar courses outside 
of the original department;
     enable the institution to offer distance learning courses 
that were previously impossible due to resource constraints;
     allow the institution to free up classroom space as a 
result of the reduction in face-to-face class time; and
     improve the training of part-time faculty.

    Once institutions start creating pools of surplus instructional 
resources through redesign instead of simply spending every resource 
that is available, we will be forced to rethink many of our assumptions 
about planning and budgeting. How should those funds be reallocated? 
Should the resulting extra resources, for example, be reinvested in 
ongoing course development? Should the faculty members involved in the 
redesign benefit directly as a reward for increased productivity? 
Perhaps the academic unit should capture the savings to reinvest in 
further course redesign. Or should the savings be returned to the 
institution to be reallocated for other uses? A host of institutional 
policy issues about who gets what and for what will be involved, as 
well as numerous practical matters like ensuring continuous investment 
to support the innovations that will be needed to keep generating such 
cost savings. How an institution rewards faculty and staff for 
increased productivity is also an important consideration in building 
the case for academic restructuring. Ultimately, if implemented on a 
large scale across the institution, course redesign can be an important 
tool in stopping the relentless rise in college costs.
    Higher education has traditionally assumed that high quality means 
low student-faculty ratios, and that large lecture-presentation 
techniques supported by cheap labor constitute the only viable low-cost 
alternatives. But it is now clear that course redesign using 
technology-based, learner-centered principles can offer higher 
education a way out of this historical tradeoff between cost and 
quality. New models demonstrate that it is indeed possible to improve 
learning and reduce costs at the same time. For the first time, we can 
have our cake and eat it too.

    The Chairman. Thank you very much, Dr. Twigg. Yes, I sat 
through a lot of those lectures.
    Thank you all very much. We will begin a round of 5-minute 
questions here.
    Dr. Heller, we will start with you. Your testimony explains 
that a better way to encourage access and completion is to 
focus on need-based aid. Two days ago, ``The New York Times'' 
reported that the percentage of students receiving merit aid 
grew so rapidly from 1995 to 2008 that by 2008, it was equal to 
the percentage of students receiving need-based aid. They also 
said that even public universities, despite State budget cuts, 
continued to offer merit aid to try to attract high achieving 
students without considering their financial need.
    Can you describe what we can do to encourage schools to use 
their limited resources on more need-based aid, and why it is 
important to do so? You have mentioned in your testimony that 
30 percent of grants by State, 55 percent of grants by 
institutions have no means testing.
    Why is it important, and what can we do to encourage them 
to focus more on need-based?
    Mr. Heller. Senator Harkin, if we are going to achieve 
President Obama's goal, and this is not just President Obama's 
goal, there are many organizations. The Lumina Foundation, for 
example, that has established the goal of trying to increase 
post-secondary attainment rates in the Nation. But if we are 
going to do that, we have to focus on those students who are on 
the margins of going to college, and this is predominantly low- 
and moderate-income students.
    Students from upper-middle income and upper-income 
families, we know from the data, are going to college. They are 
generally successful once they are there, and they, frankly, do 
not need assistance from the Federal Government and the State 
governments in the form of merit-based grants.
    So focusing the financial aid, particularly grants, on 
needy students is going to have the biggest bang for the buck 
whether we are talking about Federal aid, State aid, or 
institutional aid to help accomplish the goal of increasing 
attainment rates. Simply subsidizing students who would have 
gone to college anyway is not going to get any more college 
graduates for the Nation. This is why the emphasis on financial 
means testing as a way of awarding grants is so critical.
    And that ``New York Times'' article was absolutely right. 
If you go back to the 1990s, you had less than 10 percent of 
State grants and maybe about one-third of institutional grants 
were awarded based on merit without means testing, and now it 
has flipped so that well over half of the institutional grant 
dollars----
    The Chairman. Why the big shift?
    Mr. Heller. I think there are a number of reasons. A big 
reason is the competitiveness among institutions. Institutions 
have realized that if they use their financial aid, not to 
ensure that poor students can make it to college, but instead 
to try to attract high achieving academic students which, 
unfortunately in this country, come predominantly from upper 
income families because of the relationship between class, 
social class, and performance on the kinds of tests that are 
used to award merit grants, whether it is an SAT, or ACT, or 
even just high school grades.
    Because of that relationship, when you use merit rather 
than means testing, you are going to give more money to higher 
income students. I think that has been a big driver for why you 
are seeing institutions get into the enrollment management 
business with grants, rather than ensuring college access for 
financially needy students.
    The Chairman. Thank you.
    Dr. Leath, getting to the debt and the loans, I was 
surprised. I read in the ``Des Moines Register'' in May that 
you had surveyed your students, found that 1 in 8 do not 
realize they owe student loans, while 2 in 5 do not realize how 
much they owe. So this is great to get this data, and I suspect 
this is pervasive on campuses throughout the Nation.
    How do we explain such misunderstanding and misinformation? 
What do we need to do to reverse this trend? Dr. Murdaugh 
mentioned that at Tallahassee, if the student borrows more than 
$13,000 they do not get any new awards until they sit down with 
financial counseling or something like that.
    Is this something we need to do?
    Mr. Leath. We found we definitely need to do it. The fact 
that 40 percent of our students did not know how much they owe 
is alarming, and some of this comes from the fact they have had 
no financial literacy before they got to school. Their parents 
handled all finances for them. They did not see those numbers 
constantly in front of them of what their obligation would be 
when they finish. So a couple of things we have done.
    One is to give them those numbers at every tuition bill 
now, so they know how indebted they are, what their interest 
will be, how much they will owe when they finish.
    But we partner very closely with the government of the 
student body, and Jared Knight, our university president for 
the students, is onboard to push this financial literacy 
program. It is one of only a handful in the country. It is 
being very well received. It is making a huge difference. The 
students are responsive.
    I think nationwide, the more financial literacy we can give 
our students early in their college career, the better off they 
are going to be, not only in college, but really, in life.
    The Chairman. Now, you said Iowa State is one of only five 
major colleges with a full-time financial counseling clinic. Is 
that having some effect?
    Mr. Leath. That is having a huge effect because as related 
to that clinic, we are teaching a course similar to the one we 
teach like on alcohol awareness to incoming freshmen. When they 
adjust to college life and being away from home, there are a 
number of things that they need to be educated on in terms of 
personal responsibility, whether it is alcohol or whether it is 
financial responsibility, and these are making a huge 
difference.
    The Chairman. Very good. I have more questions, but my time 
is up.
    I will yield to Senator Enzi.
    Senator Enzi. Thank you.
    Dr. Leath, you mentioned that you worked two jobs through 
college. I am curious if you, and Dr. Murdaugh, and President 
Snyder find as many kids working today in school?
    Mr. Leath. No, I think there is a tendency right now with a 
lot of parents to give their children as many opportunities as 
possible, and they tend to not be work opportunities.
    We are blessed in Iowa that we still have a large number of 
our students come from farm families where they have worked, 
and they have a great work ethic, and that is probably one of 
the reasons we are placing 98 percent of our agriculture 
students when they graduate because of that work ethic.
    But if we could tie some of our financial aid to programs 
like work-study programs and co-ops, I think we would be better 
off because we would lower student debt. We would give them 
work experience and a work ethic. It is a bigger problem in a 
lot of schools than Iowa State, but it is a problem everywhere.
    Senator Enzi. Dr. Murdaugh.
    Mr. Murdaugh. Yes, Senator. I think you would find that, in 
general, the experience is different across community colleges 
where a significant percentage of our students are, in fact, 
working and coming to school part-time. I think you would find, 
in general, it is a very distinct difference between community 
college demographics and university demographics.
    Senator Enzi. Do you find that, too, Mr. Snyder?
    Mr. Snyder. Yes, we do. In fact, Stan Jones who testified, 
I think, earlier on the Hill this week talked about the 
traditional student who was going to a residential school is 
not traditional anymore; that it is like 25 percent. About 70 
percent of our students work and go to school part-time.
    The accelerated program that I mentioned, which deals with 
young high school graduates, they actually sign a pledge not to 
work for that first year, and we find that that has a huge 
boost in completion rates. But it is really a matter of family 
access to costs and what they can really afford.
    Senator Enzi. Each of you three presidents mentioned the 
importance of the Pell grant program. And as you are well 
aware, a number of changes have been made to the Federal 
student aid programs over the last 3 years to preserve that 
maximum Pell grant.
    How have these changes impacted your institutions, and how 
have they impacted student completion?
    Mr. Snyder. I think for community colleges what we see 
going forward is that if Pell is roughly equivalent to free and 
reduced lunch, it is a little bit lower. If 50 percent of the 
country is going to be Pell eligible and if that is the case, 
it is not sustainable without rethinking it, and we believe 
that.
    I think community colleges, and this group that I am part 
of, RAMC, want to help you have a seat at the table and think 
through that. We are nipping around the edges of Pell, and 
perhaps that hurts our students because we are a bit more of 
the edges than other institutions.
    Going forward, we recognize we have to clearly think about 
this if we are going to reach the attainment levels of Korea 
and Canada.
    Senator Enzi. Thank you.
    Dr. Murdaugh.
    Mr. Murdaugh. Yes, sir.
    We have seen a dramatic increase in the number of students, 
the percentage of students, in fact, that are benefiting from 
Pell.
    I would share the comment that the sustainability of the 
model needs to be reviewed, but I must tell you that it is 
changing real peoples' lives. And while we, at the 
institutional level, can control tuition price in collaboration 
with our legislatures, hopefully, at the end of the day, you 
are making a real difference in real peoples' lives through the 
funding of Pell.
    Senator Enzi. And at 4-year institutions?
    Mr. Leath. We have about 26 percent of our students on Pell 
grants, and they have been extremely helpful, and they will 
continue to be, especially as affordability has been an issue 
in a down economy.
    We have had quite a bit of pushback and lack of 
understanding of why students could not participate in the 
summer like they used to. We got quite a bit of pushback in an 
agrarian State like Iowa that professional students, like our 
veterinary students, are no longer eligible.
    We understand some of the realities of the money and the 
funding, but some liberalization of terms would certainly be 
helpful for our students.
    Senator Enzi. Thank you.
    Dr. Twigg, could you go into just a little bit more how 
this redesign works? You gave the results, but a little bit 
more of what it is all about, how the technology works.
    Ms. Twigg. Certainly. What happens in the redesign process 
is that the course that is taught as a whole is redesigned by a 
group of faculty members.
    So if, say, LSU offers 40 sections of college algebra, they 
work on the course as a whole, and start to say, ``Well, does 
every professor have to do the same thing: stand up and talk, 
develop a syllabus, teach the problem, grade the tests, make up 
the tests?'', et cetera, etc. There are some things the 
technology could do better.
    Currently on the market, there are a lot of very 
sophisticated instructional software programs, particularly in 
mathematics and the sciences. And, in essence, they present the 
material to students, give them examples, give them practice 
quizzes, show them what they are doing wrong, tell them where 
they need to remediate. And so, they can work through this 
software, gaining help from the teacher when needed to 
intervene. But it offloads a lot of the tasks that individual 
professors would be doing one by one, and the professor becomes 
more of a monitor of student progress, a helper intervening 
when necessary.
    And so, since so many of the tasks that the professor used 
to do individually is being done by the software, just think 
about grading, for example. It then allows the professor to 
handle, in some cases, twice as many students while still not 
working harder. It is an application of using the technology in 
the teaching process. Does that make sense?
    Senator Enzi. It does. Thank you, and I will study that a 
little bit more, and I will have some more questions for all of 
you.
    A big question we all have is how Federal regulation is 
affecting what you are doing, but I suspect that Senator 
Alexander will cover a little bit of that in his opportunity.
    The Chairman. Thank you.
    Senator Bingaman.

                     Statement of Senator Bingaman

    Senator Bingaman. Thank you all for your testimony.
    Let me followup with this issue of the redesign of these 
courses that Dr. Twigg has been talking about. We have had at 
the University of New Mexico a grant, I gather, from your 
organization and it has allowed us to put in place our redesign 
of the first year psychology course, which has been very 
successful. Students are doing better than they ever did, and 
everyone is learning more, and enjoying it.
    The obvious question that occurs to me is that technology, 
I think, has changed a lot of things in our society and it 
seems to me we are just now beginning to see the potential 
impact of technology in higher education.
    If you have a group of faculty, from wherever, get together 
and design a course in introductory psychology or any other 
subject, why is not that course appropriate to be offered 
online everywhere in the country at that point? Why should the 
University of Tennessee do a version of that, and the 
University of New Mexico do a different version, and the 
University of Iowa do a different version? I mean, if they want 
to change it or add bells and whistles on it, fine.
    But why are not all of the schools in the country that are 
offering a course in introductory psychology using that basic 
redesigned course, Dr. Twigg?
    Ms. Twigg. It might not surprise you to know that I get 
asked that question quite frequently.
    Just to give you an idea of the diversity in general 
psychology, there are 72 general psychology textbooks on the 
market today; 72. Now, that is a pretty big number for a 
subject most of us would think is quite similar. But there are 
differences within general psychology, what people want to 
emphasize, what the level of the students are. So there are 
reasons for the diversity.
    However, one of the big contributions of instructional 
software, which is becoming much, much more prevalent, is 
commercial textbook publishers are creating software as well as 
individual companies. It is that they create materials that are 
much more able to be used widely; they are not as specific as 
textbooks. A community college can use the same piece of 
software that the University of New Mexico can use, and that is 
making a major contribution.
    Once you have software playing such a big part, in many 
ways, these courses are being replicated. All these things have 
individual instructors in the place where the students are to 
keep them on-task, and mentor them, et cetera. But all that 
development work that goes on is a waste of time in many of 
these intro courses that can be mitigated by those packages.
    Senator Bingaman. You indicated there are 25 courses that 
account for 42 percent of the instruction that goes on in 
universities. It would seem that you could have the best 
designed course that we could come up with, ``we'' as a 
country, could come up with for each of those 25, and have that 
available online to be used by any institution in the country.
    Ms. Twigg. There is a second part of it, though, that is 
really critical because a lot of people are talking about 
creating free courses, and this is going to solve the problem. 
The materials that are created are essential, but also 
important is the way in which the materials are used.
    In other words, you can have one set of course materials, 
and if the faculty member just says to the students, ``Well, go 
off and study it, and I hope you do well,'' and pays no 
attention, chances are the students are not going to do well. 
But if they structure the course and he is interacting with the 
students using those materials, that is where you see the gains 
in learning.
    It is more than just the course materials. It is really the 
pedagogy that surrounds the teaching, and that is something 
that is quite new for most college faculty. That is why these 
redesigns, while they have been spreading across the country, 
we have 153 not 1,053.
    Senator Bingaman. Mr. Snyder, I think you indicated you 
have 100 learning centers in your----
    Mr. Snyder. Right. We have about 40 locations where you can 
pursue a degree, and then we are teaching at satellite 
facilities in 60 others.
    Senator Bingaman. OK. Now how does the use of online 
instructions like we have been discussing here, how does that 
work in the context of your school?
    Mr. Snyder. We are unique, and that is, we are a statewide 
college. We are essentially just one college regardless of 
where you go.
    So what you talk about in terms of why can there just be 
one course that everybody takes? That happens in Indiana. We 
limit face-to-face courses to three books and online courses to 
one book, and a student can signup online and receive 
instruction from any professor anywhere in the State, although 
we encourage them to get their counseling at home.
    We think online is a perfect fit, and there has to be a 
certain amount of preparatory work. We actually have a program 
called Smarter Measure, which we are going to make widely 
available that will help you, as a student, determine: are you 
capable of navigating an online IT system? But we think online 
will be prevalent.
    We are a big partner with Western Governors, which is a 
totally online university. It is very forward-thinking and we 
are trying to learn as much from them, although we are probably 
the largest online community college provider in the country 
and offer it across State borders.
    Senator Bingaman. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Alexander.

                     Statement of Senator Alexander

    Senator Alexander. Thanks, Mr. Chairman. I want to thank 
Senator Harkin for this hearing, and even the constructive way 
that it has been conducted, and such a distinguished group of 
witnesses for coming.
    I have been asked, ``What is more difficult, being a 
Governor, or a member of a president's cabinet, or a university 
president?'' And my answer always is, ``Obviously, you have 
never been a university president or you would not ask a 
question like that.'' So I share your, I understand what you 
are doing.
    Dean Heller said that it is unquestioned that the change in 
State funding is the principle reason for the rise in tuition.
    And Dr. Leath remembered that in 1981, I believe it was 
you, 75 percent in Iowa, the State paid the cost of a student 
going to Iowa State and the students paid the other part. That 
was true in Tennessee in 1981. I was Governor then. It was 70/
30. And we had a deal with the students, ``If we increase 
tuition by 2 percent, we will increase the State funding by 2 
percent,'' that is what we did. And today, it is just the 
reverse in our State, as it is just reversed in your State 
based on what you said.
    But I did not hear any of you say what you think is the 
principle reason why States have failed to fund higher 
education as well today as they did 30 years ago. Anyone want 
to say what that is?
    Mr. Heller. Sure, Senator Alexander. I have actually 
written about this a lot because this question comes up. Why 
have States been disinvesting in higher education when we can 
all sit here and talk about the great benefits of higher 
education both to individuals, as well as to the Nation?
    I think the primary reason is because of politics, not 
economics. That both legislatures and Governors have discovered 
that public higher education institutions are one of the few 
sectors of State government that have the ability, as well as 
the willingness, to raise sufficient revenues on their own. 
With the exception of toll roads, perhaps, there are not other 
parts of State government that have that ability to raise their 
own revenues and fund their own operations. And in most States, 
we have very smart legislators and very smart Governors who 
have discovered this. They found out that as they cut 
appropriations or they let them grow not as fast as they had in 
the past, the universities do not shutdown, they maintain 
quality, and they do so primarily by raising tuition, as well 
as looking for additional sources of revenue.
    Senator Alexander. Any other ideas about that?
    Mr. Snyder. I have a slightly different view having looked 
at it when I came in.
    No. 1, Indiana kept funding, pretty generously, the 
university system until 2008-9, until State budgets forced them 
to rethink that. In the course of that, we are now moving to 
performance funding, and that is, it is going to be based on 
outcomes instead of just enrollment, which it was, and I think 
that we are one of a handful of States starting to move in that 
direction.
    It seems to me that when you contrast what is going on in 
other institutions compared to the community colleges, the 
community colleges, really--because of the network and the 
local support--kept their tuition increases quite low. Such 
that a community college can deliver the first 2 years 
transferrable almost anywhere, the first 2 years of college, 
for between $6,000 and $10,000; maybe between $5,000 and 
$10,000.
    The actual book cost of delivering the first 2 years could 
be based on the community college, and anything above that is 
based on institutional costs that do not really relate to the 
delivery of the first 2 years.
    Senator Alexander. I only have 1 minute left. Let me use it 
in this way, if I may, without interrupting.
    I have my own view of the real reason, and I am pretty sure 
of it having watched it over that period of time, and it did 
not start with President Obama, and it did not even start with 
President George W. Bush, and it is a single word. It is 
Medicaid.
    I mean, 30 years ago, State budgets were 8 percent 
Medicaid; today, they are 25 percent. And I know from my own 
experience as you go down to the end of the budget process, you 
really, after you fund highways with the road tax, and the 
courts run a certain number of things, you get down to two pots 
of money. It is higher education or it is Medicaid. And as long 
as the Federal Government requires States to continue to fund 
Medicaid in a preferential way, public higher education, in my 
own view, is going to be seriously damaged.
    This is a longer discussion, but it is an important 
discussion, and maybe you can come back to it during this time. 
But despite all the innovative things you can do with 3-year 
degrees, or 2-year, or 1-year degrees, or operating in the 
summer, it seems to me that unless we unleash the States from 
Federal Medicaid requirements that our public research 
universities, our comprehensive universities, and our community 
colleges will continue to be underfunded, and tuition will go 
up, and loans will go up. And I think that increase from 8 
percent to 25 percent of the State budgets is, by far, the 
principle reason.
    Thank you, Mr. Chairman.
    The Chairman. I might add, Senator Alexander, I will just 
throw in here.
    I have had numerous town meetings in Iowa over the last 20 
years or so, it has come up time and time again about funding 
for higher education, and what I have heard people say is,

          ``Well, you know, we have put all the money into Iowa 
        State and Iowa, and educate those kids, and they go to 
        California, they go to Texas, or Colorado, or Florida, 
        or someplace like that. We are not seeing the benefit 
        of it.''

    This has popped up at town meetings I have had for a long 
time, and I wonder how much that seeps through legislative 
thinking. I do not know. I know that I have heard that before.
    Senator Alexander. I think one reason for the increase in 
scholarships like the HOPE Scholarship or broad-based merit 
scholarships which, in Tennessee will give every student, who 
makes an ``A'' or a ``B,'' $4,000 to go to a Tennessee 
institution, is the hope that having gone to the University of 
Tennessee, they will stay in Tennessee, which I think is a 
valid goal. It started in Georgia and it makes a difference. 
But that is an interesting observation.
    The Chairman. Thank you very much.
    Senator Merkley.
    Senator Merkley. Thank you, Mr. Chair.
    The Chairman. I am sorry. Senator Franken was next. I 
apologize. I got out of line. Senator Franken.
    Senator Merkley. I withdraw my thank you.
    [Laughter.]
    The Chairman. I did not look at my list here.

                      Statement of Senator Franken

    Senator Franken. Yes, well, I will take his thank you and I 
will raise it one.
    Dr. Leath, you have testified about some of the information 
that Iowa State University includes on its financial aid award 
letters, including information about a student's current 
indebtedness and the amounts of their loan repayment after 
school.
    Can you explain why you feel it is so important to include 
this type of information in award letters?
    Mr. Leath. There are a couple of reasons. One of the things 
we try and do is educate our students beyond the actual 
material in the classroom; in other words, make them better 
citizens. And it is hard to get this level of personal 
responsibility if they are not well-informed in these areas.
    And as we have shown by our data, the kids coming in do not 
understand personal financial commitments or even their 
obligations. To be good citizens and managing money well, we 
have got to do this.
    The other thing is we think it can have a significant role 
in driving down indebtedness just through the educational 
process. We are finding the students that go through these 
programs, and see the numbers in front of them tend to borrow 
less after the program.
    Senator Franken. I agree with you. Unfortunately, not every 
school is moving to include this type of important information 
on their financial aid award letters. In fact, some school's 
letters do not even distinguish between grants and loans.
    I have seen letters where they have a Stafford Loan just 
like some code. They do not even say it is a loan. It looks for 
all purposes, especially when it is an award letter. The word 
``award,'' you usually do not pay interest on an award.
    I recently introduced a bill to require universities to use 
a universal financial aid award letter that would include some 
of the information that you highlighted in your testimony. And 
this bill will help students have accurate information on the 
true cost of college.
    Do you see value in directing other schools to do what you 
have done with financial aid award letters so that they can 
really, the student can judge apples to apples and oranges to 
oranges?
    Mr. Leath. Absolutely, I think we have put huge emphasis on 
it, and we have seen results. But yet, our students who take 
our financial literacy program are still sometimes confused 
comparing obligations or possibilities at Iowa State to other 
schools because not everyone uses the same language or the same 
terms.
    I think it would be a great service. It is, maybe, 
unfortunate we have to legislate it, but it would be valuable.
    Senator Franken. Yes, well I think we do have to legislate 
it.
    President Snyder, aligning education with workforce needs 
is critical. I think more students would be willing to go to 
college if they had a clearer sense that a degree would lead 
them to a job.
    Can you talk about the work that you have done to align 
college and workforce needs, and what the Federal Government 
can do to support alignment between schools, and industry, and 
workforce boards?
    Mr. Snyder. Now, I think that is a critical question.
    Community colleges, as a unique part of higher education, 
are partners with WorkOne across the country. They are partners 
with the employers. Virtually every community college program 
in every college, in every community in the country has a 
program like industrial technology that has an industry 
advisory board. That is virtually the pattern, which is unique. 
That means there are actually local leaders that are part of 
that. We think that is a critical element.
    We started a program--Senator Alexander just left--that 
clearly mimics the Tennessee Technology Centers, which we think 
are probably one of the best examples, particularly for 
employees that want to think about a job, where you can start 
with the end in mind, and the end may only take 1 year to get 
to an industry-
recognized certificate. Which is another key element community 
colleges do, and that is 1-year industry certificates that are 
a first step in a 2-year degree.
    I think partnership with WorkOne, some rethinking of we as 
it makes it more responsive, and the local WorkOne boards being 
more focused on training. And then more visibility in these 
programs like the Tennessee Technology Center, which in Indiana 
we call the Ivy Institute of Technology. But it is clearly a 
lift from what they are doing.
    Those are the things that I think you actually have to 
demand the community colleges to do. It is your best workforce 
development tool because that is what we do. We tend to be 
underfunded because of the pockets that we come from and 
because we keep the costs low. But I think that there is huge 
entrepreneurial spirit in each community college president to 
keep doing this.
    Senator Franken. I think people are. There is a tendency 
toward this around the country, I believe. And I know I am 
trying to get it done in Minnesota and they are doing it.
    I would like to say to the Chairman and the Ranking Member 
that we have reauthorization, I think, would be a very timely 
thing in terms of being able to coordinate between the 
industry, the workforce boards, and the colleges, and the 2-
year colleges.
    Thank you, Mr. Chairman. I have to go back to Judiciary.
    The Chairman. Thank you, Senator Franken.
    Senator Merkley.

                      Statement of Senator Merkley

    Senator Merkley. Thank you, Mr. Chair.
    I see a lot of young folks here attending the hearing 
today. I thought I would ask for you to raise your hand if you 
have college debt and you are kind of worried about the way 
that affects your future? Wow. Yes.
    This is a major stress and I feel like I was very fortunate 
in college to have minimal loans coming out. My parents did not 
want me to work the first year. The school did not want me to 
work the first year to make that adjustment to college, but I 
worked a lot in the following 3 years. But there are so many 
students who find that they have to dropout of college.
    I was interviewing someone for my staff yesterday who was 
talking about a family member, a brother, I believe it was, who 
had gone for a year, and then had to dropout, and work for a 
year to try to get the tuition to go back to community college. 
And in this work environment, it is pretty hard to just make 
ends meet, let alone save the money to return to college. So, 
then we end up with this prolonged period, and a lot of folks 
just simply do not make it back to fulfill the opportunity, or 
to fulfill the vision that they had, to fulfill their 
potential.
    Dr. Heller, you mentioned this early Federal Pell grant 
commitment demonstration program, and the concept behind it is 
a message, ``You will be able to afford college, and therefore 
utilize your high school experience productively because there 
is a future for you.'' Now you talked about the need to fund 
this.
    Has it been funded at all, and do we have any results as a 
model, or is this a vision that has yet to be experimented 
with?
    Mr. Heller. My understanding is that it has not yet been 
funded. It was included in the reauthorization, but it has not 
yet been funded, and I do not believe the administration has 
yet included it in its request.
    Senator Merkley. I think it is a powerful concept. We know 
that in some cases philanthropists have talked to kids in lower 
income areas, and adopted classrooms, and said, ``We will fund 
your college.'' And so kids from grade one know that that is a 
possibility.
    I come from a working class family where nobody had ever 
gone to college, but my parents said, ``We will figure it 
out.'' So I always had it in the back of my mind that, yes, 
somehow we would make that happen.
    That is not something that is in the back of the mind of 
many students across America, and I think your idea is a very 
good one, and worth our exploring. I appreciate that.
    Dr. Leath, you talked about financial literacy. When I was 
in the State legislature, I pushed to make a financial literacy 
course a required part of a high school education. What I saw 
was a world that was much more complicated than it was 30 years 
ago.
    When I got out of graduate school and came here to DC to 
work at the Department of Defense, I was turned down for a 
credit card because I did not have 2 years of work experience. 
Now it is like my dog gets applications almost daily, my 
children get applications. We have all sorts of high interest 
payday loans, and title loans, and even the school scholarships 
that, certainly, a lot of folks do not even know they have them 
as has been testified, and do not understand that they cannot 
be relieved by bankruptcy, that you are basically on the hook. 
You better make sure every dollar is well spent.
    Do we need to have more financial literacy to prepare our 
children in high school to go into college and into life being 
able to manage their finances more effectively?
    Mr. Leath. We would certainly be supportive.
    In some ways, when we started these programs, they almost 
seemed like they were remedial because you would expect people 
as smart as our college students are and seemingly mature, that 
they would be at a higher level of knowledge on financial 
literacy. That is why we instituted the program. If they came 
better prepared, we would be delighted.
    Senator Merkley. I think it is worth continuing that 
conversation.
    I want to turn to the growing examples of free university 
courses. Public radio had a segment about Coursera this last 
week where a number of universities have worked together to 
create free online courses. And I understand someone who was 
involved at Stanford and Google has left to create a company 
called Udacity that provides free online courses.
    But I think even though they are participating in providing 
these courses as an opportunity for education, there is not a 
system in which other schools will accept credits from folks 
who take these.
    Is that something that should be explored? It is great to 
have these terrific online courses, but is there a problem in 
terms of universities being willing to accept them as a source 
of education? I see, Dr. Twigg, you are nodding your head. Do 
you want to address that?
    Ms. Twigg. Yes, I think that there is a problem.
    These courses are really more like continuing education 
courses in that they are not awarding college credit, and you 
cannot apply completion of them for a degree. In many cases 
what they are, are simply videotape lectures of professors' 
classes being put up on the Internet.
    You have heard of these things called MOOC's, which are 
these mass online courses. One of these Stanford professors did 
this. He had 160,000 students, primarily students in other 
countries. It really remains to be seen whether this idea has 
any real applicability to American college students.
    Senator Merkley. I am 20 seconds out of time. There is so 
much more I would like to ask. This is such an important issue 
for our future.
    One of the things that deeply disturbs me is that we are 
becoming the first generation of parents whose children are 
getting less education than we got. I saw the statistics here 
in the materials that for the first time in history a 
generation of Oregonians, my State, age 55 to 64 are better 
educated than their 25- to 34-year-old counterparts; that is, 
33 percent versus 27 percent, of having a bachelor's degree. 
This is a knowledge economy world. This is a terrible 
statistic. We should all be deeply concerned about it and the 
costs that we are discussing today are a huge part of this 
problem.
    I really appreciate you all participating in this as we 
ponder how to take on this important problem.
    The Chairman. Thank you, Senator Merkley.
    Senator Hagan.

                       Statement of Senator Hagan

    Senator Hagan. Thank you, Mr. Chairman, and thank you so 
much for holding this hearing.
    Even though Dr. Leath is representing Iowa State, I am 
happy to see him here today. Prior to becoming president of 
Iowa State, Dr. Leath served as the vice president for research 
for the UNC System, and our UNC System comprises 16 
universities across the State. I was also happy to read in your 
testimony that Iowa State and NC State are neck and neck among 
their peer institutions for having the lowest tuition and fees 
for undergraduate students.
    In North Carolina, we have a long history of providing 
academic excellence at affordable prices. In fact, despite 
State budget constraints, the University of North Carolina 
System schools continue to be a great value in terms of 
providing a quality education for a reasonable price compared 
to many other colleges and universities across the country.
    In 2006, the former president of our UNC System, Erskine 
Bowles, established the President's Advisory Committee on 
Efficiency and Effectiveness; it was called PACE. It was tasked 
not only with performing a comprehensive review of the UNC 
System schools, all 16 of them, and in making recommendations 
for how they can operate more efficiently, but also to 
establish principles promoting continuous identification and 
implementation of efficiency practices moving forward.
    Additionally, the UNC at Chapel Hill launched a study that 
was titled ``Carolina Counts,'' and that was a campus-wide 
initiative to make operations more efficient. And through 
Carolina Counts, Chapel Hill has identified and implemented $50 
million in permanent administrative savings, and serves as a 
way to help the institution wisely implement these budget 
reductions going forward.
    I think there are some positive things that can be done, 
but we also are very concerned about the budget issues 
affecting higher education today.
    Dr. Leath, I know Senator Merkley asked a question about 
financial literacy and I wanted to followup on that. I am happy 
to hear about the full service financial counseling clinic at 
Iowa State, which offers individual counseling workshops and 
courses on personal finance such as budgeting and the use of 
credit cards. I am a strong proponent of financial literacy 
requirements in education.
    I think we need to be doing so much more to ensure that 
young people understand what it means to take out a student 
loan, and how to use a credit card. You cannot get by in our 
country today without an understanding of debt, and the 
difference between good and bad debt, as long as it is used for 
investment purposes.
    I understand that this is a voluntary program and the 
participants in the financial counseling clinic have 
dramatically increased, but that you still are not hitting 
every student. When I was in the State legislature in North 
Carolina, I mandated that a financial literacy curriculum be 
taught in the high school. It is still not enough and it is 
still just a very, very small part of a larger class.
    What have you been doing and what do you plan to do to 
attract more students? I am inclined to think that each and 
every student should take a course like this. Would you 
consider making this a mandatory course for all incoming 
students?
    Mr. Leath. We would consider making it mandatory. Where we 
are right now is we are pushing it a different way.
    We teach an alcohol awareness training that also covers 
sexual responsibility, and we are up to about 83 percent on a 
voluntary level by pushing it in conjunction with the 
government of the student body. We are finding that the 
students are more receptive, retain the information more when 
they take it because their peers think it is important.
    If we can drive up the financial literacy because other 
students and student Governor are pushing this, ``It is really 
great. It was worthwhile. You should take it,'' we think it 
will be more meaningful. If we cannot get those numbers up 
soon, we would consider making it mandatory.
    Senator Hagan. Do any of the other witnesses have comments 
on that?
    Mr. Murdaugh. Senator, I would simply say our experience is 
that you have to make it mandatory, that when you make things 
optional for students, you simply do not get the kind of 
involvement that you need to have, unfortunately. So we would 
certainly support making it mandatory.
    Mr. Snyder. We are a member of this Achieving the Dream 
Initiative that many of your States have been involved in for 
low-income students of color and where it applies to race. We 
initiated mandatory advising for all incoming students.
    Then we made it a mandate that if you are in a remedial 
course, which would be about half our students, you must take a 
student success course, either 1 or 3 credit hours which do not 
lead to a degree, but do cover financial literacy as part of 
that time management. That is mandatory if you are in 
remediation.
    We have seen a big kick-up in persistence since we have 
done that, because students get lost between that first and 
that second year. So it is mandatory.
    Senator Hagan. How long is that class and what does it 
involve?
    Mr. Snyder. It would be 1 hour per week if you are in one 
class, so 3 credit hours, and it involves, really, how to get 
yourself into all aspects of college life. These are not 
residential students, so it is primarily going to be managing 
your courses, helping you to choose your major, making sure you 
understand what the advisory system is, and a portion of 
financial literacy.
    Community college tuition is less than the Pell. So the 
students have to figure out how to use that Pell money so that 
they do not have to go borrow. You should not really have to 
borrow at a community college either here or in Florida if you 
have a full Pell grant. But students do, and that is what we 
are trying to avoid.
    Senator Hagan. That is why I think our community colleges 
do such an excellent job.
    I, too, think it should be mandatory. I think, as I said 
earlier, you cannot get by in our country today without 
understanding credit, and I do not think that schools do a good 
job at teaching this in middle and high school. I am very, very 
concerned about it.
    The work that the UNC System and that Chapel Hill are doing 
is just one effective way to reduce costs that I talked about 
earlier.
    Dr. Twigg, you have shared your work around the 
effectiveness of course redesign as a way to maintain or 
increase quality, but also save money.
    What are some of the other practices that schools around 
the country are engaging in, or should consider, in order to 
save funds?
    Ms. Twigg. I think that schools are trying to do a number 
of different things. But most of the effort has been 
concentrated on at the administrative level, I would say, doing 
procurement programs, finding coalitions of other institutions 
to buy other kinds of things, and that is important. But I 
think that what is not really being touched is the academic 
program, which is the heart and soul of most institutions.
    We used to say that faculty costs took up about 80 percent 
of the institution. That is no longer the case because there 
has been a lot of growth in administrative costs. But 
nevertheless, the fact that teaching methods remain much as 
they were 200 years ago makes them relatively inefficient and 
ineffective.
    I think the thing that really needs to be done at 
institutions is to start on that aspect of the college or 
university, and that is to redesign the way academic programs 
are both constructed and delivered. That is where you will 
start to see much greater savings, I believe.
    Senator Hagan. Give me a picture of what this would look 
like.
    Ms. Twigg. One of the things we talk about is focusing on 
the top 25 enrolled courses. So at a community college, my 
colleagues here, that could affect about 51 or 52 percent of 
the overall enrollment.
    Tallahassee Community College was a participant in our 
earliest redesign program. They redesigned their freshman 
English course and student outcomes were much superior to the 
pre-redesigned course. And they saved, this was 10 years ago, 
$330,000 a year.
    Senator Hagan. What is a redesigned course?
    Ms. Twigg. In essence, rather than each individual 
instructor--Tallahassee had about 40 sections or so of freshman 
English--rather than every instructor doing his or her own 
thing individually, the old analogy about building a car in a 
garage as opposed to in a factory. Instead, the faculty worked 
as a team to develop materials jointly, so all of that 
preparation time is cut down. They developed examinations 
jointly, so that preparation is cut down. They had some online 
exercises, so they are not doing everything--the teacher doing 
every single thing, grading and other things where they need a 
person.
    They are analyzing what is going on and thinking where the 
technology can be applied to sort of offload some of the human 
effort, and where you have to keep the human part of the 
teaching. So there are different design decisions made 
according to the discipline.
    Senator Hagan. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Hagan.
    A couple of final observations. This committee has 
conducted an extensive investigation over the last couple of 
years into the for-profit school industry. We have had a number 
of hearings on it. I have had professional staff involved in 
this. We will be putting out our findings of about a 2-year 
investigation with hundreds of thousands of documents reviewed. 
We will be putting this out. Hopefully, the week after next we 
will finally have our report. I think it will be quite 
startling.
    Right now, about 25 percent of all Federal aid goes to the 
for-profit sector. Senator Hagan, by the way, has a bill in to 
say that none of that money could be used for advertising, not 
only just for-profits, every school. No Federal financial aid 
money should be used for advertising. I happen to be a co-
sponsor of that bill. I think that is a step in the right 
direction.
    The reason I bring that up is that in our investigation--
and all the time I have spent looking at this--the for-profits, 
basically, have stepped into a void that was not being filled, 
and that is online courses. Now, I think they have skewed it 
greatly. In many cases, they have not provided the kind of 
student support services, things like that, that we will point 
out, but more and more, it keeps coming up.
    I have heard it from just about everybody here in this 
panel about getting involved in more online activities. The 
young people today are learning that way. They are learning 
more that way. As adolescents, they are more and more adapting 
to learning online.
    What can we do, on the Federal level, to help promote this? 
Whether it is Iowa State, or it is our community colleges 
which, I think, really ought to be involved in this because you 
know what needs to be done; when you have 98 percent of your 
students getting jobs, that is fantastic. I can tell you it is 
not that way in the for-profit industry.
    Somehow there is great expertise here. Why are more schools 
not getting involved in online activities and extending out 
more: private colleges, public universities, regent schools, 
community colleges? Dr. Twigg, why?
    Ms. Twigg. The fact is that there are more and more schools 
getting involved in online activities. The number of students 
engaged in online courses grows by millions every year.
    There is an organization called the Sloan-C, the Sloan 
Consortium sponsored by the Sloan Foundation that counts the 
number of online students, and these numbers are growing 
rapidly. There are not as many institutions that are devoted 
purely to online courses. In general, there are traditional 
institutions that do some online.
    The community colleges have been in the lead, in many ways, 
in online courses. For example, the Virginia Community College 
System here, the Northern Virginia Community College was one of 
the earliest leaders in using online courses, and they have 
hundreds of thousands of students taking online courses.
    I think it is something where the average citizen thinks 
only a couple of people are doing it but, in fact, almost every 
institution in the country offers some kind of online activity.
    The Chairman. Someone mentioned the Western Governors 
University.
    Ms. Twigg. Right.
    The Chairman. Mr. Snyder, that they are doing some pretty 
fantastic stuff.
    Mr. Snyder. They have a great program, and we have worked 
with Bob Mendenhall. They have a process model that really 
focuses on the adult learner, which is another point that we 
need to make, and that is the adult learner is really the one 
that has been benefiting by online, and that was a void that 
the for-profits filled.
    We have talked to the for-profits. We tried to learn a lot 
of things, certainly in the way they run their back office. 
They are much more efficient in the way they deliver different 
varieties of media.
    A couple of concerns: I think we have to be thoughtful 
about new regulations because we do not want to sweep ourselves 
wherein everyone is concerned about outreach or advertising 
because the States may adopt similar rules. And pretty soon, 
you have no budget to explain to the high school student about 
how to go to college.
    Also, there are the accreditors who get concerned about the 
media presented in online. In other words, it is OK to bring a 
textbook, but they get worried about a variety of other media, 
when really, online is all about this really open network of 
media. I think that is critical.
    We are the largest, probably, online provider in terms of 
just actual headcount other than perhaps Apollo. We could not 
have operated in the last few years with a 40 percent increase 
in enrollment without online.
    The Chairman. Anyone else?
    Mr. Murdaugh. Mr. Chairman, I would say, too, the 
proliferation of online has really outstripped our ability to 
understand the effectiveness of it. There are so many 
organizations, public and private, who have raced into the 
online world, and we are now beginning to be able to sort out 
which of those are actually delivering quality education and 
which are not. And as that emerges, I think people can make 
better decisions. We have a very robust online program.
    But I would also like to add, sir, that we talk about it as 
if it is an either/or and we have found great effectiveness 
with blended learning programs where some of what we do, we do 
online. And then involve students in hands-on application of 
course material, which I think is an incredibly important part 
of online.
    The Chairman. As you know, there was a Federal requirement 
that was put in by Sam Nunn from Georgia, in 1992 that required 
at the for-profit schools that 50 percent of their students had 
to be campus-based; 50 percent. Now that was removed, if I am 
not mistaken, in 2005. And as our report will show in a couple 
of weeks, since that time, it has just skyrocketed in terms of 
how many students are online.
    And you are right, we know what the dropout rates are now 
and the non-completion rates are of these schools, and it is 
abysmal. Before, we had a requirement, 50 percent. We do not 
have that requirement anymore.
    Mr. Leath. Senator, I would like to echo what my colleagues 
said. We found blended learning is really the right approach. 
Your alma mater jumped 23 percent in distance and online 
education credits last year.
    But we are basically a science and technology university. 
There are many programs that still are better served in hands-
on laboratories and other spaces. And in addition, we want to 
emphasize that there is also the added component, there is more 
to college than what you get in just intellectual material in 
the classroom whether it is team building, living in residence 
halls, and many other experiences that come with living on 
campus. We have got to get that blend right.
    The Chairman. I agree.
    Dr. Heller.
    Mr. Heller. If I may add, Senator, in your comments about 
the for-profit sector, as you know, the Department of Education 
last year promulgated a set of rules revolving around gainful 
employment, and those have been challenged in the courts. And I 
know on the other side of the Capitol, there has been some 
movement to prohibit the Department from enforcing those rules.
    But I would strongly encourage the Senate to take a look at 
those and support the Department, because I think that is an 
important quality assurance mechanism that can be used, whether 
it is online programs, blended programs, or residential face to 
face programs to ensure that any institution is offering a high 
quality program if it is a vocationally oriented program.
    The Chairman. I am going to use Tallahassee Community 
College as an example, quite frankly, in terms of employment 
and what can happen. It is wonderful.
    I just had one other thing I wanted to cover. I do not mean 
to prolong this to do two different things.
    For all of you, a report from 2011 found that bachelor 
degree graduates took 14 percent more credits than necessary 
for graduation, associate degree grads took 32 percent more 
credits than necessary, and certificate students took 112 
percent more credits than necessary. I am not certain what all 
this means, but it does add extra financial burden to students 
and drains financial aid resources.
    So what is this all about? Why are students taking or 
choosing to take additional credits? Is this something we 
should be concerned about? It is just curious how we looked at 
this, we saw this data.
    Mr. Murdaugh. If I might, sir, I think one of the things I 
referred to is the academic efficiencies that we need in terms 
of planning.
    Our tool that we use is an Individualized Learning Plan 
that begins with a conversation between a student and an 
advisor where they talk about if the student knows what their 
long-term career plan is, then they build the academic ladder 
to get them to their career goal. Obviously, some do not know; 
we can start them on a very generic path, but it avoids exactly 
what you are talking about.
    We focus the student both on the courses they need to take 
and we give them advice about our experience with regard to the 
sequencing of those courses that will serve them well, allow 
them to continue, and succeed.
    The Chairman. Also, is it not true, Mr. Snyder, that a lot 
of times kids who go to college thinking they are going to 
pursue one course of study and find out they are not quite 
suited for that, so they switch over and they need to take 
extra credits for that? I know that happens too.
    Mr. Snyder.
    Mr. Snyder. I think that a career path is important, but we 
have given it a term. We call it ``credit creep,'' and that is 
that you would think you only need four semesters of 15 credits 
or 60 to get your 2-year degree, and double that to get your 4-
year degree.
    We worked with the General Assembly and actually made a 
statute that said that, ``Other than national accrediting 
requirements, programs should be limited to 60 and 120,'' and 
we are now working through that with the 2 years and 4 years. 
Because while pathways are one problem, the issue is that 
curriculum committees will say, ``An extra course here, an 
extra course there is good.'' And pretty soon, you have 12 
extra credits which did not exist 5 years ago or 10 years ago.
    I think we will see the results. Some States have enacted 
that. I think it is going to be important. It will force us to 
all come together to say, ``What can we do to compact this into 
a 2-year window or a 4-year window?'' Credit creep is what we 
are working against.
    The Chairman. Any other observations on that at all?
    There is another touchy subject that comes up a lot. How 
much of student aid is for lifestyle rather than for really 
needing the money to pay tuition for basic room and board? How 
much of that is borrowed for having a certain higher lifestyle? 
I hear a lot about this.
    Mr. Leath. I guess I would say the short answer is: too 
much, because really, none of it should be used that way. We 
have had issues where students have used it for car payments, 
and for spring break to keep up with their friends, for 
weddings, other things.
    We have made great strides with financial literacy, where 
there is a day of reckoning that comes when you use it for 
these types of things, and you should not be borrowing. You 
should be living within your means on these. I do not know that 
it is as bad as some of the spectacular stories we hear, but it 
is real, it is there, and we need to drive it down.
    The Chairman. Yes, Dr. Twigg.
    Ms. Twigg. One of the programs that we have been working 
with recently is a nationwide program in developmental math. As 
you know, this is a big problem because of the sheer numbers of 
students that have to take some kind of remedial course, 
developmental course.
    Many of the institutions that we are working with have 
analyzed students who are receiving F's in development lab and 
have found that they are receiving F's in every class that they 
have enrolled in strictly for financial aid purposes.
    My impression is, in other words, they never go to class; 
to any class.
    The Chairman. I have heard this. I do not know. How 
prevalent is it?
    Ms. Twigg. I have heard, because we focus on the first year 
of college and the developmental area, I have heard it from 
numerous institutions. And institutions just do not think to 
track it, but they were trying to understand why they were not 
having success in the redesign, and I think that is something 
that should be looked at quite seriously to find out how 
extensive the practice is.
    If you think 85 percent of students in a class were in 
these circumstances--particularly during this economy, and this 
case was in rural areas of the country where they had no 
intention of being students--I think it is worth looking into.
    The Chairman. I have heard this. Do you have something on 
that, Mr. Snyder? Because I have heard this, but I just do not 
know. Is this just bits and pieces, or is this something that 
is happening more and more? I do not know.
    Mr. Snyder. We do not have good data on what the split is. 
Clearly, there are going to be lifestyle students.
    Let us say this: community college is predominantly in a 
location where not all of our students are poor. But if you are 
poor and you are not a scholar, you are in the community 
college. I think that is clear.
    There is still, if you look at the default rates even in 
yesterday's ``Wall Street Journal,'' 9 out of 10 people are 
trying to pay back their loan, which probably is a good sign. 
So it is not prevalent.
    Colleges, I think, can do something, and we are trying to 
do that by tracking 10-day attendance and short-term attendance 
on people who are not showing up, to withdraw them from school. 
That is one of the techniques we are using because we worry 
about defaults.
    Lowering the cost of attendance that we calculate, which 
actually puts a cap on how much they can borrow. And we 
actually did that for Ivy Tech, that we lowered the cost of 
attendance, which actually reduced their borrowing capacity. 
Because we said to ourselves, ``If Pell pays for everything, 
then we do not want them to use that,'' although poor students 
may need it for transportation and everything else, it digs a 
hole they cannot get out of.
    But the default rate of 10 percent across the board says a 
lot of people are trying to get that money back.
    Mr. Heller. Senator, I think that there are certainly 
stories out there about students who are using Federal aid to 
subsidize lifestyle rather than their cost of going to college. 
But I think the reality is with literally millions of Pell 
grant recipients, millions of other students receiving student 
loans, I would be cautious about trying to implement any 
changes in policy based on the stories.
    I think that when you go out and talk to Pell grant 
recipients, what you find, in fact, is that most of them are 
highly dependent upon that assistance, and they are not using 
it for spring break, they are not using it for a car unless it 
is a car they need to be able to get to their classes. I would 
just be cautious about not overreacting to the stories that are 
out there in the media.
    The Chairman. Are there any other things that anybody wants 
to put on the record here or say that I have not asked, or 
anyone has not asked a question, or delved into that you wish 
to add anything to the testimony?
    This has been a great panel and great information. We thank 
you very much for your leadership in this area.
    It is, I guess the underlying question I always have, Dr. 
Twigg, in terms of the course redesigns and everything else is 
just, what is our role? What is the Federal Government's role 
in promoting this?
    Like, for example, what Dr. Leath is doing at Iowa State in 
terms of having that financial counseling. I think every school 
ought to have that, every college, but I do not know if we 
should be doing that; hopefully, schools would pick it up, what 
Dr. Murdaugh is doing at the community colleges down there, all 
of you.
    But what I want to find out is, what is our proper role? 
What should we be doing from the Federal Government? I am not 
asking you to solve that right now.
    Ms. Twigg. I cannot solve the entire problem, but I could 
make a suggestion. The Federal Government offers lots of 
competitive grant programs through the Department of Education, 
through NSF, through the Department of Labor. Yet, very few of 
these programs focus on the productivity problem in higher 
education, the very thing that we are all saying is one of the 
major problems that we face as a country. They focus strictly 
on improvement of curriculum.
    Were some of these agencies to include the cost question, 
as well as the curricular question such as the things that we 
have been doing, lots and lots of creative ideas would come 
forward. But as long as these problems are always strictly for 
innovation, strictly for curricular changes, they kind of come 
and go. They do not tend to stabilize in any way.
    That is one thing I would certainly encourage the 
Government to do, because it is a creative, positive way of 
encouraging people to learn more and come up with new kinds of 
ideas. And I think there are many, many millions of dollars 
being spent in current programs that could be redirected and 
formulated a little bit more specific to address the cost issue 
as well.
    The Chairman. I invite any of you, if you have thoughts on 
this later on, to get it to this committee and let us know your 
suggestions, your thoughts on this, on how we can effect some 
of these changes a little bit more.
    Unless anyone has anything else, I was going to point out, 
``Think of it this way. K through 12 education is mandatory in 
States. Corrections facilities are mandatory,'' I never thought 
about that one. If the judge says you have got to go to jail, 
you have got to go. Medicaid, as Senator Alexander brought up, 
is not. It is matching money. No State has to do Medicaid. They 
do not have to, but if they want the matching money, they have 
to do certain things.
    It is only in higher education that has paying customers. 
When State legislatures look at that, well, as someone said, 
that is the only thing you can go to that has a big pot of 
money where you can get somebody else to pay for it, and that 
is really a problem we have got to address on this. But I just 
thought that was a curious way of looking at it.
    Again, I thank everyone. The topic is of particular 
importance to this committee and especially the other 
subcommittee I chair within the Appropriations Committee. So I 
am grateful for this, and I invite you to continue to give us 
the benefit of your insight on this.
    We will leave the record open for 10 days, until August the 
2d.
    The Chairman. I thank all of my colleagues on both sides of 
the aisle for their hard work on this and for a collaborative 
approach on this issue.
    The hearing of the HELP committee is now adjourned.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

       Response to Questions of Senator Enzi by Donald E. Heller
    Question 1. In your written testimony, you describe how Michigan 
State responded to a decrease in State appropriations. Please discuss 
other examples of how public institutions are successfully responding 
to decreased State appropriations? What steps are these schools taking 
to control student costs and maintain their commitment to academic 
quality?
    Answer 1. I have not researched systematically how public 
institutions have responded to decreasing appropriations, but have had 
some firsthand experience and am generally knowledgeable about trends 
in this area. Many large universities have engaged in focused efforts 
to find ways to reduce costs, as well as increase non-
tuition revenue, in response to cuts in appropriations (or slower 
increases) during the current recession. Some of the strategies 
universities have pursued include:

     Reducing utility costs through installation of energy-
efficient devices and practices;
     Having employees pay more of their health insurance costs;
     Academic program review, consolidation, and closure;
     Outsourcing of administrative services to lower cost 
providers;
     Centralizing of purchasing services and negotiating bulk 
volume pricing agreements with suppliers; and
     Increasing class sizes and reducing non-tenured faculty 
positions.

    While at Penn State, I served on a committee formed by then-
president Graham Spanier, and chaired by provost (and now president) 
Rodney Erickson, that was charged with identifying ways to cut the 
university's expense budget by $10 million per year. We accomplished 
this goal, which became critical in light of the Commonwealth of 
Pennsylvania's decision to cut the appropriation to Penn State by 19.5 
percent in fiscal year 2012. You can see more about this committee at 
http://live.psu.edu/story/54733 and http://live.psu.edu/story/58380.

    Question 2. You discuss the importance of the Pell grant program in 
your testimony. As you are aware, Congress has struggled to maintain 
the maximum Pell grant award in recent years and has had to enact a 
series of short-term fixes, which have often come at the expense of 
low- and middle-income students. The program is again facing a $6 
billion funding gap in fiscal year 2014. What advice do you have for us 
as we begin to look at ways to close this gap? Specifically, what types 
of long-term reforms should we be considering in order to prevent 
future funding gaps?
    Answer 2. As I am sure the members of the Senate HELP Committee are 
aware, funding for the Pell grant program is highly sensitive to two 
factors: (1) the number of students eligible for the awards; and (2) 
the number of eligible students who choose to enroll in college. Both 
of these categories tend to increase during a recession, the first 
because students and families have less income and are more likely to 
fall within the Pell grant means-testing rules, and the second because 
fewer job opportunities during a recession means that many more 
people--particularly adults--will tend to enroll in college to retool 
their skills and prepare themselves for new careers.
    Figure 1 shows funding for the Pell grant program (in current 
dollars) since 1980. In the recessions of the early 1990s and 2000s, 
there is a very clear pattern of higher rates of funding for Pell due 
to student demand during the recession, with a lag of a year or two as 
students stay in school to try to complete degrees, followed by a 
flattening out or even decrease in funding until the next recession. We 
are currently in the midst of the same pattern in the current 
recession, though the slope of the increase is much greater, due 
largely to the magnitude of the recession rather than any increases in 
the maximum Pell award.


    We do not know whether the period after the current recession will 
result in a decline in the demand for Pell grants, but past experience 
indicates that this will likely occur. Thus, I would caution the 
committee against implementing any major structural changes to Pell to 
address the current problem until we see what the post-recession demand 
for Pell looks like.
    Having said this, there are two steps the committee could consider 
to ensure that funding for the Pell grant program is aligned with 
national priorities.

     Since the hearing, the committee has issued its report on 
the for-profit sector of higher education, and the report raises a 
number of serious concerns about this sector. Chief among them is the 
issue of high dropout and low completion rates of students in these 
institutions. The for-profit sector is the fastest-growing recipient of 
Pell grants. Since bottoming out at 12.2 percent of all Pell grant 
dollars (following the reforms of the 1992 reauthorization of the 
Higher Education Act), the for-profit sector has seen its share grow 
steadily to 25.2 percent in 2009-10, the most recent data available. 
And this sector enrolled only 9 percent of undergraduates nationwide in 
2009-10.
     The Department of Education has implemented a series of 
regulations, known as the Gainful Employment regulations, which would 
sanction vocationally oriented programs that fail to provide students 
with adequate post-completion employment and ability to repay their 
student loans. While these regulations apply to all types of 
institutions, most of the programs are located at the types of for-
profit institutions described in the HELP Committee investigative 
report. I would encourage the committee to support the Department's 
ability to implement and enforce these regulations in order to weed out 
from title IV eligibility those programs that are clearly not meeting 
the needs of students and national priorities.
     In order to help meet the Nation's goal of increasing 
post-secondary attainment rates, the Pell program could prioritize 
funding to those students willing and able to enroll in a full course 
load, which is generally approximately 15 credit hours per semester in 
order to stay on track to graduate with an associate degree in 2 years 
or baccalaureate degree in 4 years. The committee could consider 
funding a demonstration program to give a significantly higher Pell 
award--say 150 percent of the normal maximum--to students enrolling at 
a full course load level, and then monitor the success of the program 
in promoting timely graduation.
  Response to Questions of Senator Enzi and Senator Bennet by Steven 
                                 Leath
                              senator enzi
    Question 1. During our hearing on college costs in February, it was 
mentioned that compliance with Federal regulations imposes tremendous 
costs on institutions, and that many current regulations are outdated 
or unnecessary. In May, the President instructed all Federal agencies 
to review and eliminate outdated requirements and unjustified costs. 
How are Federal regulations affecting your institution's costs? In what 
ways has the Department of Education responded to the President's order 
to eliminate unjustified costs?
    Answer 1. Colleges and universities are among the most heavily 
regulated entities in America--as educational institutions, research 
institutions, employers, charitable organizations, and Internet service 
providers, among others. With the exception of the Consumer Product 
Safety Commission, every other Federal agency regulates some aspect of 
higher education. The Higher Education Opportunity Act of 2008 alone 
added over 100 new regulations and a 2011 congressionally mandated 
study found that 90 percent of senior campus leaders reported the 
implementation and administration of those regulations were burdensome.
    While many of the regulations are necessary and appropriate, they 
have significant costs associated with them. As far back as the late 
1990s, Stanford President Gerhard Casper reported that his university 
was spending 7 cents of every tuition dollar on compliance with 
government regulations. At a time when we are striving to reduce the 
cost of higher education, in most instances, Federal regulations are 
unfunded mandates that increase the operating costs of colleges and 
universities.
    ISU has not undertaken a cost analysis for Federal regulations 
across the various functions and operations of the institution nor with 
respect to research and research administration per se. Still, several 
suggestions for streamlining regulatory oversight in ways that maintain 
accountability but eliminate unjustified costs come readily to mind. 
Below are several recommendations ISU made to OMB earlier this year in 
response to the Advanced Notice of Proposed Guidance from the Federal 
Register, Volt. 77, No 39, February 28, 2012.

     Universities are recipients of Federal funds from multiple 
Federal agencies and as so-called subrecipients through multiple prime 
recipients of Federal funds. It is inefficient for each of these 
funders to conduct independent activities to evaluate whether a 
particular University has adequate controls in place to ensure 
compliance with Federal requirements. Duplicative efforts by multiple 
Federal agencies and multiple prime recipients have resulted in 
inefficiencies and waste at the Federal level, the prime recipient 
level, and the subrecipient level. As Universities are typically both 
prime recipients and subrecipients, and therefore responsible for both 
monitoring and being monitored, the resulting unproductive burden is 
high. In response to the President's call to review and eliminate 
outdated and unjustified costs, there should be an increased emphasis 
on the role of the cognizant agency for audit and elimination of the 
requirements that lead each agency and each prime awardee to engage in 
practically identical activities related to assessing financial 
compliance at each recipient/subrecipient university. The Federal Audit 
Clearinghouse, or another centralized system, should be capable of the 
collection and retrieval of sufficient information for an agency or 
prime recipient to determine the compliance status of an entity subject 
to A-133, and to determine whether that entity's cognizant audit agency 
has issued any necessary management decisions. This would allow 
university responsibilities as the prime recipients to be properly 
focused on performance-based monitoring of all subrecipients and 
financial monitoring of subrecipients not subject to A-133.
     It also would be valuable to eliminate the Cost Accounting 
Standards and Disclosure Statement (DS-2)--Section C.10-C.14 of OMB 
Circular A-21 and Appendices A and B from OMB Circular A-21--as applied 
to university recipients of Federal grant support. The Cost Accounting 
Standards and Disclosure Statement is appropriate for private, for-
profit companies that receive Federal contracts, as most private 
companies do not provide public access to their internal accounting and 
other policies. A process for disclosure of such practices seems 
appropriate in that context. However, university policies and 
procedures are already documented in institutional systems and are 
readily available to the Federal Government for inspection or review. 
Many policies and procedures are publicly available on Web sites. Given 
the transparency of university policies and procedures, the Cost 
Accounting Standards applicable to OMB Circular A-21, as well as the 
requirement to prepare a Disclosure Statement, are unnecessary and 
burdensome. Consequently, Iowa State University recommends the 
elimination of Section C.10-C.14 and Appendices A and B from OMB 
Circular A-21.

    As noted, ISU has not undertaken a cost analysis of Federal 
regulations across functions, so it is difficult to address the 
Department of Education's actions in this regard (a web search reveals 
the following report from the Department on an internal assessment of 
the effectiveness, benefits, and costs of regulations: http://
www.whitehouse.gov/sites/default/files/microsites/21centgov/ed1-
retrospective_
review_plan_report_052012.pdf).
    A federally funded study of the number and scope of all Federal 
regulations and reporting requirements with which colleges and 
universities must comply that includes an estimate of compliance costs 
and that makes recommendations for consolidating, streamlining, and 
eliminating redundant and burdensome regulations would be a valuable 
contribution to our mandate to constrain the rising cost of providing a 
college education.

    Question 2. In your testimony, you discuss your efforts to provide 
better financial literacy for your students. I have long been an 
advocate for urging greater financial literacy. Would you provide us 
more detail on the specifics of what Iowa State is doing, as well as 
describe how successful these efforts have been?
    Answer 2. Iowa State University has undertaken several initiatives 
over the past several years to help students manage and reduce their 
indebtedness. These initiatives continue to have a positive impact, as 
illustrated by the table below that shows average indebtedness for 
students who graduate with debt, and the percentage who graduate with 
debt since 2006-7. Both figures are gradually declining.

 
----------------------------------------------------------------------------------------------------------------
                                                        Total Number of                             Average
         Reporting Year              Analysis Year      Undergraduates     Percent Indebted      Indebtedness
----------------------------------------------------------------------------------------------------------------
2006-07.........................  05-06 Final.......  20,440............  69.0..............  $32,130
2007-08.........................  06-07 Final.......  21,004............  70.4..............  $31,501
2008-09.........................  07-08 Final.......  21,607............  71.1..............  $31,616
2009-10.........................  08-09 Final.......  22,521............  71.2..............  $30,411
2010-11.........................  09-10 Final.......  23,104............  68.6..............  $30,062
2011-12.........................  10-11 Final.......  24,343............  68.5..............  $29,455
----------------------------------------------------------------------------------------------------------------

    Following are brief descriptions of the various initiatives by the 
university designed to help students manage their finances and decrease 
their indebtedness:

    1. The Office of Student Financial Aid is introducing a Student 
Financial Resource Center concept to be more proactive in working with 
students. New, more visible and accessible space is being converted to 
this function in the main student services area of Beardshear Hall, 
with completion expected by Sept. 1, 2012. Also, we now require all 
financial aid counselors to incorporate budgeting, debt management, and 
financial counseling into every counseling session. And beginning in 
the spring of 2013, a ``Live Like a Student'' educational effort will 
be launched focusing on issues of budgeting, using financial aid to 
meet educational costs, timely bill payment, student loans, credit 
cards, identity protection, and financial planning beyond college.
    2. Beginning this summer, all Financial Aid Award notices have been 
modified to provide more complete information, including present 
indebtedness and repayment information. Early indications are that 
students have canceled or reduced loans at a greater rate; however, 
more complete analysis will be done this fall. Also, award notices now 
include Payment Plan brochures to encourage payment plans as opposed to 
borrowing; language has been modified to emphasize that loans are 
optional. This fall, we will require active confirmation of loans for 
all borrowers annually.
    3. We now require Entrance and Exit Loan Counseling for all student 
loan borrowers. All students receiving Federal loans must complete one-
time entrance counseling as a condition of receiving funds. Likewise, 
counseling is required prior to certification of private loans. 
Students may choose between on-line and in-person interviews, depending 
on date of application, amount to be borrowed, and if the loan is new 
or renewed.
    4. We are encouraging utilization of the U.S. Department of 
Education financial literacy module. E-mails have been sent to all 
financial aid recipients instructing them on how to access and use the 
module. The Office of Financial Aid will track the borrowing of 
individuals who access the module vs. those who do not to determine 
impact. The office is considering offering a scholarship to encourage 
use of the module.
    5. Student Financial Aid staff now receive comprehensive training 
on financial literacy issues, and staff are encouraged to seek 
financial planning certification.
    6. The Office of Student Financial Aid has expanded research on 
topics related to student indebtedness, including: indebtedness by 
college, major, gender, ethnicity; student awareness of indebtedness; 
and analysis of student loan defaulters. Future topics include: 
analysis of students' ability to repay student loans; analysis of 
student loan indebtedness statements and students' decisions regarding 
borrowing; and analysis of student financial literacy education and 
indebtedness.
                             senator bennet
    Question 1. You mentioned that Iowa State University is one of the 
land-grant universities created under the Morrill Act. I'm especially 
proud of Colorado's land grant school--Colorado State University. CSU 
is a leader in agricultural research, and their work helps keep our $40 
billion agriculture sector competitive. What unique funding challenges 
are land-grant universities facing today? How can we help ensure that 
these institutions are accessible and that their vital mission--
including agricultural research--continues to be carried out?
    Answer 1. 2012 is the 150th anniversary of the Morrill Act and the 
establishment of U.S. Department of Agriculture, which began the long-
term Federal-State partnership with land-grant universities. Since the 
signing of the Morrill Act, the Federal Government and States have 
shared responsibility to support access to higher education and to 
solve problems facing agriculture and society.
    Thanks to the partnership between government and the land-grant 
system, the United States has the premier research enterprise in food 
and agricultural sciences. Agricultural research touches on Americans' 
lives every day, through their food, water, energy, environment, 
clothing, and fuel, and via a multitude of consumer products. And 
public investment in agricultural research has an incredible payoff to 
society: the annualized marginal real rate of return to public 
agricultural research is about 50 percent, according to an Iowa State 
University economist who has researched this topic for decades.\1\
---------------------------------------------------------------------------
    \1\ Huffman, W.E., & Evenson, R.E. (2006a). Do formula or 
competitive grant funds have greater impact on State agricultural 
productivity? American Journal of Agricultural Economics 88, 783-98.
---------------------------------------------------------------------------
    Ominously, this same Iowa State economist warns that with fewer 
Federal and State investments in agricultural research since the mid-
1990s, forecasts show a dramatic slowdown in U.S. agricultural 
productivity in the near future. A clear challenge is a Federal budget 
that, year after year, reflects a crisis in Federal support for 
agricultural research, even as tight State budgets across much of the 
country simultaneously diminish support for land-grant agricultural 
research.
    Perhaps the biggest funding challenge lies in the fact that new 
advances in science and technology build on earlier research. The 
research and development needed to develop new technologies for 
farmers, consumers, and others frequently has a long gestation period. 
The results of a lack of investment today may not be apparent for 
years, but eventually the well will dry up and our Nation will fall 
behind. Long periods of low investments in basic R&D cannot quickly or 
easily be reversed.
    Strong public investment in both competitively funded programs and 
capacity building funding is needed to ensure the historic partnership 
that connects the Federal Government and land-grant universities in 
each State continues to answer society's needs of the future. Now is a 
perfect time to recommit to the principles forged back 150 years ago.
    Response to Questions of Senator Enzi and Senator Bennet by Jim 
                                Murdaugh
                              senator enzi
    Question 1. During our hearing on college costs in February, it was 
mentioned that compliance with Federal regulations imposes tremendous 
costs on institutions, and that many current regulations are outdated 
or unnecessary. In May, the President instructed all Federal agencies 
to review and eliminate outdated requirements and unjustified costs. 
How are Federal regulations affecting your institution's costs? In what 
ways has the Department of Education responded to the President's order 
to eliminate unjustified costs?
    Answer 1. In the last several years we have not experienced a 
decrease in regulations for Federal title IV financial aid. Actually 
the administrative burden has grown substantially and the complexity of 
administering Federal aid has become increasingly expansive and 
complex. The following are some specific ideas.
                           federal pell grant
    Among the regulations which are outdated are the options provided 
by the Department for determining eligibility for Federal Pell grant. 
Currently, and this process has existed for years, a school must either 
determine a student's eligibility by the end of the first regular drop/
add period for a term, commonly referred to as a ``freeze point'' or 
they must change the student's enrollment status every time a student 
adds or withdraws from a course. This process was established when most 
post-secondary institutions delivered education either in a semester or 
quarter format without mini-terms, except for possibly summer.
    In the last decade the delivery of education has become more 
flexible, primarily to serve the needs of students, and now many 
colleges offer semesters that have abbreviated terms within them with 
multiple start dates. If an institution chooses the first option, which 
is to use a freeze date at the start of the term, then they cannot 
offer Pell to students who choose to register after that point. This is 
a disservice particularly to non-traditional students who at the 
community college level often need our help the most. Should we choose 
the option to increase and decrease Federal Pell grant throughout the 
term, we will leave many students with an obligation to the college, 
potentially preventing their ability to register in future terms. A 
better solution would be to freeze the tuition when the student 
registers. Should they register for future terms, we recommend that we 
only increase the Federal Pell grant if they have continued enrollment 
in their prior classes. If they have not, pay them at the current 
enrollment status, which should include any funds they have received 
before that date.
  the federal methodology formula and the expected family contribution
    While some may see simplification as the answer to the FAFSA, if we 
continue to remove key data elements from the form, more post-secondary 
institutions will likely move to fee-paid forms, thus eliminating the 
free process. Many items that have been eliminated are key to 
determining if a family has resources to help with the cost of 
education. One such item is the value of the family home. Another is 
the use of business loss to zeroed out income. While these may seem 
minor, we believe the cost to the programs by the elimination of these 
data elements is substantial.
    The USDE should consider changing the term Expected Family 
Contribution to the Student Aid Index. The current formula produces 
unrealistic numbers that most families simply cannot afford to pay. 
Calling the formula Expected Family Contribution only serves to cause 
concerns for families. The term Student Aid Index (SAI) would allow 
institutions to explain that based on the information received we could 
cover the cost of education minus the determined index. While not 
solving all of the issues faced in the financial aid office, it would 
be easier to explain to students.
                           return to title iv
    Return to Title IV has always presented problems for students. 
Failure on the part of the USDE to provide provisions for students with 
exigent circumstances has presented problems for students since its 
inception. Now with the revised and expanded directives on how to treat 
students taking mini-terms the ability to accurately and fairly 
administer the Federal Return to Title IV policy has virtually been 
eliminated and the impact on students financially is burdensome. By 
requiring us to perform Return to title IV calculations on students who 
do not enter the second mini-term is unnecessary if the student 
completed 6 credit hours in the prior term. This expansion of the 
program will only create financial burdens for students who need the 
funds the most.
                              verification
    While verification has always been complicated, the move to student 
specific verification is going to be confusing and cumbersome for 
students. While the current system may annoy some students, it is fair 
and equitable as all students are treated equally. By requiring 
different documents based on USDE specified demographics, you are 
creating confusion for both students and schools and dramatically 
increasing overhead to run the Federal programs.
    This year the USDE decided that schools could no longer accept IRS 
1040 forms. They did so without fully consulting with the IRS. This is 
a major expansion of regulation and a source of confusion for parents 
and students. What the USDE did not realize is that the IRS will only 
issue one Tax Transcript every 30 days. Many parents used the one 
transcript they received before finding out an additional transcript 
was needed. Or, in the case where multiple students are in school, the 
parents mailed the transcript for one student not realizing they needed 
one for the other student.
    Now students with identity theft are faced with the fact they 
cannot complete their financial aid files because the USDE has failed 
to provide guidance on what schools need to do to help students in this 
situation. Interim guidance allowed institutions to accept IRS 1040 
forms, but that guidance expired in the middle of July. The expansion 
and change of regulations without consulting schools and the IRS has 
created a situation where some students may have to postpone their 
education.
                             default rates
    The increased pressure by the USDE on schools with high default 
rates and the move to a 3-year Cohort Default Rate (CDR) has put 
financial aid programs at institutions who are open admission and who 
serve students who are increasingly unprepared for College at risk of 
losing their eligibility to participate in title IV programs. This has 
been done while the USDE continues to modify and expand the servicing 
options and schools and students are often unaware of who holds the 
student's loans for processing. While the USDE has continued to 
determine an institution's ability to participate in the Federal loan 
programs solely on CDR, they fail to account for the type of student an 
institution serves and the effort used by the institution to keep 
default rates low. Regulations concerning default rates should be 
rewritten and simplified, while becoming inclusive of additional 
information impacting an institutions default rate.
                                 loans
    Currently students can borrow the aggregate loan limit while at a 
community college. Efforts to dissuade students are more often than not 
unsuccessful. Here is an area where the USDE could allow institutions 
to set maximum loan limits both on the year and at the aggregate limit. 
In addition, there is rational for limiting the amount a student can 
borrow to their enrollment status, much like we do the Federal Pell 
grant program.
                             senator bennet
    Question 1. You mentioned that Tallahassee Community College has an 
excellent placement record for its graduates. This suggests that TCC is 
doing something right and businesses are recognizing the value of a TCC 
degree. How have you worked with private industry and others to ensure 
that TCC is responsive to today's economic needs and employment 
demands?
    Answer 1. Tallahassee Community College values its mission in the 
Community, as a partner and a leader, in providing a prepared 
workforce. TCC has developed a strategic integration plan within the 
community to assure the best possible relationships for meeting 
community needs and providing opportunities for graduates to obtain 
employment. The following are some specific examples.
          involvement of leadership and middle management in 
                        community decisionmaking
    TCC assures that its senior leadership and other key employees are 
actively involved in the community. Our Board of Trustees consists of 
members who represent the local business, civic, and educational 
sectors. Our president is a voting member of the Economic Development 
Council (EDC); in addition the TCC president has served as president of 
the EDC and has led a number of EDC projects.
    TCC leadership members are involved in EDC planning activities 
including active membership on the Regional Roundtables (Aviation and 
Aerospace; Renewable Energy and Environment; Manufacturing; Health; 
Information Technology; Research and Engineering; and Transportation 
and Logistics). We sit as a voting member of the Leon County Research 
and Development Authority, the Apalachee Regional Planning Council, the 
Workforce Investment Board, and the advisory committee of the Small 
Business Development Center housed at Florida Agriculture and 
Mechanical University (FAMU) in Tallahassee.
    Our Dean of Healthcare serves on the Nursing Research Council of 
the local hospital. The Dean of Technology and Professional Programs 
serves on the community technology organization, TalTech (Tallahassee 
Technology).
    A number of TCC's employees regularly participate in Chamber of 
Commerce activities.
    TCC's president is also a member of the region's economic 
development group, Florida's Great Northwest, as well as the Florida 
Chamber of Commerce and we have a strong relationship with Enterprise 
Florida and Workforce Florida, Inc. (the administrative entity of 
Federal workforce funds).
    TCC also provides resources, partnerships, and support to local 
businesses by hosting events in campus facilities at little or no cost, 
partnering on developing and implementing State and Federal grants, and 
providing grant training. As a result of these interactions, TCC is 
viewed as a critical partner in recruiting new business and industry to 
the region and in insuring a qualified talent supply to those 
businesses and industries.
        alignment of curriculum with business and industry needs
    TCC has 20 advisory boards made up of over 150 local business and 
industry members. The boards meet at least twice annually. Membership 
is updated annually to assure relevancy. We rely on members to provide 
us information about workforce skills and abilities needed in specific 
degrees, and they advise us on hiring needs and trends in their 
professions.
    TCC has strong, positive relationships with clinical and internship 
sites. We get feedback from individuals who work with our students 
regarding curriculum and student readiness for the workforce.
    TCC has a highly successful internship program that places students 
in local businesses for a semester and students must receive training 
prior to entering the internship to assure they have workplace skills 
such as good communication, collaboration, attendance and other values. 
Many programs require or encourage students to volunteer in the 
community, another valuable connection with local employers.
    In addition, students participate in local business events such as 
the region's Technology Expo, a Sportsability event that celebrates 
athletes with disabilities, health fairs, professional organizations, 
and the like. Business leaders are regularly invited to speak in TCC 
classes and at professional club meetings.
    Over 90 percent of TCC's adjunct faculty in the Associate in 
Science and certificate programs work in the local community. These 
faculty offer valuable experiences and advice to students about the 
current work place.
                   support for student job placement
    TCC reorganized its placement services in 2010, developing a more 
robust and locally responsive career center that addresses both student 
and business needs. The Career Center offers a diverse array of 
services related to career planning, preparation and placement 
including:

    1. Computerized Career Assessment
    2. Professional Development Workshops
    3. Internships (in-major)
    4. Part-Time & Full-Time Job Opportunities through FutureLink
    5. Professional Networking
    6. Resume/Cover Letter Assistance

    The Center hosts job fairs every fall and spring semester and this 
fall will add a specialized job fair for allied health students and 
employers. Over 30 (maximum capacity) businesses participated in the 
most recent fair. In addition, TCC engages with over 330 businesses 
that provide internship opportunities for students. Career Center staff 
are actively engaged in local business organizations as well as the 
local chamber of commerce and economic development council.
    Thank you, again, for the opportunity to contribute to this 
important discussion.
         Response to Questions of Senator Enzi by Thomas Snyder
    Question 1. During our hearing on college costs in February, it was 
mentioned that compliance with Federal regulations imposes tremendous 
costs on institutions, and that many current regulations are outdated 
or unnecessary. In May, the President instructed all Federal agencies 
to review and eliminate outdated requirements and unjustified costs. 
How are Federal regulations affecting your institution's costs? In what 
ways has the Department of Education responded to the President's order 
to eliminate unjustified costs?
    Answer 1. Federal regulations certainly play a role in the cost of 
our operation of Federal student aid programs as well as how we 
maintain qualification for title IV student aid purposes. The recent 
regulations relating to Gainful Employment, State Authorization and 
definition of a credit hour contained provisions which require us to 
set up new systems to track and report data. All of this takes 
resources away from other activities in which the Ivy Tech has to 
engage. While we maintain that strong accountability provisions are 
necessary to protect Federal taxpayer investments in our students' 
education, portions of these regulations will be difficult for Ivy Tech 
and other institutions of higher education to implement. On this front, 
RAMC wrote Representative Fox, the Chair of the Higher Education 
Subcommittee in the House of Representatives, supporting her 
legislation to suspend the State authorization and credit hour 
regulations.
    Cost to both students and colleges are also increased by 
requirements set by accreditors and others for students to accrue more 
credits to reach graduation with little, if any, career or job 
performance benefit for the student. Indiana recently took steps to 
combat this by restricting credit requirements to 60 for an associate's 
degree and 120 for a bachelor's degree except where certification and 
other requirements for specialized programs demand more. This has 
ensured that students do not have to pay for credits that may require 
them to take another semester to satisfy.
    On the issue of the Department of Education's efforts to respond to 
the President's order to eliminate unjustified costs, I am not aware of 
what action the Department may have taken in this area.

    Question 2. As you are aware, the Department of Education issued a 
Dear Colleague letter, which explained provisions of its recently 
updated incentive compensation regulation. The letter explained that 
third party entities are prohibited from serving institutions in need 
of assistance if the third party entity is affiliated with another 
institution. Furthermore, this is true even if that entity has no 
direct relationship to the institution. How will the department's 
guidance impact Ivy Tech?
    Answer 2. Ivy Tech has been seeking to work with third parties on 
recruitment and other services. We believe third parties can provide 
insight into the enrollment and other student-focused functions of our 
institution in a cost-effective manner.
    I am aware of this Dear Colleague letter and the restrictions that 
it places on servicing institutions if the third party is affiliated 
with another institution of higher education. From Ivy Tech's 
standpoint, we are looking for the best possible service provider to 
help us meet our goals. An affiliation with another institution of 
higher education should not be used as a means to disqualify 
institutions like Ivy Tech from contracting with such an entity when we 
believe this can best help meet our needs. If the concern of the 
Department is that the third party would provide some beneficial 
service to the affiliated institution of higher education, the 
Department should limit its ban on these services to such a situation. 
The bottom line is that the Department's Dear Colleague letter limits 
the ability of Ivy Tech to contract with the best third party to 
provide us the services that we need.
 Response to Questions of Senator Enzi and Senator Bennet by Carol A. 
                                 Twigg
                              senator enzi
    Question 1. You appear to have had a great deal of success at 
schools that have implemented your coursework redesign model. At what 
type of institution are you seeing the greatest resistance to 
coursework redesign? How can we overcome these objections and encourage 
more institutions to adopt coursework redesign strategies?
    Answer 1. I would say that, just as we have had success with all 
types of institutions, so too have we had resistance from all types of 
institutions. (We have not had a lot of success with elite privates--
the Ivy League, for example--or small private colleges.)
                             senator bennet
    Question 1. In your testimony, you mentioned that the National 
Center for Academic Transformation redesigned a popular introductory 
astronomy course at the University of Colorado to utilize undergraduate 
learning assistants rather than graduate teaching assistants. This 
change led to more successful student outcomes while also decreasing 
the costs of the course. The University of Colorado system has an 
enrollment of nearly 60,000 students across three campuses. What might 
a change like this mean for a large university system under tight 
fiscal constraints?
    Answer 1. I can give you an idea of a calculation that we made with 
the help of the president of the National Center for Higher Education 
Management Systems (NCHEMS) back in 2003.
    We can be fairly certain that the cost of instruction in higher 
education (and that would include the University of Colorado system) 
would be reduced by 17 percent annually if all institutions of higher 
education adopted our redesign methodology while, at the same time, 
quality of student learning would be improved. The overall cost of 
higher education would be reduced by 6 percent.
    Here's how we derived that number:

     Studies have shown that 50 percent of community college 
enrollments and 35 percent of baccalaureate enrollments are in the top 
25 courses.
     Fifty percent of all higher ed enrollment is at CCs and 50 
percent is at 4-year institutions.
     Given the proportion of 2-year vs. 4-year colleges, about 
42.5 percent of all higher education enrollments are in the top 25 
courses.

    Twenty-five percent (50 percent of 50 percent in CC) + 17.5 percent 
(35 percent of 50 percent in baccalaureate).

     The average cost reduction of the projects using our 
redesign methodology in the Pew Program in Course Redesign is 40 
percent. (The savings rate would, in fact, be higher if we eliminated 
the redesign ``dogs''--i.e., those who did not fully follow our 
methodology.)
     40 percent of 42.5 percent = 17 percent.

    It is difficult to pin down exactly the dollar value of that 
savings since estimates about the total amount of higher education 
expenditures and the E&G portion of those expenditures seem to vary, 
depending on the source. (If you have those numbers, of course, it's 
easy to attach a dollar figure.)
    Here's one way of estimating. NCES says that total higher education 
expenditures are 2.3 percent of U.S. GDP, which was about $10 trillion 
in 2002.

     If 2.3 percent of U.S. GDP is spent on higher ed, total 
higher ed expenditures = $230 billion.
     If the portion devoted to instruction averages 35 percent, 
saving = $80.5 billion.
     Seventeen percent of $80.5 billion = $13.7 billion per 
year.
     $13.7 billion = 6 percent of the overall cost of higher 
education.

    Whatever the right number, as Everett Dirksen once observed about 
the Federal budget, ``A billion here, a billion there, and first thing 
you know you're talking about real money.''
    What would be the impact on higher education if all U.S. colleges 
and universities adopted NCAT's methods to redesign their top 25 
courses? The cost of instruction would decrease by approximately 16 
percent annually, and student learning and retention would improve.
    Here's how that 16 percent cost reduction figure is derived:

     About 42.5 percent of all higher education enrollments in 
the United States are in the top 25 courses.
     The average cost reduction of the projects that used 
NCAT's redesign methodology is 37 percent.
     Thirty-seven percent of 42.5 percent = 16 percent.

    Here's one way of estimating the dollar impact on all higher 
education spending:*
---------------------------------------------------------------------------
    * Estimates vary on the total higher education expenditures.

---------------------------------------------------------------------------
    Enrollment in the top 25 courses by sector in fall 2003 (IPEDS):

     1,412,851 at 2-year publics 138,109 at 2-year privates.
     722,478 at 4-year publics 542,982 at 4-year privates.
     807,014 at public universities 175,005 at private 
universities.

    Average cost of top 25 courses by sector in fiscal year 2003:

     $5,792,689,100 at 2-year publics $945,078,861 at 2-year 
privates.
     $3,702,701,800 at 4-year publics $4,644,670,594 at 4-year 
privates.
     $8,271,896,063 at public universities $2,993,983,829 at 
private universities.

          Total cost of top 25 courses = $26,351,020,246 
        (sector enrollments times sector lower-division cost per FTE).
          Savings = $9,749,877,491 per year (total cost of top 
        25 courses multiplied by 37 percent).

    [Whereupon, at 11:49 a.m., the hearing was adjourned.]