[Senate Hearing 112-930]
[From the U.S. Government Publishing Office]
S. Hrg. 112-930
IMPROVING COLLEGE AFFORDABILITY: A VIEW FROM THE STATES
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HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
ON
EXAMINING IMPROVING COLLEGE AFFORDABILITY, FOCUSING ON A VIEW FROM THE
STATES
__________
SEPTEMBER 13, 2012
__________
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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
TOM HARKIN, Iowa, Chairman
BARBARA A. MIKULSKI, Maryland MICHAEL B. ENZI, Wyoming
JEFF BINGAMAN, New Mexico LAMAR ALEXANDER, Tennessee
PATTY MURRAY, Washington RICHARD BURR, North Carolina
BERNARD SANDERS (I), Vermont JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, JR., Pennsylvania RAND PAUL, Kentucky
KAY R. HAGAN, North Carolina ORRIN G. HATCH, Utah
JEFF MERKLEY, Oregon JOHN McCAIN, Arizona
AL FRANKEN, Minnesota PAT ROBERTS, Kansas
MICHAEL F. BENNET, Colorado LISA MURKOWSKI, Alaska
SHELDON WHITEHOUSE, Rhode Island MARK KIRK, Illinois
RICHARD BLUMENTHAL, Connecticut
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, SEPTEMBER 13, 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
Bennet, Hon. Michael F., a U.S. Senator from the State of
Colorado....................................................... 3
Bingaman, Hon. Jeff, a U.S. Senator from the State of New Mexico. 38
Alexander, Hon. Lamar, a U.S. Senator from the State of Tennessee 40
Franken, Hon. Al, a U.S. Senator from the State of Minnesota..... 42
Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode
Island......................................................... 44
Witnesses
Howard, Muriel A., Ph.D., B.A., President, American Association
of State Colleges and Universities, Washington, DC............. 5
Prepared Statement........................................... 6
Longanecker, David A., Ed.D., M.A., B.A., President, Western
Interstate Commission for Higher Education, Boulder, CO........ 11
Prepared Statement........................................... 14
Morgan, John G., B.A., Chancellor, Tennessee Board of Regents,
Nashville, TN.................................................. 18
Prepared Statement........................................... 20
Preus, Camille, Ph.D., Commissioner, Oregon Department of
Community Colleges and Workforce Development, Salem, OR........ 26
Prepared Statement........................................... 28
ADDITIONAL MATERIAL
Response by Muriel A. Howard, Ph.D. to questions of:
Senator Enzi................................................. 51
Senator Blumenthal........................................... 52
Response by David A. Longanecker, Ed.D., M.A., B.A. to questions
of:
Senator Enzi................................................. 52
Senator Bennet............................................... 53
Senator Blumenthal........................................... 54
Response by John G. Morgan, B.A. to questions of:
Senator Enzi................................................. 55
Senator Blumenthal........................................... 56
Response by Camille Preus to questions of:
Senator Enzi................................................. 56
Senator Bennet............................................... 57
Senator Blumenthal........................................... 57
(iii)
IMPROVING COLLEGE AFFORDABILITY:
A VIEW FROM THE STATES
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THURSDAY, SEPTEMBER 13, 2012
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
The committee met, pursuant to notice, at 10:35 a.m., in
room SD-430, Dirksen Senate Office Building, Hon. Tom Harkin,
chairman of the committee, presiding.
Present: Senators Harkin, Enzi, Bingaman, Hagan, Merkley,
Franken, Bennet, Whitehouse, Blumenthal, and Alexander.
Opening Statement of Senator Harkin
The Chairman. Good morning. The Senate Committee on Health,
Education, Labor, and Pensions will come to order.
As the fall semester began in recent weeks, more than 21
million students enrolled or returned to college, whether on
campus or online. While this number sounds impressive, we are
reminded again on Tuesday by the OECD, the Organization for
Economic Cooperation and Development, that America continues to
lag other advanced nations and we now rank 13th when it comes
to younger adults with degrees.
As we know all too well, one of the main reasons that
America has fallen from the top spot is that college has become
increasingly unaffordable for a growing number of Americans.
During the August break, I heard repeatedly from students and
parents across Iowa about the financial squeeze they are facing
from the spiraling cost of college and, of course, their
increasing anxiety about the level of student debt. These are
the real stories of financial hardship behind the statistics
that we've heard over and over: how student debt has crossed
the $1 trillion mark; how average loan debt topped $25,000; how
public college tuition has tripled since the 1980s, outpacing
both inflation and family income.
America's system of higher education has been one of shared
responsibility. Students, families, States, and the Federal
Government all take a part in funding a college education. But,
in the past 30 years, we've witnessed a gradual and structural
realignment of each partner's share of the growing cost of
college. States are contributing less, while students and their
families are shouldering a heavier burden, financed largely
through the Federal Government's financial aid programs.
This cost shifting means that State and local support per
student is lower today than it was 25 years ago in constant
dollars. States collectively spend $6.12 per $1,000 in personal
income, down from $8.75 just in 1990, though personal income
has increased by 66 percent over that period. Moreover, States'
spending on higher education as a share of their budget is
declining. States now spend an estimated 11.5 percent on higher
education, down from 14 percent 20 years ago.
This declining investment means that students have to pay
more as public institutions try to cover the State cuts through
tuition hikes. Net tuition accounted for just 23 percent of
educational revenues in 1986. Today, it is more than 43
percent. Given the fact that 70 percent of America's college
students attend public colleges and universities, the national
implications of this State retrenchment for college access and
success are obvious.
Now, for its part, the Federal Government has stepped up
efforts to help students pay for college. I hope that we can
all acknowledge that this model of shifting cost is neither
sustainable nor desirable. To be fair, these trends mask
significant efforts by some States--admittedly, only a few--to
increase investments in higher education. I think it also
obscures the fact that funding alone will not necessarily make
possible what I hope is our shared goal for each and every
American to have access to high-quality, postsecondary
educational opportunities regardless of one's background. While
funding is essential, smart policies are integral to maximizing
the impacts of such investments.
With the committee's previous hearings on college
affordability, today's hearing will focus on what's being done
and how it can be replicated or adapted by others to keep the
dream of higher education alive for students. The previous
hearing emphasized promising strategies employed by innovative
colleges and universities to curb the cost while improving
student outcome. Today, we'll shift our attention to States and
their policies for improving affordability.
We are fortunate to have a distinguished panel of guests.
They will shed light on State efforts, policies, and
initiatives that hold promise for prioritizing and improving
college affordability. They will help identify State barriers
to innovation, efficiency, and effectiveness at both the
systems and the institutional levels. There is much room for
progress and improvement when it comes to our system of higher
education. It seems to me that a consensus is emerging from
these very productive hearings on the need to break with
business as usual.
Increasing college affordability is going to take
leadership, collaboration among all stakeholders, and a real
sense of urgency. I look forward to our continuing efforts in
this regard and our work with our distinguished Ranking Member,
Senator Enzi, and colleagues on both sides to tackle this
problem and to ensure that our higher education system remains
affordable, accessible, and resulted-oriented both for students
and taxpayers.
With that, I invite Senator Enzi for his opening remarks.
Opening Statement of Senator Enzi
Senator Enzi. Thank you, Mr. Chairman, and thank you for
continuing to focus the committee on the increasing challenges
that students and their families face in paying for college. As
you were making your remarks, I couldn't help but reflect back
on some comments by a former Governor of Tennessee and a former
University of Tennessee president who said that because of
Federal costs that the Federal Government has shifted to the
States, the only place that they have flexibility is in how
much they give to colleges. So we've added to the problem
somewhat there, too.
While there's very little left to say about how expensive
higher education has become, I recently heard a very disturbing
description of just how high college prices have climbed.
Earlier this summer, the Finance Committee held a hearing
focused on higher education provisions in the tax code. During
that hearing, one of the witnesses explained the following: If
milk and gas had risen as fast as college prices since 1980,
gas would be $13 a gallon today and milk would be $23 a gallon.
This is simply astounding and underscores the urgent need
for us to begin asking questions about the effectiveness of
current Federal student programs and how we can do things
better. We'll be looking to reauthorize the Higher Education
Act in the next few years and through that look for ways that
the Federal Government can better serve students. As we begin
that process, it's important that we consider what's being done
at the State level.
For that reason, we've asked our witnesses today to discuss
a few of the promising innovations already being implemented
throughout the States. Many of these could and should serve as
a model for future reforms in the Federal student aid programs
as we work to reverse the seemingly endless increases in
college costs.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Enzi.
As I said, we have an exceptional panel of witnesses here
today. I want to thank all of you for taking the time to be
here and sharing your experience. I will start, and I will
yield to others for introductions.
I will start by welcoming our first witness, Dr. Muriel
Howard, president of the American Association of State Colleges
and Universities. Before becoming president in 2009, Dr. Howard
was president of Buffalo State College, a campus of more than
11,000 students, approximately 1,700 faculty and staff, a
financial operation of more than $214 million.
Prior to joining Buffalo State, she was the vice president
for Public Service and Urban Affairs at the University of
Buffalo, where she served in various leadership capacities over
a 23-year period. A graduate of the University of New York's
Richmond College, Dr. Howard holds a master's degree in
education and a Ph.D. in educational organization,
administration, and policy from the University of Buffalo. She
has also received six honorary degrees and many awards for her
contributions to public higher education, for service to her
community, and her commitment to diversity.
We thank you for being here.
Next, I would yield to our distinguished Senator from
Colorado for purposes of our next introduction.
Statement of Senator Bennet
Senator Bennet. Thank you, Mr. Chairman, and thank you
again for holding this important hearing. It's my honor to
introduce Dr. David Longanecker to the committee. Dr.
Longanecker has served as president of the Western Interstate
Commission for Higher Education in Boulder, CO, since 1999. The
commission is a regional compact among 15 western States which
seeks to improve access to higher education.
Previously, Dr. Longanecker served for 6 years as the
Assistant Secretary for Postsecondary Education at the
Department of Education. In this role, he developed and
implemented initiatives that provided more than $40 billion
annually in student assistance.
Prior to that, he served as the State higher education
executive officer in both Colorado and Minnesota. He was also
the principal analyst for higher education for the
Congressional Budget Office, and welcome back.
Dr. Longanecker has worked closely with our Lieutenant
Governor, Joe Garcia, who serves as the executive director of
the Colorado Department of Higher Education. This collaboration
promises exciting developments for the future of higher
education in Colorado.
Dr. Longanecker has been an exemplary leader in education,
both nationally and in Colorado, and I look forward to his
testimony.
Thank you for being here today.
The Chairman. Thank you very much, Senator Bennet.
I would yield to Senator Alexander for purposes of our next
introduction.
Senator Alexander. Thanks, Mr. Chairman, and thanks for the
series of hearings. It's my privilege to welcome John Morgan
here. John is one of our most experienced State officials. He
has worked with the State of Tennessee for 30 years. He has
been the Controller of the Treasury. He was deputy to our
Democratic Governor before the election of our new Republican
Governor, with whom he now works. He is chancellor of the
Tennessee Board of Regents, which is the sixth largest system
of public higher education in the country. It has a number of
4-year institutions and 2-year institutions.
What I'm especially looking forward to hearing about is the
system that he and Governor Bredesen put in place and that
Governor Haslam and he are now implementing, which has our
State focusing more of our dollars for higher education on
retaining and graduating students than simply the number who
are enrolled. One way to save money if you're going to a 4-year
institution is to stay and graduate in 4 years or 5 years
instead of 6 years, which is the norm.
Welcome, Mr. Morgan.
The Chairman. Thank you very much.
The next witness will be Dr. Preus. As commissioner of
Oregon Community Colleges, Dr. Preus provides leadership and
advocacy with the Governor, the legislature, and other
statewide stakeholders for Oregon's 17 community colleges,
seven workforce investment areas, and many community-based
organizations. Prior to her appointment as Commissioner, Dr.
Preus held leadership roles in workforce development at the
local end State levels.
She has also had private sector experience as a chemist and
quality control manager with United States Steel. She serves on
numerous boards across the country and graduated from
Cumberland Junior College and Middle Tennessee State
University. She earned a master's in business administration
from Indiana University and her doctorate from Oregon State
University.
We welcome you all, a very distinguished panel. All of your
statements will be made a part of the record in their entirety.
What I would ask is that you just give a brief summation in 5
to 7 minutes. We'll go down the line, and then we'll open it up
for a dialog.
Dr. Howard, we'll start with you. Welcome and please
proceed.
STATEMENT OF MURIEL A. HOWARD, Ph.D., B.A., PRESIDENT, AMERICAN
ASSOCIATION OF STATE COLLEGES AND UNIVERSITIES, WASHINGTON, DC
Ms. Howard. Good morning, and thank you, Chairman Harkin,
Ranking Member Enzi, and distinguished Senators of the
committee. As you know, my name is Muriel Howard, and I'm
president of the American Association of State Colleges and
Universities, henceforth referred to as AASCU.
AASCU's membership comprises of approximately 420 public
institutions that vary by enrollment, size, and mission, but
are primarily recognized as State comprehensive master's
institutions. It is an honor for me to appear before you today,
and I applaud the committee for continuing to examine this
important subject of college affordability.
College affordability is the responsibility of four primary
stakeholders, the Federal Government, State government,
institutions, and families. The Federal Government has
strengthened its commitment in recent years with increased
funding for the Pell grant. And I thank each of you for that,
especially you, Mr. Chairman.
Institutions have a responsibility to provide a quality
education while maintaining reasonable tuition. I am pleased to
report that public 4-year institutions have been working hard
to be responsible partners in the college affordability
compact. These institutions provide substantial grant aid to
financially needy students, and institutional spending data
from the past decade illustrates that master's comprehensive
public colleges and universities have kept overall increases in
the cost of educating students at roughly the rate of
inflation.
So why the dramatic increase in tuition during the past
several years? Simply put, State investment in higher education
is on a downward spiral. Per student, State investment in
higher education has deteriorated over the past 25 years.
Numerous studies have cited this as the single greatest factor
in the rise of tuition at public 4-year institutions.
States, though, can help by investing in student financial
need-based aid programs. State grant-aid programs award money
for college, based on financial need, academic merit, or a
combination of both. Over the past 20 years, there has been an
increase in awarding more merit-based aid than there has been
need-based aid. The shift toward merit aid programs is a step
backward, in my opinion, in addressing college affordability.
Merit-based programs distribute aid to students from higher
income backgrounds, awarding taxpayer funds to students who
would likely have enrolled in college regardless of the
financial aid.
States, on the other hand, should provide greater
flexibility around institutional policies. Flexibility is
essential when resources are constrained. Greater institutional
flexibility in setting tuition, financial aid, the procurement
and sharing of goods and services, and adjusting regulations
involving capital improvements are critical.
In the area of tuition policy, it's important for me to
note that public institutional leaders in 40 States do not have
complete autonomy to establish their own tuition rate. This
authority rests in either a State agency or the State
legislature. Likewise, the institution should have flexibility
and control to determine how tuition dollars are allocated
across the campus, including the use of tuition dollars for
student financial aid.
States should ensure that students are college- and career-
ready. As the committee knows, 46 States have adopted the
Common Core State Standards that are designed to better prepare
students for college and career success. Implementation of
these standards will reduce remediation costs and time to
degree, thereby reducing the overall financial burden on
students. Proper and successful implementation of the new State
Standards must involve higher education.
States should also consider mission-driven, flexible, and
equitable performance-based funding systems. You will soon
learn much more about that from the Tennessee witness this
morning.
Finally, an area where the Federal Government's leverage
can have an important impact on college affordability is
through maintenance of effort provisions. The Federal
Government has pursued this strategy in recent years through
several legislative vehicles. AASCU's analysis indicates that
Federal maintenance of effort provisions are successful, and
that without them States would have reduced public higher
education funding more dramatically, which would result in even
higher tuition increases.
In closing, State funding is the most critical component to
ensuring college affordability, although I have highlighted
several non-financial related policies that can also positively
affect institutions with keeping the overall cost to students
as low as possible.
Thank you, and I look forward to the discussion.
[The prepared Statement of Ms. Howard follows:]
Prepared Statement of Muriel A. Howard, Ph.D., B.A.
summary
The introduction notes that there are four main actors in higher
education financing and ensuring affordable college access--Federal and
State governments, institutions of higher education, and families. The
primary reason for tuition increases at public institutions is the
reductions or lack of sufficient increases in State higher education
funding. Public master comprehensive institutions have held per-student
costs to the rate of inflation during the past decade.
Dr. Howard discusses State strategies that can help promote college
affordability and student success. She notes four specific areas
including: policies providing State funds in support of students on
need-based, rather than merit-based, financial aid programs; policy
reforms that provide greater flexibility to institutions and which in
turn can generate cost savings and better utilization of moneys;
implementation of college and career-ready State academic standards;
and the use of performance-based funding initiatives.
States should be pursuing policies that award State aid through
need-based formulas, ensuring better affordability to low-income
students. Under flexibility, the testimony calls for greater autonomy
for institutions setting and controlling their own tuition; relief from
restrictions on the use of tuition funds, including the allocation of
awarding financial aid; easing requirements within State procurement
rules for acquiring goods and services; and finally, simplifying the
requirements associated with the construction of capital projects.
College-ready academic standards will result in better prepared
students, which may in turn reduce costs by decreasing the time
required to degree completion. Finally, performance-based funding may
be a useful tool, but has not to date demonstrated its relationship to
affordability.
The conclusion highlights what the Federal Government can do to
support the State's role in affordability. Since direct support to
institutions is the single, greatest factor in tuition prices, the
Federal Government can encourage continued State support through
maintenance of effort provisions in legislation. It is suggested that
education policy should be viewed by State and Federal policymakers in
a broad
P-20 context and provide sufficient flexibility while remaining goal
oriented.
______
Thank you Chairman Harkin, Ranking Member Enzi, and other
distinguished Senators for affording me this opportunity to speak to
the States' role in making college affordable. I commend the committee
for exploring this topic. My name is Muriel Howard and I have the honor
of serving as the president of the American Association of State
Colleges and Universities, AASCU. Now in its 51st year, AASCU is a
national leadership association consisting of some 400 presidents,
chancellors and system heads of public 4-year colleges and
universities. The group is diverse in its membership, ranging from
small, liberal arts institutions enrolling a few hundred students to
research-intensive universities that enroll tens of thousands of
students. However, we are mainly recognized as representing the
comprehensive, master's institutions which include nearly all the
public Historically Black Colleges and Universities (HBCUs), Hispanic
Serving Institutions (HSIs) and numerous other Minority Serving
Institutions (MSIs). AASCU institutions offer affordable access to a
quality postsecondary education to nearly 4 million students annually.
College affordability is a responsibility of four primary
stakeholders: the Federal Government, State government, institutions,
and families. The Federal Government has strengthened its commitment in
recent years with increased funding for the Pell grant. I want to thank
each of you for that commitment, and to extend special appreciation to
you Chairman Harkin. Families, as the consumer, have a role in paying
for some portion of the student's college education. Institutions have
a responsibility for maintaining tuition prices at a reasonable level
and for working to restrain college costs. Public 4-year institutions
have been a responsible partner in the compact to mitigate rising costs
associated with attending college. In addition to awarding substantial
grant aid to financially needy students, institutional spending data
from the past decade illustrate that master comprehensive public
colleges and universities have kept overall increases in the cost of
educating students to roughly the rate of inflation. This analysis of
institutional spending, conducted by the Delta Cost Project at the
American Institutes of Research, indicates that it is these
institutions that are the most efficient in American higher education,
with spending-per-degree the lowest of any sector.\1\
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\1\ Trends in College Spending, 1999-2009, Delta Cost Project.
http://www.deltacostproject.org/analyses/delta_reports.asp.
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So why the dramatic increase in tuition prices during the past
several years? The answer leads us to the final major player in
ensuring college affordability--the States. Per-student State
investment in higher education has deteriorated over the past 25 years.
Numerous studies have highlighted this trend and have correctly linked
it as the single largest reason for the rise in tuition at public 4-
year institutions. I recognize that as the fiscal situation at the
Federal level has become alarming, States also have been facing
challenging budgetary circumstances, especially since they must abide
by balanced budget requirements. However, while State investment is the
most important factor in maintaining affordable tuition, there are
other avenues for States to explore that will help ease the financial
burden of a college education. I will briefly discuss four strategies
States can utilize to improve college affordability and student
success.
state investment in student financial need-based aid programs
State disinvestment in public colleges and universities and the
subsequent corresponding increases in tuition prices have raised the
profile of State grant aid as a vital component in financing a college
education for low- and middle-income students. State grant aid programs
award money for college based on financial need, academic merit or a
combination of need and merit. These programs are typically funded
through State taxes or lottery revenues. Each State has a unique
approach to State aid, with some States having multiple grant programs.
State student aid grants remain a centerpiece of college finance
for millions of Americans; however, these grant funds are increasingly
being distributed based on academic merit, as opposed to financial
need. According to the National Association of State Student Grant and
Aid Programs (NASSGAP), almost 4.3 million students received a total of
$9.2 billion in State grants in 2010-11.\2\ Of the State grant money
awarded that year, 71 percent was need-based and 29 percent was merit-
based. In contrast, in 1992-93, 90 percent of State grant funds were
awarded at least partially on students' financial circumstances.\3\
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\2\ National Association of State Student Grant and Aid Programs
(2012). 42nd Annual Survey Report on State-Sponsored Student Financial
Aid: 2010-2011 Academic Year. Retrieved from http://www.nassgap.org/
document_download.aspx?documentID=880.
\3\ Ibid.
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The shift toward politically popular merit-based aid is a step
backward in the effort to boost college attainment. Unmet financial
need is still a major hurdle for college enrollment and completion for
low-income students. Merit-based programs often distribute aid to
students from higher income backgrounds, awarding taxpayer funds to
students who would have likely enrolled in and finished college without
the help of the subsidy. Awarding State grants based solely on high
school performance remains an inefficient use of precious State
resources, perpetuates longstanding inequities in American society and
may be contrary to the fundamental purposes of student financial aid.
State policymakers should consider the recommendations of a paper
policy issued this spring by the Brookings Institutions, Beyond Need
and Merit: Strengthening State Grant Programs. The report calls for
State grants targeted to students with financial need while also
requiring students to meet basic academic milestones toward timely
degree completion. The report's recommendations include the following:
1. Target State grants to needy students with the potential to
succeed. By restricting aid to low- and middle-income students, States
can use their resources most efficiently. The report also encourages
States to look beyond 18-24-year-old college students to adult
populations, and possibly implementing a separate program for these
students.
2. Consolidate and simplify student grant programs, making them
easier to understand and navigate by families. The system of
institutional, State, and Federal aid is complicated, and States should
make every effort to merge their grant programs and make them
understandable for students and families.
3. Use incentives to drive timely degree completion. Provide grant
aid incentives to students, such as rewarding additional aid at
specified milestones in earned credits hours. Programs must have well-
designed incentives for students to make progress toward finishing
their degrees on time. This should not include high GPA requirements.
4. States that reduce funding for grant programs or make other
programmatic changes should do so without harming students with the
most financial need. In States where grant program funding is reduced,
or program eligibility requirements or other program reforms are
altered, programs should not change academic requirements that have a
deleterious effect on low-income and nontraditional student
participation.\4\
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\4\ Brookings Institution State Grant Aid Study Group (2012).
Beyond Need and Merit: Strengthening State Grant Programs. Brown Center
on Education Policy at Brookings. Retrieved from http://
www.brookings.edu/ /media/research/files/reports/2012/5/
08%20grants%20chingos%
20whitehurst/0508_state_grant_chingos_whitehurst.pdf.
---------------------------------------------------------------------------
greater state flexibility involving institutional policies
A second area of action that States can take to enhance college
affordability involves the granting of greater flexibility to public
colleges and universities on a range of institutional matters. In the
absence of increases in State operating support necessary to keep
tuition prices from rising above the rate of inflation, States can
provide greater autonomy to institutions, helping them in their quest
to maximize the efficiency and prudent utilization of scarce resources,
which can in turn help reduce the college cost burden to students.
One area where flexibility can be most helpful is in the setting of
tuition policy. The tuition dollars paid for by students and their
families account for an increasing share of public universities'
general fund budgets. Greater flexibility and institutional control in
the setting of tuition rates and the subsequent utilization of the
tuition revenues allows for more strategic use of these moneys. Yet, in
40 States, an entity other than the institution has control over such
policy; many times authority over tuition matters is in the hands of
State agencies and even State legislatures.\5\ As an example of a new,
rational approach to tuition policy, lawmakers in New York have
implemented a plan that allows the State's public universities to raise
tuition prices moderately over the next several years and to use a
portion of the revenues strategically in ways that will foster college
affordability and generate greater institutionally led economic
development activity. This approach provides students and families with
more certainty in college planning, and institutions with greater
assurance in their fiscal planning in the years ahead.
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\5\ State Tuition and Financial Aid Assistance Policies for Public
Colleges and Universities. State Higher Education Executive Officers,
2010-11. http://www.sheeo.org/finance/tuit/2010-
2011Tuition_and_fees.pdf.
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Likewise, public colleges and universities must have sufficient
flexibility in the allocation of financial aid dollars provided to
students. AASCU institutions enroll a large proportion of students from
low-income backgrounds, and therefore strive to maximize the utility of
grant aid to students. The flexible, strategic use of institutional
grant aid is essential if our States and the Nation are to meet
ambitious--and vital--educational attainment goals.
Another opportunity where States can provide institutions with
greater latitude which can in turn lead to reduced costs for students
involves State policies and mandates pertaining to the procurement of
goods and services. Collectively, public colleges and universities
spend billions of dollars annually on everything from laboratory
equipment to energy to insurance; procurement policies and practices
affect virtually every aspect of campus operations.
A 2010 study of institutional and State procurement policies and
practices, conducted by AASCU in collaboration with the National
Association of Educational Procurement (NAEP), illustrated that some
States' procurement policies inhibit public colleges' and universities'
ability to fully maximize purchasing power, generate cost savings,
enhance product/service quality and improve the efficiency of
institutional procurement operations.\6\
---------------------------------------------------------------------------
\6\ Public College and University Procurement: A Survey of the
State Regulatory Environment, Institutional Procurement Practices, and
Efforts Toward Cost Containment (April 2010). American Association of
State Colleges and Universities and the National Association of
Educational Procurement. http://www.aascu.org/uploadedFiles/AASCU/
Content/Root/PolicyAndAdvocacy/PolicyPublications/
aascunaepfinal%281%29.pdf.
---------------------------------------------------------------------------
The AASCU/NAEP study offered a number of State policy reforms to
contain costs and improve productivity in institutional procurement.
These include allowing institutions to participate in group-purchasing
consortiums, making institutional participation in State purchasing
contracts voluntary, allowing institutions to conduct negotiations with
suppliers beyond the competitive bidding process, and to review, and if
warranted, increase the minimum dollar threshold for purchases
requiring State approval and adjust minimum thresholds involving formal
competitive (sealed) bids. The report features case studies from three
States--Colorado, Kansas and Virginia--where public universities have
been granted greater control over procurement matters, allowing the
institutions to save money and reallocate funds to where they make the
most impact: in the classroom.
A final area where greater State flexibility and autonomy can lead
to improved cost savings, institutional performance and student and
taxpayer savings is in the area of capital construction. As with
tuition, financial aid and procurement policies, the framework
involving oversight of the campus construction process varies
considerably by State. A common refrain echoed by frustrated campus
officials is that the maze of State approval processes, regulations,
mandates and various other administrative requirements often slow
construction timelines down to a glacial pace. The extent of State
bureaucratic red tape often dampens the pace at which the positive
outcomes associated with campus improvements can be realized, among
them being the creation of jobs and spin-off economic development
associated with construction projects, and students' and professors'
ability to use the facilities in a timely manner. Surely, moneys can be
better spent on supporting the core teaching and learning enterprise
rather than on the capital construction process, where an overwhelming
and unnecessary slate of State rules and reporting requirements siphon
off precious institutional resources.
In the overarching call for greater State flexibility as it affects
campus policies and practices, one thing must be made clear: greater
autonomy in no way should be construed as a diminishment of
institutional accountability. As stewards of the public's trust, State
colleges and universities must rightfully account for all resources,
public and private, in order to fully leverage every dollar in the
advancement of the teaching, research and service missions of these
public enterprises.
increasing college readiness--implementation of the common core
state standards
A third area where States are demonstrating leadership and which
holds strong promise for raising students' readiness for and
participation in postsecondary education involves new college and
career-readiness academic standards. While nearly all the States have
adopted the Common Core State Standards, a few have developed their own
set of standards. The Common Core State Standards are designed to
better prepare students for success in college. This should lead to
reduced time-to-degree, thereby reducing the overall cost burden on
students, and more efficient use of institutional resources. However,
proper and successful implementation of the new standards by States
must involve the higher education community and more specifically,
public institutions of higher education. Ensuring that both K-12 and
postsecondary faculty have a working knowledge of the standards,
through strong working partnerships, is essential. In addition, States
must engage their higher education institutions and systems in the
development and implementation of learning assessments associated with
the new curricular standards. It is through these partnerships that
better curriculum and course alignment will occur, along with
strengthened pre-service and in-service teacher development programs.
mission-driven, flexible and equitable performance-based funding
systems
A final activity that I will discuss involves a more strategic
State approach in the allocation of institutional operating support.
Over the last 3 years, many States have developed performance-based
funding (PBF) systems for public colleges and universities. PBF systems
tie a portion (or all) of an institution's State funding to performance
on a series of metrics, such as student retention and degree
completions. The objectives of these systems are to incentivize
institutions to address a variety of State strategic goals, such as
productivity improvement, cost savings and workforce development. While
this approach to higher education finance is not new, best practices
gleaned from prior attempts and advances in State data collection have
led to a series of promising performance-based funding programs. In
particular, Tennessee and Pennsylvania have innovative approaches that
account for institutional differences while still driving performance
improvement. AASCU supports State experimentation with performance-
based funding systems that account for the diverse missions among State
institutions and that award institutions for boosting measures of
success for low-income students.
in conclusion
I began my remarks by highlighting that there are multiple entities
involved in making higher education affordable. The Federal
Government's role does not merely need to be constrained to student aid
programs. In the last reauthorization of the Higher Education Act, as
well as in several other pieces of legislation, provisions have been
inserted requiring States to maintain a certain level of funding
support for public higher education institutions. AASCU's own analysis
indicates that Federal ``maintenance of effort'' provisions are
successful and that without them States would have reduced higher
education funding more dramatically over the past several years.\7\
Given the strong relationship between State funding for public higher
education and tuition costs at these institutions, it is clear that
without these Federal maintenance of effort requirements, tuition costs
would have increased even more dramatically in many States.
---------------------------------------------------------------------------
\7\ Update on Federal Maintenance of Effort Provision: Reinforcing
the State Role in Public Higher Education Financing (July 2012).
American Association of State Colleges and Universities. http://
www.aascu.org/policy/publications/policy-matters/2012/
MaintenanceofEffort-II
.pdf.
---------------------------------------------------------------------------
The maintenance of effort provision contained in the Higher
Education Act is rather weak compared to provisions in other education
and healthcare measures. As such, higher education is often squeezed
out of the budget process as States meet Federal funding requirements
established in P-12 education programs, as well as in meeting Medicare/
Medicaid costs. While there is widespread acknowledgement that higher
education is a major State economic driver, the reality is that State
budget priorities center on P-12 education funding, Medicare/Medicaid
programs, and public safety/corrections before higher education. While
recognizing there are many views on the subject of maintenance of
effort, I simply urge Congress to fully understand the interplay of
these provisions. It is certainly within the Congress' purview to
remove these Federal requirements; however, if there are to be Federal
provisions, then they should be treated as equally as possible in order
to provide States with some flexibility to fund all of them.
State funding is the most critical component to any State higher
education activity; however, I have highlighted several other non-
financial related policies that can also have a positive effect on
assisting institutions with keeping the overall cost burden to students
as low as possible.
American higher education is a key generator for economic
prosperity. We are all well aware of the statistics related to the jobs
that will require a postsecondary education in the years ahead. States
and the Federal Government need to examine education in the context of
a P-20 continuum and invest and implement policies accordingly. There
is not a one-size-fits-all solution, thus these policies should provide
needed flexibility while remaining goal-oriented.
The Chairman. Thank you very much, Dr. Howard.
Dr. Longanecker.
STATEMENT OF DAVID A. LONGANECKER, Ed.D., M.A., B.A.,
PRESIDENT, WESTERN INTERSTATE COMMISSION FOR HIGHER EDUCATION,
BOULDER, CO
Mr. Longanecker. Mr. Chairman and members of the committee,
good morning, and thank you for the opportunity to be with you
today.
For the record, I'm David Longanecker. I'm president of the
Western Interstate Commission for Higher Education, which is a
federally chartered interstate compact that has the simple
mission of trying to expand access to high-quality
postsecondary education to the citizens of the West. It
represents the 15 Western States. There are some States that
think they're western, but they didn't join WICHE, so they're
not part of the West.
[Laughter.]
We're here today to talk about improving college
affordability. More specifically, I was asked to talk about the
strategies for improving college affordability that are being
designed and implemented at the State level, and I'll focus on
the West.
The 21st century has really brought a new way of thinking
about what affordability means, at least at the State level.
Affordability now refers not only to what students have to pay
and their families have to pay, but also what the States can
afford. There have been three waves that really have created
this change in philosophy from one that's focused almost
exclusively on students to one that's focused on both students
and State resources.
The first is the rapid increase in the demand for higher
education that has occurred. It has been driven by the needs of
our Nation for a better educated population and by the
increasing returns on investment to a college education for
individuals. But, the result is a much larger share of our
population going to college than was in the past, and that
makes the limited funds available to the States to be spread
more thinly.
The second wave is really an evolution in the philosophy
about who should pay for college. Many at the State level now
see higher education as having great benefits as both a public
good and as a private good, and, thus, redefining how those
costs should be shared by students and government has been a
factor in what has been occurring recently.
And, third, the exceptional financial difficulties the
States have faced over the last few years have really required
that States look at all public services, including higher
education, in a different way and work on doing more with less.
To find the right balance between public and private benefits
and affordability, States are pursuing a number of very
creative new approaches to maintaining affordability. Some of
these policies and practices focus on improving the efficiency
and the effectiveness in the delivery of education, what I'll
refer to as supply-side activities.
Perhaps the most popular of those is performance funding.
Tennessee is sort of a leader in this area, and I'm sure you'll
hear something about that. It's pretty much all the rage in
higher education these days. In the West, about half of the
WICHE States are involved with performance funding. Most of
those focus on the completion agenda. Some people have said
they think that the completion agenda is an anti-access agenda
and an anti-affordability agenda. They're absolutely wrong.
As Senator Alexander mentioned, if institutions are
rewarded for performance on the completion of their students,
they're going to find a way to get their students to completion
quicker and more likely to completion. Both of those are going
to reduce the costs and increase the benefits to the students
who are involved. So from our perspective, it's a very positive
activity.
A number of our States, in addition to working on that, are
working explicitly in their performance agreements to reduce
equity gaps that exist in higher education. That would be true
in Colorado and in Nevada. In Washington State, the community
colleges and technical education system has developed a
performance-based funding system that rewards students at
different benchmarks as they progress, because the research
suggests that students who achieve those benchmarks are more
likely to complete their education. Oregon is exploring a
performance-based funding strategy that, if adopted, will tie
funding to institutions based on their delivering education at
a highly efficient rate. I'll leave it to Dr. Preus to explain
that in greater detail for you.
An alternative to outcomes or performance-based funding is
incentive funding. Many of the States are using incentive funds
to encourage institutions to change the way in which they're
doing business and to be more affordable. In South Dakota,
while they have eliminated this recently, they were providing
funding for institutions to adopt a program of studies that was
developed by the National Center for Academic Transformation
which promotes the use of hybrid, technology-enhanced
instruction which proves to have higher student learning at a
substantially lower cost.
The California legislature is considering designating a
special funding stream to enhance student success in the
California community colleges, specifically, through a variety
of academic and student support services. So you've got a
variety of supply-side things.
On the demand side, we have traditionally at the State
level focused on need-based student financial aid or, more
recently, as Muriel indicated, merit-based aid programs. We're
still using financial aid as a tool, but we're refining that.
In Washington State, which has had the strongest financial aid
system in the West, generally, they have a new public-private
partnership intended to complement their existing need-based
program which is intended to reward lower and middle-income
students who participate in STEM fields through combined public
and private funding.
In Massachusetts, they have a pilot program they're looking
at to pay at-risk students to take more credit hours, because
students who take more credits graduate sooner. The research is
pretty clear on that. That's an area that's been researched at
the institutional level by MDRC--found very promising results.
Massachusetts is looking to see if you can take it to scale at
the State level.
A number of States have developed blended programs that
take the best of merit-based programs and the best of need-
based programs and put them together. The program I like the
best is Oklahoma Promise Scholarship. From the eighth grade on,
if you take a rigorous curriculum in a high school and get
decent--doesn't have to be great--grades and stay like a nice
person--you don't go get a criminal record--you basically are
assured that your tuition will be paid. What's very interesting
is recently, last year, the legislature passed that that
program has to be funded before any other service of State
government receives any funding.
Now you have a combination of supply and demand, the way
States do that. Some of the States are actually blending the
two of those and putting both of those together. In the past,
Washington's finance policies have probably been the most in
sync of any of the Western States, and they're now making that
better with their new public-private partnership. They've also
passed a State law that says if the institutions raise their
tuition beyond a reasonable level, which they establish, then
the institutions have a requirement--the public institutions
have a requirement to fill in the additional financial need
that that has created for students with assessed financial
need.
Oregon is amplifying this program I just mentioned. I think
it's the most innovative of the new initiatives that are there.
I'll let Cam talk about that rather than me try to talk about
it. I think what they're talking about could be a real
transformation in the way in which we finance our education.
All in all, the unique times that we face have forced the
States to become very creative in fashioning ways to preserve
financial access for their students. While the changes wrought
by the new approaches are uncomfortable for many, because they
break the traditional concepts of affordability and of quality,
they are necessary if we are to assure that the students can
afford to go to college, given the times we face.
The unfinished agenda, I believe, is that the various
partners--the students, their families, the institutions, State
and Federal Government--need to work more in sync than we do
today to ensure that the various strategies we are doing blend
well together and ensure affordability in the world of limited
resources. The Federal Government could provide a major impetus
for such partnerships if its major student financial aid
programs and other programs required a stronger partnership
between the Federal, the State, and the institutions.
You've done this very effectively in the past. The old SSIG
program, at least in its initial incarnation, encouraged the
States to develop need-based aid programs. You could do it
again, and I encourage you to do so.
Thank you.
[The prepared statement of Mr. Longanecker follows:]
Prepared Statement of David A. Longanecker, Ed.D., M.A., B.A.
Summary
affordability
The 21st century has brought a new way of thinking about what
affordability means. Affordability now refers both to what students and
their families can afford and to what taxpayers can afford. The dilemma
is that the new focus on what the States can afford has tested the
limits of what students and their families can afford.
promising state-level supply-side interventions
The most popular current strategy involves the use of performance
funding to reward and induce greater affordability. Examples include
the following:
Colorado's new Master Plan for Higher Education will
reward institutions for greater success in reducing equity gaps in
graduation rates and numbers, as will Nevada's new funding formula.
The Washington State Community and Technical College
system has developed a performance-funding process that rewards
institutions based on the success of their students in achieving
various persistence benchmarks.
Oregon is exploring a performance-funding strategy that
will tie funding to institutions based on their delivering education at
a highly efficient threshold.
promising state-level demand-side interventions
Affordability initiatives have focused on reducing the cost to
students through financial aid.
Washington State has embellished its robust State need-
based financial aid program with a new public/private partnership
intended to reward lower and middle-income students who chose to major
in STEM fields of study.
Massachusetts has developed a pilot program to see if
providing grants to needy students who commit to taking more credits
each term will enhance their persistence and completion.
The Oklahoma Promise Scholarship assures eighth graders
who come from low- and moderate-income families that if they take a
rigorous curriculum in high school, get decent (but not necessarily
exceptional) grades, and stay out of trouble they will have their
tuition paid for at any State institution.
promising state-level interventions blending supply and demand efforts
WICHE has encouraged the Western States to integrate all of their
finance policies, so that they work in sync to assure affordable access
to and success in high-quality educational opportunities.
Washington has traditionally balanced a comparatively high
tuition structure at both the 2-year and 4-year level with a strong
need-based financial aid program.
Arizona integrated policies that sought to assure that the
State's three public universities would have sufficient funding to
thrive through the combination of State support and tuition revenue and
that increases in tuition would be matched dollar for dollar by
institutional funds for students with financial need (defined as Pell
grant recipients).
Oregon's recently adopted Shared Responsibility Program
creates a State policy based on an overall higher education financing
partnership with the State, the student, the student's family, the
Federal Government, and the institutions of higher education.
______
State Efforts to Assure Affordability in the New Normal
Good morning and thank you for the opportunity to testify before
you today. I am David Longanecker, president of the Western Interstate
Commission for Higher Education (WICHE), a federally chartered
interstate compact of the 15 Western States with the mission of
expanding access to high-quality postsecondary education for the
citizens of the West.
We are here today to talk about ``improving college
affordability''--more specifically, to talk about the strategies for
improving college affordability that are being designed and implemented
at the State level. WICHE is very pleased to have the opportunity to
join in this discussion because there are a number of very promising
State initiatives in the West and elsewhere dedicated to making college
more affordable.
But in addressing this set of policy initiatives, we must first
define what we mean by ``affordability.''
Since about the turn of the century, we at WICHE have been looking
at the concept of affordability in a new way--and very differently than
it had been defined in the last century.
Traditionally, the concept was quite simple. Affordability meant
colleges charge tuition that was affordable to those citizens who
wished to be students. The standard policy response, therefore, was to
keep tuition as low as possible. Many States even imbedded the concept
that college should be either free or as close to free as possible in
State law. This was particularly true in the West, where the traditions
of private higher education are not as strong as in other regions of
the country and where most higher education was provided with public
funding through public institutions.
In the middle of the last century both the Federal Government and
the States embellished the original concept in two important ways.
First, through the Higher Education Act of 1965 and amendments of 1972,
which established most of the current array of Federal student aid
programs, the Federal Government recognized that individual
affordability varied, depending upon a family's financial
circumstances, and public policy responded by developing the concept of
need-based financial aid. Second, it recognized that costs other than
tuition (living expenses, books, fees, etc.) also affected
affordability and needed to be taken into account. Following the
Federal lead, State public policy also recognized these two qualifying
conditions to individual affordability and universally established
State-level need-based financial aid programs.
Truth be told, however, the States were not nearly as committed to
this new concept of affordability as the Federal Government was. Many
of the States created their need-based programs only to receive the
matching Federal funds available through the State Student Incentive
Grant Program (SSIG). While every State ostensibly established a
``need-based'' program, only about a dozen established robust efforts.
In the West only California and Washington established serious need-
based grant programs; most States continued to abide by the original
concept, equating affordability with low tuition.
The 21st century has brought a new way of thinking about what
affordability means, at least at the State level. Affordability now
refers both to what students and their families can afford and to what
taxpayers can afford. Three factors have shaped this new concept of
affordability. First, the rapid increase in the demand for higher
education, driven by our Nation's need for more well-educated people in
the workforce and the increase in individual returns on investment from
higher education, has strained budgets and pushed legislators to look
at how much their States can afford to pay. Second, an evolving change
in philosophy about who should pay for higher education has shifted
policy in a number of States from an assumption that higher education
is primarily a public good that should be paid for primarily with
public funds to a political philosophy that assumes that higher
education has great benefits as both a public good and a private good
and that its cost should be more equally shared by students and
government. Some have seen this as a shift toward the privatization of
public higher education, but in truth it is more of a balancing of
costs between beneficiaries. Third, the exceptional financial
difficulties that States have faced as a result of two recessions in
quick succession at the beginning of this century have created what is
commonly referred to as the ``new normal,'' in which all public
services, including higher education, must do more with less and in
which evidence-based results are the metric. The result of these three
new ways of thinking about affordability in higher education has led to
State policy that relies more significantly on students paying a larger
share of the costs of college.
The dilemma, of course, is that the new focus on what the States
can afford has tested the limits of what students and their families
can afford--and it is concern about this aspect of affordability that
you are really focused on today. I just encourage you to recognize that
affordability is now confounded by the financial limits of State
government than it traditionally has been.
Today, I will share with you some of the most promising State
policies and practices intended to assure higher education
affordability, as we now define it. Some of these policies and
practices are supply-side interventions, focusing on changing
institutional behavior. Others are demand-side interventions, focusing
on changing student behavior. Yet others combine interventions focused
both on institutional (supply-side) and student (demand-side)
behaviors.
promising state-level supply-side interventions
It should be acknowledged that many of the activities of States to
increase productivity and efficiency in order to maintain affordability
have been fostered by the generous support of Lumina Foundation and the
Bill & Melinda Gates Foundation. A Lumina Foundation project,
originally dubbed ``Making College Affordable,'' provided substantial
funding to a bevy of States, which have provided the test bed for many
of the affordability initiatives referenced below. The Complete College
America organization has furthered these efforts by engaging more than
half of the States in developing clear metrics and methods for
improving their productivity.
Perhaps the most popular current strategy, both at the State
legislative and governance level, involves the use of performance
funding to reward and induce greater affordability. Examples include
the following.
Many States are adopting performance funding strategies
that will reward institutions for graduating more students. While this
may not appear to be an affordability strategy, it truly is.
Institutions realize that students who can't afford college are much
less likely to enroll in the first place and less likely to graduate if
they do enroll. Thus, for the institutions to reap the rewards of
graduating more students they must assure students that higher
education is affordable. In the West Colorado's new Master Plan for
Higher Education will reward institutions for greater success in
reducing equity gaps in graduation rates and numbers, as will Nevada's
new funding formula.
The Washington State Community and Technical College
system has developed a performance-funding process that rewards
institutions based on the success of their students in achieving
various persistence benchmarks. Again, while this may not seem like
affordability policy, it is, because students who persist at higher
rates reach their educational goals quicker and thus more affordably.
Oregon is exploring a performance-funding strategy that,
if adopted, will tie funding to institutions based on their delivering
education at a highly efficient threshold, comparable to the most
productive competitors in the higher education marketplace.
Other States are providing incentive funding for institutions that
adopt programs designed to focus on affordability.
South Dakota provided funding for institutions to adopt
programs developed by the National Center for Academic Transformation,
which promotes the use of hybrid (technology-enhanced) classroom
instruction that has demonstrably increased student learning at a lower
cost.
The California Legislature is considering designating
special funding to enhance student success in the California Community
Colleges through a variety of academic and student support services.
promising state-level demand-side interventions
Traditionally, affordability initiatives have focused on reducing
the cost to students through financial aid, and this remains fertile
ground for State policy innovations and interventions.
Washington State, which traditionally has had one of the
most generous and economically rational sets of State finance policies,
has embellished its robust State need-based financial aid program with
a new public/private partnership intended to reward lower and middle-
income students who chose to major in STEM (science, technology,
engineering, and math) fields of study.
Massachusetts has developed a pilot program to see if
providing grants to needy students who commit to taking more credits
each term will enhance their persistence and completion. This program
will test whether such pay-for-performance approaches--which have
worked at the institutional level, according to some research--can be
taken to scale at a State level.
A number of States have developed blended programs that
combine the best principles of both need-based and merit financial aid
programs. The Oklahoma Promise Scholarship, for example, assures eighth
graders who come from low- and moderate-income families that if they
take a rigorous curriculum in high school, get decent (but not
necessarily exceptional) grades, and stay out of trouble they will have
their tuition paid for at any State institution. A unique feature of
this program is that legislature is required to fund this program
before considering the budget of any other State services.
promising state-level interventions blending supply and demand efforts
WICHE has encouraged the States with which it works to integrate
all of their finance policies, so that they work in sync to assure
affordable access to and success in high-quality educational
opportunities.
In the past, Washington's finance policies were perhaps
the most in sync. The State has traditionally balanced a comparatively
high tuition structure (high by Western standards) at both the 2-year
and 4-year level with a strong need-based financial aid program. As
mentioned above, the State has recently enhanced this approach with a
new public/private partnership program--the Washington Opportunity
Scholars--to assure even greater affordability for students seeking
degrees in the urgently needed STEM fields of study. It has placed a
requirement in legislation that institutions that increase tuition
above recommended levels must meet the additional financial need that
such action causes.
Similarly, Arizona in the early years of the new century
adopted integrated policies that sought to assure that the State's
three public universities would have sufficient funding to thrive
through the combination of State support and tuition revenue and that
increases in tuition would be matched dollar for dollar by
institutional funds for students with financial need (defined as Pell
grant recipients).
Oregon's recently adopted Shared Responsibility Program is
perhaps the most innovative new initiative to blend supply- and demand-
side strategies. Built upon a similar program in Minnesota, Oregon's
program creates a State policy based on an overall higher education
financing partnership among the following players.
The State, which is responsible for supporting the
public good.
The student, who as the principle beneficiary of the
education is responsible for contributing what she/he is able
to provide.
The student's family, which has an obligation to
contribute what it reasonably can before it asks others to do
so.
The Federal Government, which is a significant
partner through the Pell Grant Program, the Direct Student Loan
Program, and the Federal Hope Tax Credits and Deductions.
The institutions of higher education, which have a
responsibility for operating as efficiently as possible to
sustain affordability.
This program fashions a partnership that defines in policy the
expected responsibility of each of these five partners and specifies
how the sum of their contributions will equal the desired whole.
Originally conceived primarily as a financial aid policy, the program
is now being viewed as the framework for all higher education funding:
State appropriations, tuition revenues, and State-based and privately
provided financial aid.
concluding remarks: a changing world for affordability at the state
level
The unique times we face, dubbed the new normal, have forced the
States to become quite creative in fashioning ways to preserve
financial access for their students, using a variety of new approaches.
While the changes wrought by new approaches are uncomfortable for many
because they break from traditional concepts of affordability, they are
necessary if we're to assure our students that they can afford to go to
college, and they're sufficient to the task. Observing these changes in
the West has been particularly interesting. The recent economic
distress hit many of the Western States more severely than of the rest
of the Nation, while affecting others much less. Yet the affordability
change agenda is nearly universal in the West in one fashion or
another. Those States most significantly impacted by the economic
downturns of the new century have focused primarily on supply-side
approaches, forcing greater productivity and efficiency reforms among
their institutions of higher education or combined supply- and demand-
side interventions. States that have weathered the recent economic
malaise will have also focused on improving affordability. Alaska and
Wyoming, for instance, have maintained their traditions of low-tuition
but created new, blended financial aid programs that reward students
for preparing well for college and performing well while in college,
with a particular focus on the most financially needy students.
The unfinished agenda, however, is for the various partners--
students, families, institutions, and State and Federal Governments--to
work more in sync to ensure that their various strategies blend well
and assure affordability in a world of limited resources. The Federal
Government could provide a major impetus for such a partnership if its
major student financial assistance programs required a stronger
partnership between Federal and State governments and institutions.
With limited resources at every level of government, it simply makes
sense to assure that these partners, along with students and their
families, work together as a team to win the higher education
affordability game.
The Chairman. Thank you very much, Dr. Longanecker.
Mr. Morgan, please proceed.
STATEMENT OF JOHN G. MORGAN, B.A., CHANCELLOR, TENNESSEE BOARD
OF REGENTS, NASHVILLE, TN
Mr. Morgan. Good morning, Chairman Harkin, Ranking Member
Enzi, and members of the committee. I appreciate very much the
opportunity and the invitation to be here. I am the Chancellor
of the Tennessee Board of Regents. As Senator Alexander noted,
it's the sixth largest higher education system in the country.
We're comprised of 13 community colleges, 27 technology
centers, and six public universities literally located across
the State. On a combined basis, we have in excess of 200,000
students in our system this fall.
We're one of two higher education systems in Tennessee. The
other is the University of Tennessee system, which governs the
four UT institutions and their activities. As was noted, your
fellow committee member from Tennessee was president of the
University of Tennessee system from 1988 to 1991, and it is
especially an honor for me to be here with him today. I suspect
he's the one responsible for me being here before you today. So
if you don't like what I have to say, you can blame him.
[Laughter.]
The Complete College Act of 2010 may be the boldest attempt
by any State yet to focus the energies and resources of its
public higher education enterprise on meeting the State's
development needs. Implicit within the Complete College Act is
the acknowledgement that the higher education funding structure
must support the State's priorities. However, the fiscal
reality within which we operate has been one of severely
reduced State funding over recent years.
Tennessee students now cover almost two-thirds of the cost
of their education at our public institutions. About 20 years
ago or so, that was about the State's share. The implication of
this trend, if it continues, will be detrimental to our higher
education aspirations. As resources have diminished,
expectations for our systems have grown. The Complete College
Tennessee Act included several important elements aimed at
transforming our public higher education system into a more
efficient, effective, and outcome-focused enterprise.
Perhaps most importantly for today's discussion, the
Complete College Act called for our coordinating board, the
Tennessee Higher Education Commission, to create a formula to
allocate available State funding to public higher education
institutions based on outcomes. Historically, Tennessee, like
most other States or many other States, based the allocation of
State appropriations mostly on enrollment. Typically, it was
the number of students enrolled on the 14th day of the fall
semester. The incentive was pretty clear: Enroll as many
students as you can each year.
In some ways, the new outcomes-based formula turns the old
system on its head. Attachment A of my written testimony shows
the outcomes upon which the formula is built, one set for
community colleges and a similar but appropriately different
set for universities. These outcomes are weighted differently
across institutions, thereby recognizing differences in
institutional missions.
As you can see in the examples, the outcomes formula is
heavily weighted around student retention, progression, and
ultimate success. And, importantly, as Dave said, it's the
numbers of students meeting benchmarks, the numbers of
credentials awarded, not just the rates of success. Access and
enrollment are still important.
One very important aspect of the outcomes-based formula
that, frankly, I neglected to note in the written testimony is
that student success outcomes based on progression and awards
attributable to students from low-income households defined as
Pell eligible and adult learners earn 40 percent premium
compared to other students. It's heavily weighted toward
dealing with students that, in order for us to meet our goals,
we have to be more successful with. These are students who,
historically, we have been least successful with.
So we're changing. We're adopting strategies that we
believe will lead to student success. A few examples: Our
community colleges are piloting cohort-based programs modeled
after the successes of our Tennessee Technology Centers. Our
institutions are implementing a variety of intentional and
intrusive student advising approaches, including early alert
and intervention systems, default curriculums for undeclared
majors, degree mapping, individualized graduation plans--a
whole host of strategies.
The performance of our presidents in our system is being
evaluated on progress toward completion goals and improved
outcomes. Working with the UT system and several private
institutions, we've developed 49 universal transfer pathways in
29 academic disciplines that guarantee seamless transition from
2-year programs to 4-year universities. There are many more:
Our participation in Access to Success, Completion Academies,
the Degree Compass technology that's being deployed at Austin
Peay State University. A whole host of strategies are being
employed.
We continue to work closely with Complete College America,
and we agree with their assertion that time is the enemy.
Students who must drop out are less likely to return and
complete their degrees and certificates. If the time to earn a
4-year degree, Senator, could actually be 4 years or less, then
everybody wins. If students come prepared and with credits
already earned through dual credit, dual enrollment programs at
their high schools or prior learning credits for adult
learners, then they are much more likely to finish and finish
faster. We are aggressively expanding those programs in
Tennessee. All of this activity is really being driven by the
outcomes-based formula.
We very much appreciate your attention to this important
subject, and we appreciate the help that you can provide at the
Federal level. A few ideas are included in my written
testimony. From reviewing the testimony of the other panelists,
they have better ideas than I had. It is important that we
think about Federal financial aid in a more flexible way, that
we're able to support program structures that we know will work
better than the past and traditional practices, and that's not
always easy.
In closing, thank you for the opportunity to be here, and
I'll be happy to respond to any questions that you may have.
[The prepared statement of Mr. Morgan follows:]
Prepared Statement of John G. Morgan, B.A.
summary
In January 2010, the Tennessee General Assembly enacted the
Complete College Tennessee Act, arguably the boldest attempt by any
State in the country to focus the energies and resources of its public
higher education enterprise on meeting the State's development needs.
Implicit within the CCTA is the acknowledgement that the higher
education funding structure must support the State's new priorities.
While student fees have increased at the institutions, growth in
enrollment, declining State funding, and cost inflation have combined
to produce real reduction in funds available to the institutions to pay
for educational services. Yet, as resources have diminished,
expectations for the outcomes of our system and the institutions have
grown. The result of the convergence of these circumstances is to
require every decision about resource allocation at every level to be
viewed through the lens of its impact on outcomes.
Many elements of the CCTA have direct impact on college
affordability by improving operating efficiencies, reducing time to
degree and focusing resources on strategies that lead to greater
success.
But perhaps most importantly, the CCTA called for the creation of a
formula to fund public higher education based on outcomes like
increasing the numbers of degrees, diplomas and certificates awarded.
As important as increasing the numbers of students with credentials is
ensuring productivity as well as quality. Academic standards, integrity
and quality must continue or be enhanced. It's quality of the workforce
that will drive the economy, not just the number of people with
degrees.
However, a significant challenge exists for TBR and its constituent
institutions. To be successful in meeting their goals, every
institution must be more successful with students who have historically
been least successful reaching their education goals, particularly low-
income first generation students, adult learners and under-represented
minorities. Helping these students will require more hands-on, high-
touch and high-tech efforts, all of which also translate to high cost.
Despite our challenges, we are on the right track. With the right
resources and the right conversations--like the one we're having
today--Tennessee can lead the way in workforce development and economic
growth.
______
The combination of passage and implementation of the Complete
College Tennessee Act and the First to the Top Act have propelled
Tennessee to the forefront of the national conversation about education
reform.
In January 2010, the Tennessee General Assembly enacted the
Complete College Tennessee Act (CCTA). The CCTA is arguably the boldest
attempt by any State in the country to focus the energies and resources
of its public higher education enterprise on meeting the State's
development needs. Together with the First to the Top and Race to the
Top initiatives, Tennessee has enacted a range of measures designed to
spur improvement in Tennessee's education pipeline--specifically,
improving student performance and graduation rates at both the high
school and college levels. The central idea of the CCTA, advanced by
the prior administration and readily embraced by Tennessee Governor
Bill Haslam, is that in order for Tennessee to thrive in the global
economy, the education and skill levels of Tennesseans must improve
significantly. Implicit within the CCTA is the acknowledgement that the
higher education funding structure must support the State's new
priorities.
If successfully implemented, the CCTA will prove to be the most
transformative and visionary legislation affecting Tennessee's public
higher education systems in recent times. History has proven that a
more educated citizenry results in a society with faster economic
growth and a more stable democracy. Today, more than ever, we need a
renewed focus on higher education.
Options available to students abound with the growth of proprietary
schools. Unfortunately, while the for-profit institutions are growing,
the public institutions that fueled the growth of college credentials
after World War II have suffered through years, sometimes decades, of
State-level funding cuts. Many are no longer State-funded, but State-
supported. Total State support for higher education nationally fell by
7.6 percent from the 2011-12 fiscal years, according to a report from
Illinois State University and the State Higher Education Executive
Officers. The report also indicates a reduction in the per-student
spending by States--to reach the lowest point in some 25 years.
(Chronicle of Higher Education, ``State Support for Colleges Falls 7.6
percent in 2012 Fiscal Year,'' 2012.)
In Tennessee alone, State funding for public colleges, universities
and technology centers decreased by almost 30 percent for the Tennessee
Board of Regents (TBR) universities since 2008, shifting more of the
funding burden to students. At all 46 institutions, including community
colleges and technology centers, funding has been cut an average of 24
percent. As State support for higher education has declined and,
despite improved efficiencies, the share of the cost paid by students
has increased--thus, so has the price. Tennessee students now cover
about 67 percent of the cost of their education at public universities,
and some 60 percent at community colleges. The implication of this
trend, if it continues, will be detrimental for all Tennesseans.
This is the reality of today's economy and today's funding climate,
and therefore the new ``fiscal reality'' of the operating environment
for Tennessee's public higher education. In the past several years in
the TBR alone, we have opened the door to access for more students.
Enrollment in our six comprehensive universities and 13 community
colleges has grown 26.4 percent from 2001 to 2011.
To meet the demands of serving more students with fewer resources,
greater operating costs, changing technologies and greater
expectations, Tennessee's institutions look dramatically different than
in years past. Within the last 2 years alone, our universities have
eliminated, among others, degree programs in foreign languages,
English, music education, Africana studies, women and gender studies,
human sciences, aerospace education, and industrial engineering, and
they have terminated dozens of concentrations or certificates to
address decreased funds and changing demands. While student fees have
increased at the institutions, growth in enrollment, declining State
funding, and cost inflation have combined to produce real reduction in
funds available to the institutions to pay for educational services. At
the TBR, we have become more efficient and effective in delivering our
services. In fact, on average, the total revenue per student (before
inflation) at our universities in 2011 was 4 percent less than in 2008.
During the same period, the impact at our community colleges was even
greater, averaging almost 9 percent less per student. In other words,
students are covering more of the financial burden for their education
at public colleges and universities in Tennessee than ever before, even
as our institutions are becoming more efficient.
Yet, as resources have diminished, expectations for the outcomes of
our system and the institutions have grown. The result of the
convergence of these circumstances is to require every decision about
resource allocation at every level to be viewed through the lens of its
impact on outcomes. Every day, at every TBR institution, including the
central office, the focus is on deploying resources in a way that will
make a real difference and lead to real results.
We are on the right track. With the right resources and the right
conversations--like the one we're having today--Tennessee can lead the
way in workforce development and economic growth.
Tennessee's Governor has set a clear goal to increase the number of
postsecondary degrees awarded annually by 26,000 by 2015. Today that
goal is more important than ever. Unless Tennessee can make progress
toward achieving a more educated population, the skilled and high-wage
jobs we need for our economy to grow will likely move to, or more
likely be created in, other places that have the best prepared
workforce.
In order to meet this challenge, the CCTA included several
important elements aimed at transforming our public higher education
system into a more efficient, effective and outcome-oriented
enterprise. Many of these elements have direct impact on college
affordability by improving operating efficiencies, reducing time to
degree and focusing resources on strategies that lead to greater
success.
For example, the University of Tennessee and TBR systems have
together developed and implemented the Tennessee Transfer Pathways, a
transfer policy that ensures community college students can readily
transfer credits in defined programs to public universities. The TBR
has evolved our community colleges into a comprehensive system, thereby
enhancing the statewide role that community colleges can play in
providing postsecondary education for recent high school graduates and
adults. The new system for Tennessee's Community Colleges will, over
time, result in significant cost efficiencies as well as educational
programming that is more effective and responsive to economic and
workforce needs. TBR's public universities have a more defined focus on
institutional mission to help avoid future unnecessary program
duplication.
But perhaps most importantly, the CCTA called for the creation of a
formula to allocate available State funding to public higher education
based on outcomes like increasing the numbers of degrees, diplomas and
certificates awarded. The Tennessee Higher Education Commission has
developed a Public Agenda for Higher Education centered on improving
student outcomes and created changes to support its implementation--
most notably developing the new outcomes-based funding formula. Funding
for public higher education is now heavily weighted toward student
success measures like these.
Attachment A lists the outcomes that are incorporated in the
outcomes based formula for our universities and community colleges. As
can be seen, the outcomes for both groups of institutions are heavily
influenced by student progress and success. The outcomes are the same
for all of the State's universities, however the weights assigned to
each outcome for each university can vary based on the mission of the
institution. For example, the weight assigned to the research outcome
for the University of Tennessee at Knoxville is 15 percent while
research is only weighted at 10 percent for Austin Peay State
University. Similarly, as the example shows, outcomes are weighted
differently among the community colleges.
The outcomes-based formula has created the most tangible and
strongest incentive for our institutions to focus on strategies that
contribute to student success and to align financial resources to fund
those strategies.
As a result, virtually every activity taking place at the TBR
central office and at each of its institutions is centered on improving
the outcomes that have been identified by the THEC Public Agenda and
the CCTA. It is no longer sufficient for the Board of Regents to view
its responsibility as one of policy management and the safe guarding of
assets. On the contrary, ultimately, the Board is responsible for the
system's success in achieving the goals of the Public Agenda.
The CCTA and the Public Agenda establish clear linkages between the
economic development needs of the State and the legitimate aspirations
of the State's public higher education systems. In short, the Public
Agenda declares that by 2025, the State's workforce must have levels of
educational attainment at least equal to the national average. The
Public Agenda assigns expectations for contributions to this goal from
the TBR, UT and the private/proprietary higher sector.
For TBR to meet its current expectation, the system as a whole will
need to produce 43,202 credentials in 2025. This represents an almost
60 percent increase in annual awards over our 2010 baseline. To achieve
this goal, the system must increase its outcomes by roughly 3 percent
per year, particularly challenging in light of demographic trends that
reflect a changing population with an increased number of the types of
learners who face the greatest challenges.
More low-income students will be entering our schools.
From 2007-11 median annual household income declined by 9.8 percent
nationwide. Hispanic and white households saw a 4.9 percent and 4.7
percent decrease, respectively, while Black household median annual
income decreased 9.4 percent (Sentier Research, ``Household Income
Trends During the Recession and Economic Recovery,'' 2011.).
Demographic projections predict major growth in
underrepresented minority groups. Nationwide, it is projected that the
Latino and Black populations will grow by 137 percent and 15 percent,
respectively, between 2010 and 2050 while the White population will
decrease by 9 percent (National Population Projections, U.S. Census
Bureau. Released 2008; NCHEMS, Adding It Up, 2007).
White individuals (aged 25-29) attain bachelor degrees at
twice the rate of black individuals and three times the rate of
Hispanics (39 percent vs. 20 percent and 13 percent, respectively), and
young people from the highest income quartile earn bachelor's degrees
at seven times the rate of children from the lowest income quartile (79
percent vs. 11 percent by age 24). (Sources: NCES, Condition of
Education, 2010 and U.S. Census Bureau, Educational Attainment in the
United States: 2011; PostSecondary Education Opportunity, ``Bachelor's
Degree Attainment by Age 24 by Family Income Quartiles, 1970 to
2010.'')
Simply put, for TBR and its constituent institutions to be
successful in meeting their goals, every institution must be more
successful with students who have historically been least successful
reaching their education goals, particularly low-
income first generation students, adult learners and under-represented
minorities.
Helping these students will require more hands-on, high-touch and
high-tech efforts, all of which also translate to high cost. Tomorrow's
successful students will require more direct and personal attention--
advising, counseling and directing them toward the successful
completion of their goals.
TBR institutions are learning from success stories within the
system. The Tennessee Technology Centers, for example, have always
served these underrepresented demographic populations to a larger
extent. Yet the Technology Centers have demonstrated dramatic success
in helping students complete their academic programs through a variety
of techniques that are now being piloted at other programs around the
country:
1. Most students enroll in defined cohort-based programs with
strong structures and limited options. Students register for programs,
not courses. Class schedules are pre-determined and set daily so
students can plan outside work and life commitments around a set daily
time commitment. Students don't have to pick and choose which classes
they take and when, so they only take the courses they need. As a
result, more finish and finish faster.
2. Students are provided a cost list including books and supplies,
so they aren't surprised with unexpected expenses.
3. More than 80 percent of the Tennessee Technology Center students
are eligible for State or Federal grants, or both, which covers the
cost of their education and often provides additional money for living
expenses. The TTCs don't participate in the loan program, and the
students graduate debt free.
Similar cohort programs are being tested at Tennessee's community
colleges and may be considered for public universities as well.
And as important as increasing the numbers of students with
credentials is ensuring quality. Academic standards, integrity and
quality must continue or be enhanced. It's quality of the workforce
that will drive the economy, not just the number of people with
degrees. Implicit in Public Agenda's attainment goal is the need for
the credentials to be a result of high quality instruction and relevant
to the needs of Tennessee's 2025 economy.
In some ways, having a clearly established, albeit aggressive, goal
is liberating. The system and its institutions are able now to pay
attention to efforts that matter. Priorities are realigned. For the TBR
system office, this means that the focus now is on empowering staff to
engage in activities that will promote outcomes. The result is an
evolving redefinition of the relationship between system and
institution. The system interest is less about regulating and more
about helping each institution meet its goal of increasing relevant,
high quality, outcomes.
Among the changes implemented so far, the TBR has:
Established progress toward completion goals and improved
outcomes under the new funding formula as the basis upon which
performance of university and college presidents will be assessed.
Joined with 10 other higher education systems and multi-
campus institutions as members of the Education Delivery Institute, a
joint effort of The Education Trust and Achieve, Inc. designed to
assist in the successful implementation of higher education reform
agendas.
Created within TBR the Completion Delivery Unit, a small
group focused on assisting TBR system operating units and institutions
with the development of their ``completion plans,'' identifying
strategies to be pursued, establishing expectations of results for each
strategy and providing a framework for the campuses and the system to
monitor progress in meeting delivery goals in near ``real-time.''
Through a partnership developed with the Tennessee
Business Roundtable, Complete College America, Tennessee Higher
Education Commission and the University of Tennessee, enabled 16 TBR
institutions and two UT institutions to voluntarily participate first
in the Nation State-level College Completion Academies, a convening of
teams from the institutions, national experts and facilitators designed
to engage institutions in the development of completion plans
incorporating best practices. Governor Haslam addressed the first
academy and facilitated a session in the second academy.
Embarked upon the development of a central data repository
and data warehouse that will put real-time information in the hands of
managers throughout the system with which they can make decisions and
evaluate performance. This has been identified as an essential pre-
requisite to system and institutional success.
Began system-wide, institutional participation in the
Access To Success (A2S) initiative. A2S is a joint effort of the
National Association of System Heads and the Education Trust that works
with 22 public higher education systems that have pledged to cut the
college-going and graduation gaps for low-income and minority students
in half by 2015. TBR has been part of this initiative since 2007 but
has not, until recently, engaged institutions in the initiative. The
goals of A2S align well with the needs of the TBR system to address
future challenges as demographic characteristics of our populations
change.
In collaboration with THEC and UT, developed 49 universal
transfer pathways in 29 academic disciplines providing our community
college students with clear and certain transfer opportunities to
public (and many private) 4-year intuitions.
With assistance from Lumina Foundation grant funding,
engaged in a series of pilot programs designed to expand the use of
cohort programs and block schedules in community colleges as
contemplated by the CCTA. Early indications are that where feasible,
utilizing cohorts and block schedules will result in significant
improvements in retention and completion. Expansion of this effort into
the 4-year environment may be warranted.
Established the Office of Community Colleges and named a
vice-chancellor for Community Colleges to manage the process of
evolving the community colleges into a comprehensive community college
system. Also, with the help of a Gates Foundation grant, TBR conducted
a ``business process analysis'' designed to identify opportunities for
process standardization across the community college system using best
practices. As this effort continues, it is expected to result in
significant efficiencies and will help position the community college
system as the primary source for significant increases in enrollment
and affordability in public higher education in Tennessee.
Developed programs that will drive more students into the
lower-cost options available at the community colleges first, then
encourage the continuation of educational achievement by making defined
program course transfers seamless from community colleges to
universities.
Encouraged the creation of innovative programs to help
with student success. For example, Austin Peay State University
developed the Degree Compass software and application that uses
technology to successfully pair current students with the courses that
best fit their talents and program of study for upcoming semesters.
Using predictive analytics, the system recommends a course which is
necessary for a student to graduate, core to the university curriculum
and their major, and in which the student is expected to succeed
academically. Recently, the system gained national attention and played
a central role in Tennessee's successful Completion Innovation
Challenge application, which received a $1,000,000 award from Complete
College America and the Gates Foundation to support implementing Degree
Compass at three other campuses in Tennessee.
The passage of the CCTA creates an environment wherein
effectiveness, efficiency and sustainability of high quality results
are essential if the TBR and its institutions are to thrive. The
outcomes-based formula creates an absolute incentive to pursue only
those activities that are believed to produce results. Constant
evaluation of performance in real-time and a willingness to abandon, or
modify, strategies that aren't working is becoming the ``normal course
of business'' for Tennessee's institutions.
The outcomes-based formula introduces an entirely new dynamic in
terms of transparency. How well each institution is performing will be
readily apparent as a result of THEC's funding allocation
recommendations each year. Historically, accountability within the
higher education environment has been elusive. This is no longer the
case in Tennessee.
The historical need for the TBR and THEC to monitor and encourage
elimination of low-producing programs has been eliminated. There is no
incentive to continue to allocate resources to a low-producing program
or a non-productive service unless there is a very real indirect
benefit to the institution as a whole and a return on investment that
justifies the expense.
In this environment, the role of the system office is one of
helping institutions in creating and utilizing systems and frameworks
for continuing evaluation and in helping identify interventions that
might help improve the outcomes of any given strategy. The system
office also has an interest in making sure that institutions don't
engage activities such as unnecessary duplication of programs that will
result in inefficient use of resources on a system-wide basis.
Implicit in the CCTA and the outcome formula approach is that if
colleges and universities can improve their results, funding will
follow. But there is no guarantee that will hold true.
The result of today's new fiscal reality is that higher education
will continue to be in a difficult funding environment. Although
understandable in context, the system's historical practice of relying
on tuition and fee increases to meet institutional spending needs is
unlikely to be sustainable.
It appears that Tennessee, like other States, has reached a point
at which tuition increases that exceed general inflation rates will be
counter-productive to achieving completion goals as a system. The
potential political response to further significant fee increases is
concerning as well. Current political and economic environments make it
more likely that government-imposed limitations (whether at the State
or Federal level) may be seriously considered. While there is a
legitimate government oversight role in the management of the public
higher education systems, statutory solutions to complex and multi-
dimensional financial issues--just some of which are mentioned here--
are not likely to give full recognition to the unintended consequences
that uniformly applied policies will hold for individual institutions.
Suggestions For How The Federal Government Can Encourage And Support
States In Efforts To Increase Education Attainment While Ensuring
Affordability
1. More need-based funding available to students at both the State
and Federal level is needed. Aid allocations reflect that scholarship
and grant aid is gradually shifting from fewer need-based awards to
more merit-based awards. In Tennessee, approximately $90 million is
awarded from lottery scholarships to students from households whose
expected family contributions exceed full cost of attendance. A similar
amount would cover the gap to fully fund assistance for eligible need-
based students. As the number of students who need financial support
grows, we see a shift to more funding going to students whose families
have demonstrated the ability to pay, and a growing number of students
whose families do not have the means to pay cannot afford to enroll
without expensive student loans.
2. Federal incentives for States to keep their funding for public
higher education stable or increasing is needed. The Federal
requirement of State maintenance of effort funding for American
Recovery and Reinvestment Act dollars provided a real benefit to
colleges and universities. Ever-shrinking State funding levels threaten
to reduce the amount of money available in the funding formula,
creating an environment where institutions are competing in a zero-sum
game for a piece of an ever-shrinking funding pie instead of striving
for growing funding incentives.
3. Federal financial aid policies need to more closely align with
best educational practices at the States levels. Military veterans who
require learning support are often blocked from receiving funding for
the types of support and techniques that have proven more effective
than traditional classroom-based developmental courses because they are
considered ``independent study programs.'' Individual study
incorporated into a for-credit class that is supplemented by technology
support taught in laboratories with instructors should qualify for
Veterans Administration support, but it currently does not. Regular
financial aid policies structured solely around traditional semesters
and terms don't conform well for alternative scheduling that successful
cohort-based programs sometimes require--allowing students to start and
stop at different intervals. Those ``non-standard terms'' result in aid
award difficulties.
4. Federal recognition that increasing prices and tuition rates
greater than the rate of inflation are the result of decreasing State
funding allocations is needed. Statutory solutions to complex and
multi-dimensional financial issues--just some of which are mentioned
here--are not likely to give full recognition to the unintended
consequences that uniformly applied policies will hold for individual
institutions.
Attachment A
Formula Outcomes and Example Weights Based on Institutional Mission
------------------------------------------------------------------------
Universities APSU UTK
------------------------------------------------------------------------
Research
Masters university/
Carnegie classification medium very high
(percent) activity
(percent)
------------------------------------------------------------------------
Students Accumulating 24 hrs.................... 3.0 2.0
Students Accumulating 48 hrs.................... 5.0 3.0
Students Accumulating 72 hrs.................... 7.0 5.0
Bachelors and Associates........................ 25.0 15.0
Masters/Ed Specialist Degrees................... 20.0 15.0
Doctoral/Law Degrees............................ 0.0 10.0
Research and Service............................ 10.0 15.0
Transfers Out with 12 hrs (good academic 10.0 5.0
standing)......................................
Degrees per 100 FTE............................. 10.0 10.0
Six-Year Graduation Rate........................ 10.0 20.0
-----------------------
Total......................................... 100.0 100.0
------------------------------------------------------------------------
------------------------------------------------------------------------
Community colleges Dyersburg Nashville Average
------------------------------------------------------------------------
Associates/ Associates/
rural urban multi-
Carnegie classification medium campus
(percent) (percent)
------------------------------------------------------------------------
Students Accumulating 12 hrs..... 6.0 4.0 5.0
Students Accumulating 24 hrs..... 7.0 5.0 6.0
Students Accumulating 36 hrs..... 7.0 6.0 6.0
Dual Enrollment.................. 5.0 5.0 7.0
Associates....................... 10.0 20.0 15.0
Certificates..................... 10.0 20.0 13.0
Job Placements................... 10.0 10.0 9.0
Remedial & Developmental Success. 20.0 10.0 12.0
Transfers Out with 12 hrs (good 15.0 10.0 13.0
academic standing)..............
Workforce Training (Contract 5.0 5.0 6.0
Hours)..........................
Awards per 100 FTE............... 5.0 5.0 8.0
--------------------------------------
Total.......................... 100.0 100.0 100.0
------------------------------------------------------------------------
The Chairman. Thank you very much, Mr. Morgan.
Now we turn to Dr. Preus.
STATEMENT OF CAMILLE PREUS, Ph.D., COMMISSIONER, OREGON
DEPARTMENT OF COMMUNITY COLLEGES AND WORKFORCE DEVELOPMENT,
SALEM, OR
Ms. Preus. Good morning and thank you for the invitation,
Mr. Chairman, Ranking Member Enzi, and distinguished members of
the committee. For the record, my name is Camille Preus. I am
the director of the Department of Community Colleges and
Workforce Development for the State of Oregon.
Never has education been more important to the lives and
fortunes of Americans, Oregonians, or our local communities.
Yet, in Oregon, we are falling behind. Our current generation
of young adults, those 25 to 34, are less educated than their
parents' generation, and few are earning certificates,
credentials, and degrees beyond high school.
Each year, well-paid jobs requiring only a high school
diploma are replaced by new jobs that increasingly require
postsecondary preparation. Over the next decade, in Oregon, 61
percent of all jobs will require technical certificates,
associate degrees, or higher levels of education. Making
postsecondary education accessible and affordable to increase
the skills of Oregonians and Americans is an imperative.
I'd like to set a little Oregon context, if I might. There
are encouraging signs of progress in our State. We marshaled
some strong bipartisan support in the 2011 session to address
these challenges and opportunities head on. Oregon established,
I believe, the most aggressive high school and college
completion goals in the country. They are, by 2025: 40 percent
of our population would have a bachelor's degree; 40 percent of
our population would have an associate's or professional
credential; and that the remaining 20 percent would have earned
a high school diploma or its equivalent. We refer to these
targets as the 40/40/20 goal.
Oregon also set a most ambitious education reform agenda.
We want to create a coordinated education system, we want to
focus State investment on outcomes, and we want to build
statewide support systems. The unified student-centered system
of public education from preschool through graduate school,
what we call P-20, connects the educational sectors to achieve
the State's educational outcomes. When I refer to P-20, I'm
referring to education for children from birth through their
education career, including early learning, K-12, community
colleges, undergraduate, and graduate programs.
One key investment area within the P-20 system is
postsecondary access and affordability. To reach our 40/40/20
goal of educational attainment, the State must be strategic in
generating a college-going culture across the education
continuum and in making and honoring the promise that
postsecondary education will be within reach of all learners
who achieve a high school diploma.
In Oregon, we have the Shared Responsibility Model. It's a
four-step approach to affordability. The model involves four
steps that enable all students to cover the cost of college
attendance. The model assumes that the student, as the primary
benefactor of the education, bears the first and most
significant responsibility for paying for college. So step one
is the student share. A defined student contribution spells out
the amount every student would contribute to his or her
education. It's based on their decision to attend a community
college, a 4-year public or private university in Oregon.
The family share for both dependent and independent
students is determined by an established financial need-based
formula of incomes and assets, family structure, and attendance
patterns. Families with greater resources are expected to cover
the remaining cost. Middle-income families are expected to
contribute some. Families with very low or no resources are
expected to contribute much less or nothing.
The Federal share--the same need formula determines how
much aid, if any, the Federal Government will provide or
replace some or all of the family contribution. As the final
partner, the State assists only when there is a remaining need
not covered by the other partners. These grants--in Oregon
called the Oregon Opportunity Grant--support the student's
choice by reflecting a differential cost of public 2-year and
4-year colleges and public universities. If a student chooses
an eligible 4-year independent college or university, they
receive assistance as well, but not any more than they would if
they went to a public university.
The implementation of the Shared Responsibility Model in
Oregon has increased State investment in need-based aid. It has
also increased the number of students eligible for receiving
State financial aid, which has nearly doubled, and enrollment
continues to increase.
In closing, Oregon's educational attainment goal of 40/40/
20 is more than just a series of numbers. It represents an
aspirational goal for degrees and certificates. It also
represents a commitment to increasing the socio-economic
benefits for all of our citizens. Connecting student learning
along the P-20 education continuum is an important step in
increasing the number of students who successfully complete
high school and enter college. But, equally important, it is a
promise of college as accessible and affordable.
Thank you very much.
[The prepared statement of Ms. Preus follows:]
Prepared Statement of Camille Preus, Ph.D.
summary
Never has education been more important to the lives and fortunes
of America, Oregonians and our communities. Yet, In Oregon, we are
falling behind. Our current generation of your adults--ages 25-34 is
less educated than their parents' generation, with fewer earning a
certificate or degree beyond high school. Each year, well-paid jobs
requiring only a high school diploma are replaced with new jobs that
increasingly demand postsecondary education, technology skills and
advanced training beyond high school. Over the next decade 61 percent
of all Oregon jobs will require a technical certificate, associate's
degree or higher level of education.
The Oregon Context. There are encouraging signs of progress across
Oregon. Marshaling strong bipartisan majorities in 2011, the Oregon
Legislature addressed these challenges and opportunities head on.
Oregon established the most aggressive high school and college
completion goals of any State in the country; by 2025, we must ensure
that 40 percent of adult Oregonians have earned a bachelor's degree or
higher, that 40 percent have earned an associate's degree or
postsecondary credential, and that the remaining 20 percent have earned
a high school diploma or its equivalent. We refer to these targets as
our ``40/40/20'' goal.
Oregon set a most ambitious education reform agenda:
Create a coordinated public education system.
Focus State investment on achieving student outcomes.
Build statewide support systems.
The unified, student-centered system of public education from pre-
school through graduate school (P-20) connected the educational sectors
to achieve the State's educational outcomes. (The ``P-20'' term refers
to the education of children from birth through their education career
including early learning programs, the K-12 system, community colleges,
and the undergraduate and graduate programs of universities.)
One key investment area within the P-20 system is postsecondary
access and affordability. To reach our 40/40/20 educational attainment
goal the State must be strategic in generating college-going culture
across the education continuum, and in making and honoring, a promise
that postsecondary education will be within reach for all learners who
achieve a high-school diploma.
A Four-Step Approach to Affordability. The shared responsibility
model of the Oregon Opportunity Grant involves four steps that enable
all students to cover the cost of college attendance. The model assumes
that the student, as the primary beneficiary of the education, bears
the first and most significant responsibility for paying for college.
step 1: student share
The defined student contribution spells out the amount every
student would contribute to his or her education, based on the decision
to attend a community college, a 4-year public or private college or
university in Oregon.
step 2: family share
The family share for both dependent and independent students is
determined by an established financial need formula based on incomes
and assets, family structure and attendance patterns. Families with
greater resources are expected to cover the remaining costs, middle-
income families are expected to contribute some of the remaining costs,
and families with very low to no resources are expected to contribute
much less, or nothing.
step 3: federal share
The same need formula determines how much aid, if any, the Federal
Government will provide to replace some or all of the family
contribution. Students whose families earn less than $40,000 in pre-tax
income and assets are eligible for a Pell grant (up to $5,550
currently). Middle-income families with Federal tax liability are often
eligible for one of the Federal education tax credits for tuition paid
the prior tax year.
step 4: state share
As the final partner, the State assists only when there is a
remaining need not covered by the other partners. These grants (Oregon
Opportunity Grants) support student choice by reflecting the
differential costs of public 2-year and 4-year colleges and public
universities. Students who choose eligible 4-year independent colleges
and universities receive assistance as well--but no more than their
public counterparts.
The implementation of the Shared Responsibility Model has increased
State investment in need-based aid. The number of student's eligible
and receiving State financial aid has nearly doubled and enrollment has
increased across all post
secondary sectors.
Oregon's educational attainment goal of 40/40/20 is more than a
series of numbers--it represents an aspirational goal for degrees and
certificates but it also represents a commitment to increasing the
socio-economic benefits to all citizens. Connecting student learning
along the P-20 education continuum is an important step in increasing
the number of students who successfully complete high school and enter
college but equally important is the promise of college as accessible
and affordable, as with Oregon's Shared Responsibility Model.
______
Good Morning, Mr. Chairman and other distinguished members of the
committee. My name is Camille Preus, I am the commissioner of the
Oregon Department of Community Colleges and Workforce Development.
Today however, I am here representing the State of Oregon and all of
our 24 public postsecondary institutions. We appreciate the invitation
to join the committee as you focus on successful policies, initiatives
and strategies, designed and implemented at the State level, to improve
college affordability.
I believe one such successful policy is Oregon's need-based
financial aid program known as the Shared Responsibility Model. Before
I discuss the Shared Responsibility Model policy it is important to
explain the context.
Never has education been more important to the lives and fortunes
of America, Oregonians and our communities. Yet, in Oregon, we are
falling behind. Our current generation, of young adults (ages 25-34),
is less educated than their parents' generation and fewer of them are
earning a certificate or degree beyond high school.
Each year, well-paid jobs requiring only a high school diploma are
replaced with new jobs that demand postsecondary education, technology
skills and advanced training beyond high school. Over the next decade
61 percent of all Oregon jobs will require a technical certificate,
associate's degree or higher level of education. This proportion of
high skill jobs will only accelerate by 2025. Today, Oregonians with an
associate's degree earn at least $5,000 more per year than those with
only a high school diploma. Those with a bachelor's degree earn
approximately $17,000 more per year. Eighty-nine percent of family wage
jobs, paying more than $18.00 per hour, will require a technical
certificate/associates degree or higher level of education.
Employment rates also highlight the need for higher education; the
national unemployment rate for adults with a college degree is 4.4
percent--half the 8.8 percent unemployment rate for those with only a
high school diploma and one-third of the 13.2 percent unemployment rate
for high school dropouts.
Education however, is not just about improving personal income and
job security. Higher levels of education are associated with better
health, longer lives, greater family stability, less need for social
services, lower likelihood of involvement with the criminal justice
system, and increased civic participation. All are benefits not only to
the educated individuals and their families, but also to healthy,
thriving communities.
The Oregon Context. There are encouraging signs of progress across
Oregon. At every level of education in Oregon, leaders, faculty and
teachers are pioneering new practices that enable students to achieve
their potential as lifelong learners and contributors to our economic
and civic life.
In 2011 the Oregon Legislature addressed these challenges and
opportunities head on, marshaling strong bipartisan majorities to
enact:
Senate bill 253 which established the most aggressive high
school and college completion goals of any State in the country; and,
Senate bill 909 which called for the creation of a
unified, student-centered system of public education from pre-school
through graduate school (P-20) to achieve the State's educational
outcomes.
Senate bill 253 defines our goal: by 2025, we must ensure that 40
percent of adult Oregonians have earned a bachelor's degree or higher,
that 40 percent have earned an associate's degree or postsecondary
credential, and that the remaining 20 percent have earned a high school
diploma or its equivalent. We refer to these targets as our ``40/40/
20'' goal.
Senate bill 909 created the Oregon Education Investment Board
(OEIB) and charged it with the responsibility, across P-20, to ensure
that all public school students in the State reach the established
educational outcomes. The ``P-20'' term refers to the education of
children from birth through their education career including childcare
and early learning programs, the K-12 system, community colleges, and
the undergraduate and graduate programs of universities.
There are three key strategies in the initial OEIB plan to reach
the 40/40/20 goal:
Create a coordinated public education system, from
preschool through college and career readiness to enable all Oregonian
students to learn at their best pace and achieve their full potential.
At the State level, this will require better integration of our
capacities and smarter use of our resources to encourage and support
successful teaching and learning across the education continuum.
Focus State investment on achieving student outcomes.
Oregon defines the core educational outcomes that matter for students,
their families and our State:
All Oregon children enter kindergarten ready for
school.
All Oregonians move along the learning pathway at
their best pace to success.
All Oregonians graduate from high school and are
college- and career-ready.
All Oregonians who pursue education beyond high
school complete their chosen programs of study, certificates,
or degrees and are ready to contribute to Oregon's economy.
Build statewide support systems. It is not the State's
role to deliver education, but rather to invest in and support the
institutions and providers across the State that do. To succeed, the
State must engage educators and leaders, students and families,
communities and employers to achieve the educational excellence
envisioned for Oregon students. The State will continue to set
standards, provide guidance, conduct assessments and coordinate support
and resources to its public educational pathways.
The three strategies are overlapping, driven by student learning
outcomes and aimed at transforming the State's approach to education.
Under the leadership of Governor Kitzhaber, the State is also
transforming its approach to the budget, leveraging investment in
innovations and rewarding success.
A key investment area is postsecondary access and affordability. To
reach our 40/40/20 educational attainment goal the State must be
strategic in generating a college-going culture across the education
continuum, and in making and honoring a promise that postsecondary
education will be within reach for all learners who achieve a high-
school diploma.
the shared responsibility model
The average tuition and fees to attend a State university in Oregon
today, represents 11.3 percent of median family income in the State, a
doubling of the percentage paid 30 years ago when many of today's
leaders went to college. In the last few years, the State-student share
of college costs shifted from the State covering 51 percent in 2001 to
covering only 31 percent in 2010, with students picking up the balance
through higher tuition. As a result, Oregon students from low- and
middle-income families are borrowing more, working more, taking a
longer path to graduation, or simply giving up on college altogether.
Oregon realized it could not afford to put college education beyond
the reach of so many Oregonians, when as stated earlier, more jobs in
our economy require postsecondary training or a degree. In 2007 the
Oregon Legislature passed, with wide bipartisan support, Senate bill
334 enacting the Shared Responsibility Model for the Oregon Opportunity
Act. This bill restructured the need-based Oregon Opportunity Grant
into a shared responsibility and partnership among students, their
families, the Federal Government and the State to meet college costs
and increase educational attainment statewide.
Addressing the Public Interest. Oregonians recognize the benefits
of postsecondary education. Students develop better skills, job
prospects and earning potential, while the State benefits from a more
productive and diverse workforce, better-paying jobs, and higher
income, tax-paying citizens. Oregonians believe that even if students
have no family resources to pursue postsecondary education, they should
at least be able to work their way through college.
But today, working one's way through college is no longer an option
for most students. In 1965, an Oregon student could work approximately
half-time at a minimum wage job year-round and pay for a year at a
public university. A current student attending a community college
would have to work 36 hours a week, 44 hours a week for a student
attending a public 4-year university or 90-hours a week for a student
attending an independent university, year round to do the same.
A Four-Step Approach to Affordability. The shared responsibility
model of the Oregon Opportunity Grant involves four steps that enable
all students to cover the cost of college attendance. The model assumes
that the student, as the primary beneficiary of the education, bears
the first and most significant responsibility for paying for college.
The contributions of other partners--family/household, Federal
Government, and the State are based on the resources it takes to close
the ``affordability gap'' for each student.
step 1: student share
The defined student contribution spells out the amount every
student would contribute to his or her education, based on the decision
to attend a community college, a 4-year public or private college or
university in Oregon: $5,700 per year for a community college student;
and $8,700 per year for a 4-year college/university student (public or
private).
Each student would decide the best personal strategy by combining
one or more of several options to cover their share of postsecondary
costs: working, borrowing (student loans), savings, private
scholarships, Federal work-study, institutional grants, etc. For
example, working at a minimum wage job during the summer and part-time
during the school year would cover $5,700 of the community college
contribution or a smaller percentage of the 4-year contribution
($8,700).
step 2: family share
The family share, for both dependent and independent students, is
determined by an established financial need formula based on incomes
and assets, family structure and attendance patterns. Families with
greater resources are expected to cover the remaining costs, middle-
income families are expected to contribute some of the remaining costs,
and families with very low to no resources are expected to contribute
much less, or nothing.
step 3: federal share
The same need formula determines how much aid, if any, the Federal
Government will provide to replace some or all of the family
contribution. Students whose families earn less than $40,000 in pre-tax
income and assets are often eligible for a Pell grant (up to $5,550
currently). Middle-income families with Federal tax liability are often
eligible for one of the Federal education tax credits for tuition paid
the prior tax year.
step 4: state share
As the final partner, the State assists only when there is a
remaining need not covered by the other partners. These grants (Oregon
Opportunity Grants) support student choice by reflecting the
differential costs of public 2-year and 4-year colleges and public
universities. Students who choose eligible 4-year independent colleges
and universities receive assistance, but no more than their public
counterparts.
more aid = more access
Beginning in 2008 the State doubled the annual State commitment to
the Oregon Opportunity Grant from $34 million in the fall of 2007 to
$72 million in the fall of 2008. The average award amount in 2008 was
$2,600 for a community college student, nearly double the $1,398 from
2007. Today the Opportunity Grant is funded at just under $100 million
with awards to more than 56,000 students.
The gap between the cost of attendance and resources to pay for
college has also dropped for a full-need student since the
implementation of the Shared Responsibility Model. The need gap for a
community college student has decreased by half and for a student
choosing a 4-year public institution the gap has been reduced from
$8,874 (2004-5) to $3,776 today.
The Shared Responsibility Model design also helped middle-income
families afford college--up to $70,000 for a family of four, previously
capped at $31,000. College savings plans do not reduce the grant award.
Another key aspect of the Shared Responsibility Model is statewide
outreach. Leveraging the Federal College Access Challenge Grant,
secondary and post
secondary partners launched an aggressive ``get-the-word-out'' campaign
that included advertising on TV and radio, mailings and posters
targeted to student, parents and counselors and community outreach
visits statewide sponsored and supported by cross-sector education
groups. This resulted in an increase of eligible applicants from 41,800
in 2007 to 74,694 in 2008 and 155,103 estimated for 2011-12.
how can the federal government encourage and support states
in affordability?
There are a number of ways in which the Federal Government can help
States provide education at a lower cost. First, it should be noted
that the maintenance of effort (MOE) requirements included in the
American Recovery and Reinvestment Act (ARRA) concerning expenditures
for public higher education did in fact serve to sustain funding at a
time of tremendous fiscal duress. This had a direct impact in
maintaining educational services and in limiting community college
tuitions. Although the Federal Government is no longer supplementing
State education budgets, other means of exerting similar leverage
should be explored.
In addition, the Federal Government should consider regulating
public institutions of higher education differently from other sectors
of higher education, particularly for-profit institutions. The reason
for this is obvious--public institutions are funded and regulated in a
fashion that is fundamentally different, and infinitely more exacting,
than what's generally provided for-profit colleges. Community colleges
are accountable to taxpayers and the broader public; for-profit
colleges are accountable to their owners, usually shareholders. As a
result, community colleges have been subjected to a regulatory
apparatus that is entirely inappropriate to their nature.
The Federal Government also could help States in their efforts to
be more efficient by aligning the various reporting requirements that
it imposes on institutions of higher education. These requirements
differ for various programs, such as the HEA and the Workforce
Investment and the Carl D. Perkins Act, and these in turn differ from
information that States themselves require. A concerted effort needs to
be undertaken to eliminate these inefficiencies. Many community
colleges have only one individual who is responsible for meeting all
reporting requirements. Sometimes States becoming directly involved in
providing needed information. In addition, the Federal Government needs
to be much more aggressive in ensuring that appropriate State
educational entities have access to data that will enable them, in
concert with institutions, to identify the earnings of students after
they have left institutions. These data in turn will help colleges to
maximize resource allocation.
Many States are leading efforts to overhaul remedial education,
often through modular courses. Unfortunately, this new approach has led
to complications in the area of return of Title IV funds and standards
of satisfactory academic progress. We urge the committee to place
special attention on all the positive changes taking place in this
area, which could well lead to much higher success rates for our
students.
conclusion
Oregon's educational attainment goal of 40/40/20 is more than a
series of numbers--it represents an aspirational goal for degrees and
certificates but it also represents a commitment to increasing the
socio-economic benefits to all citizens. Connecting student learning
along the P-20 education continuum is an important step in increasing
the number of students who successfully complete high school and enter
college but equally important is the promise that college is accessible
and affordable, as in Oregon's Shared Responsibility Model.
The Chairman. Thank you, Dr. Preus.
Thank you all very much, both for your verbal statements
which were very provocative in terms of getting us thinking,
but also for your written statements. We'll start a round of 5-
minute questions now.
Dr. Howard, I have some questions on the tuition setting
flexibility that you seem to advocate. It seems to me if we
allow institutions to set their own tuition without any caps,
aren't we risking revenue maximizing tuition policies to hurt
low-income students the most? Even New York, the example you
cited, implies some caps by the State when you referred to
moderate increases. How do you strike a balance between greater
institutional autonomy and flexibility in setting tuition while
preserving affordability and access?
Ms. Howard. Well, I think we have to have all the
stakeholders involved in this process to try and come forward
with a tuition policy that is rational, predictable, and
manageable. States are all in different places in terms of
their levels of tuition. I think States that look at the
economic model--how much families are contributing, how much
aid is available--are able to come forward.
For example, New York just came out with a predictive model
where tuition will go up by X percent over the next 5 years.
Two and a half percent of that tuition increase must go back
into need-based aid. Families know for the next 5 years what
tuition will cost them. The model is rational because all the
stakeholders were involved and looked at what the State was
able to do. Therefore, the State committed to an MOE, a
maintenance of effort provision, that they would provide, which
then keeps the tuition at a level that's predictable and
manageable, and it's sort of not just going up and down based
on how the State income is faring or its economic situation.
I'm not advocating for tuition to spiral out of control by
institutions just willy nilly setting their own tuition, but to
have a model that's rational, predictable, and manageable for
all stakeholders.
The Chairman. Let me get to something else here. In the
previous hearing that we had, we had representatives of
colleges. Some of them were talking about how the different
colleges have instituted different policies, like procurement
policies, textbooks, things like that, that have really cut
costs dramatically. It occurred to me then that why aren't
other colleges looking at what some successful colleges have
done and start to replicate it.
I asked about it on the State level. We've seen some State
efforts that seem to be moving in the right direction, in terms
of procurement policies and other things like that. Why don't
we see more States replicating successful efforts--I think, Dr.
Howard, you mentioned Colorado, Kansas, Virginia--to enable
colleges and universities to streamline their operations? Why
aren't we finding more other States sort of replicating this?
What's the problem?
Mr. Morgan.
Mr. Morgan. Senator, that's exactly what we're doing in
Tennessee. Several national organizations have completion
agendas and pretty broad agendas, and we're part of, I think,
just about all of them. One of the things that Complete College
America does, for example, is bring States together in what
they call Completion Academies to share best practice. That has
been extraordinarily valuable for us in Tennessee in terms of
identifying strategies that have worked other places that can
work in Tennessee.
That's more designed around completion, but it also bleeds
over into operational issues as well. We are just now going
through a process in our system based on experiences in other
States of implementing a system-wide procurement model that
will really allow us to leverage our system--all the
institutions that we have, some 46 institutions--so that we can
group purchases and achieve the economies available.
We are also cooperating with the University of Tennessee
system to see if there's opportunities to bring the total
higher education spend in Tennessee to the table as we
negotiate with vendors for textbooks and for other kinds of
equipment, supplies, and so forth. We're very much about the
business of doing that.
I think what you would find across the country is that
States are heavily engaged in a kind of unabashed theft of
ideas from one place to another. I'm very interested in the
Oregon Promise Program that we're going to hear more about
probably as we talk. So I think that is happening. I think it's
happening in a very productive way.
The Chairman. My time has run out, but I'll recognize Dr.
Longanecker.
Mr. Longanecker. Yes, I believe there's--and this is really
strange for me to say, because I'm generally noted in the
community as a pessimist. But on this, I'm fairly optimistic.
The performance funding activities that are going on are all
focused on trying to improve the efficacy or the efficiency of
the system. What that does is it forces institutions to then
think about ways they can collaborate to do this.
Programs developed by our sister organization in the
Midwest--the Midwest Higher Education Compact, which does a lot
of collective purchasing. We've actually joined with them now.
We provide a master property insurance program that saves the
system in Nevada over $1 million a year by participating in
that. There is a great deal of energy on this. The programs of
the National Center for Academic Transformation have really
started to transform many institutions. I think Tennessee is
using that in a substantial way to provide higher quality
education, as measured by student outcomes, for a lower price.
I think there really are some wonderful things happening.
When I was a Fed back in the old days, in the last century,
there was--we always wondered why the great ideas that FIPSE
had weren't done by other folks. I think one of the reasons
that replication was so difficult is that there were really no
financial incentives for doing that. The money was OK. Change
is hard, so you do it first. It wasn't tough times. These are
tough times.
There's really a change in the attitude of the institutions
themselves all the way down into the faculty. For the first
time, I think, faculty are a significant part of the
discussions about the change agenda. I'm reasonably optimistic,
which is a strange place for me to be.
The Chairman. Thanks, Dr. Longanecker.
Senator Enzi.
Oh, I'm sorry, Dr. Howard. Did you have a comment?
Ms. Howard. Well, actually, I was going to basically echo
some of the statements that David has just mentioned. But, I do
want to say that I think States can do more. I think our
initial focus when institutions begin to experience a drop in
State support--that the focus was on the institution. I think
your last round of hearings brought forward a lot of those
innovations that occurred, because, at first, we were looking
at institutions to generate ways to reduce costs.
Now, I think, States are really fully at the table and
helping more. I think it may seem that States are coming to
this a little later, but I think that was simply because our
focus was initially at the institutional level. But they are
leading now.
The Chairman. Thank you very much.
Senator Enzi, thank you.
Senator Enzi. Thank you, Mr. Chairman.
Dr. Longanecker, when I was in the Wyoming legislature, I
was a delegate to the WICHE.
Mr. Longanecker. I know. You and your fellow Senator are
the only two WICHE Senators we have.
Senator Enzi. I remember being in San Francisco at a
meeting when Governor Geringer of Wyoming and Governor Leavitt
of Utah announced the Western Governors University. Among all
the college presidents, the main conversation was, ``Well, what
do we do with out-of-state students?'' And there's always that
kind of a tuition discussion as well. I appreciate all the
ideas that you put forward, and we'll have some specific
questions on more detail on some of those. I appreciate the
broad range of universities and colleges that you're
representing with that. You mentioned Dr. Preus and her
comments.
I was fascinated by your comments on student share. I'm not
so sure that we haven't gotten away from that a little bit and
think that everything should be provided for them. Can you tell
me a little bit more about how that student share is based on
the level of the school that they choose?
Ms. Preus. Mr. Chairman and Ranking Member Enzi, there is a
formula. I dare say it might be too complicated for the
committee meeting timeframe. We do a cost of attendance for the
community colleges, the 4-year publics, and 4-year independent
or private institutions. Then there's an expectation that a
community college student would not have to secure a loan in
order to afford tuition, which at the current rate is about
$3,200 a year for tuition. University and independent
university choice would require a minimum of $3,000 borrowing.
What we try to do is use a formula where the student would
work approximately 30 hours during the school year and full-
time during the summer. That dollar amount becomes the
student's share. Then for the university, it's that share,
which is right now $5,700, plus $3,000 in borrowing, so $8,700
for a 4-year university. That's how we establish the share.
Senator Enzi. It appears that that would make them have
some consideration on where they decided to go. I'll have some
more written questions for you on that one, too.
The main question that I have for all of you, actually, is
what steps can the Federal Government take to improve
affordability or maybe, more important, what ways the Federal
Government is impeding your efforts to improve affordability,
access, and completion? And that may take a much more detailed
answer than you might be able to give here. But, if you can,
just give me a brief answer on that and then follow it up in
your written responses.
Mr. Morgan. If I could, I'll give you one example, and this
is actually one that there's some hope that we're going to work
through this. One of the things we've done in Tennessee is
significantly redesigned our remedial and developmental
education programs. Many students come to us--70 percent or so
will come to us with some need for supplemental or what we now
call learning support needs. VA benefits don't pay for
remediation developmental education in ``independent study.''
Well, what we've discovered in Tennessee through this
reinvention of our remedial and developmental curriculum is
that emporium models, using math labs with tutors and faculty
in a very structured way--but it's an individualized study. We
would argue it's not independent study at all. We've been going
back and forth now for months with the VA about being able to
use their benefits to pay for that methodology, which has
proven to us to be far superior to the old models of
remediation and developmental instruction.
There are other examples. We're moving toward cohorts,
which are continuous enrollment programs, in our community
colleges and may well begin looking at that in our
universities. The Pell system doesn't really fit that very
well, and it's difficult to figure out how to use the Federal
financial aid that is available to support those kinds of what
we consider to be more successful, more innovative practice.
Senator Enzi. Thank you.
Anyone else?
Mr. Longanecker. I'd like to jump in on that. I mentioned
some of that. I think we need fairly radical change when you
get around to reauthorization next year in some regards. We
talk about a partnership. Right now, the partnership is the
feds pay, everybody else takes. There isn't a stake in the game
for the other principal actors.
I think to the extent that you could build in a reasonable
partnership, a real partnership, it would be useful so that
institutions have a stake in the student's success and there's
some value in that; so that the State has some stake in the
student's ultimate success and there's some value in that; so
that we're working together. Too often, I think the Federal
Government has tried to substitute for inaction by States or
institutions. Institutions don't share in some of the
exceptional costs, the default rates and others that are a part
of the game.
The States don't share in the cost, particularly now that
we don't have an SSIG program. That was a clever little
program. Before it was passed, almost no States had need-based
programs. Within a few years, every State did. It wasn't
designed well for the future, and so it faded away, as I think
it well probably should have. The idea of building in
partnerships and stakes--if States don't want to go along,
well, to hell with them. I mean, let their citizens suffer. The
States that struggle and do a good job, then they should
benefit from a partnership--a little hard for a Federal
Government to say.
We're beyond the point where I think we can expect--I mean,
I talked about the States changing their concept of
affordability. You're in the same place. I mean, come November,
you're going to be facing a huge set of difficult choices about
what you fund and what you don't fund. We're going to have to
find ways in which we work closer together as institutions,
State and Federal Governments, and as families.
I think the student share concepts that are built into the
Oregon Shared Responsibility Model are really exceptional. They
recognize the reality of what students do today, and they also
call loans loans, not financial aid. That's a student's
contribution. They're going to have to pay it back. It's in the
student's share, not in the financial aid. Loans are not
financial aid. College work-study is not financial aid. It's
work. We should recognize, though, and admit that. They're
benefits.
They're certainly good things to have. But we sell them in
the financial aid packaging as though we were giving a great
gift to the students. The unfortunate part is the students
sometimes think it was a gift and don't realize what the loan
is, and so we get ourselves in trouble.
Ms. Howard. I would still like to encourage you to continue
to look at the maintenance of effort provision. I think in the
Higher Education Act now, it's still rather weak compared to
some provisions in other education and healthcare measures.
Higher education is being squeezed out at the State level when
the States look at P-12 and they look at the needs they have to
meet in terms of healthcare, ET cetera. Higher education is the
entity that's really being squeezed out.
I think the maintenance of efforts provisions have worked.
States understand them. The States that have maintained those
provisions are the ones that--my institutions are saying that
they are developing robust partnerships. I think at the State
and Federal levels, higher education really needs to be looked
at as a part of the overall economic driver within communities,
and they're not kind of these stand-alone institutions that
should be treated just like any regular State agency.
Higher education is really the engine that is going to help
us satisfy the goals that you've heard some of my colleagues
mention and help us be competitive in the future. I think
continuing to ask States to maintain some effort--families and
institutions cannot do this alone. We're going to get through
the efficiency and effectiveness measures. We're going to be
very good at that. We're going to be innovative.
States are going to come along and help push us some more
to be more efficient and, hopefully, will give us more policies
that will allow us to be more efficient and effective, because
I still think States have not done everything they can do in
terms of giving campuses more leeway in terms of deciding how
to move dollars from one line item to another, how to use
capital investments and resources to generate savings, how to
do more things at the local level so that it isn't strained out
over a long period of time, which ends up costing the
institution more.
Maintenance of effort has been really important and
successful, and we need to strengthen that measure going
forward in the Higher Education Reauthorization Act.
Senator Enzi. I have far exceeded my time. I will do some
followup in writing and hope that you will provide more
answers, because this is a great panel and great answers. I
appreciate it.
The Chairman. It's a great panel, and this topic is at the
top of our list, because we've got to work on this next year on
the reauthorization of the Higher Education Act.
Senator Bingaman and then Senator Alexander.
Statement of Senator Bingaman
Senator Bingaman. Thank you all for being here. Let me ask
about the whole impact of technology on all of this that you
folks are doing and that we're talking about here. It strikes
me that in higher education, just as in a lot of other aspects
of our lives, technology is dramatically changing the models
that are available to folks. I mean, I read in the newspaper--I
haven't taken these courses yet, but there are a lot of very
high quality courses that you can take online.
Now, more and more, universities are agreeing that they
will set up systems or they'll hire folks to essentially do
monitored testing to see whether you've actually mastered the
substance of the course and whether or not you passed the
course. You don't get college credit for it. They're not going
to give you a university credit toward a degree. They'll give
you a certificate that says you passed the course, basically.
This is a type of individualized instruction that seems to
me to sort of undermine the whole concept of universities and
community colleges and everything, the way we've always thought
of it. It gets harder and harder for folks to justify paying
$30,000, $40,000, or $50,000 a year for tuition and devoting 4
or 5 years of their life to going and being on a campus when
they can sit at home or anywhere and take these online courses
and get credit--not get credit, but get at least an
acknowledgement that they have mastered the substance of what's
being taught.
I think, Dr. Longanecker, you talked about hybrid and
blending programs and that kind of thing. I guess I'm just
interested in any insights any of you can give me as to how you
folks are accommodating to this. I mean, if I was worried about
my ability to afford college, and I was just out of high
school, I would be looking seriously at what are the options
for getting some course work accomplished through these
alternative ways that are either no cost or low cost, and then
trying to find somebody who would acknowledge that I took the
courses and passed them. I don't know if any of you have
insights.
Dr. Longanecker, I'd be interested in your thoughts.
Mr. Longanecker. Sure. Clayton Christensen, who is sort of
the guru of disruptive technology, has written a book about
higher education and has suggested that, basically, the changes
in the delivery of higher education are the disruptive
technologies in higher education. I think he's absolutely
right.
There's really two elements to this. One is the technology
and the use of that in the instruction, and the other is the
movement more toward assessment of competence rather than seat
time as the measure of student learning, if you will. You put
those together, and they have the potential of sort of
radically reforming or destroying education as we know it. My
sense is that what's going to happen is it's going to be
reformed, not destroyed.
These are going to help us do a much better job, and we're
already seeing it. I think it's Maryland--they require that
students take a portion of their education online. In Idaho
now, they're actually requiring that of elementary and
secondary students. There's a presumption that that will be an
integral part of the way in which we learn, and it already is.
We find that most of the students who are taking online
courses in our public universities are actually students in the
university who could have taken the course on campus but maybe
they had something else they wanted to do during that time, or
they heard it was a better course, or some of them maybe heard
it was an easier course. I don't know.
By and large, there are a lot of reasons why people are
sort of blending things together. Some are taking totally
online. Some are taking blended courses. There's still great
value in the seminar and in the laboratory science course
that's on campus and whatever. I think what you're going to see
is a radical transformation.
Senator Bingaman. Am I also right, though, that as this
transformation occurs, there ought to be some opportunities to
save money?
Mr. Longanecker. Yes, there are. In fact, for the first 15
or 20 years of online, we didn't save money. We were learning.
It really wasn't--it was mostly an add-on, and it actually cost
us. But we are seeing technology advancements now that allow us
to save substantial money. I mentioned the National Center for
Academic Transformation, and they're saving money. Texas is
developing a $10,000 degree that involves the use of
technology. It's a different type of education.
Frankly, my three children got regular college degrees, and
I think there is value in the contact and in the campus and in
the community experience that's part of college. I hope we
don't lose that. I don't think we will, because I think many
people believe there's value in that. There are two substantial
benefits from the changes that are occurring. One is it will
reduce the cost of all college. The second is it will make
college much more available to a much larger share of the
population than we have traditionally reached.
The Chairman. Thank you, Senator Bingaman.
Senator Alexander.
Statement of Senator Alexander
Senator Alexander. Thanks, Mr. Chairman. I want to thank
you and Senator Enzi for these hearings. I think they've really
been very helpful and on a subject we all care about, which is
making it easier to afford college. I'm going to focus on one
word. I listened for it very carefully at our last hearing, and
it didn't come up until I mentioned it. I haven't heard it
today, although Dr. Howard almost said it. The word is
Medicaid.
We all seem to agree that the reason tuition is up is
because State funding is down. I know that based on my own
experience. Thirty years ago when I was Governor, 70 percent of
the cost of going to college in Tennessee was paid by the State
and 30 percent by the student. If we increased tuition by 3
percent, we increased the State's share by 3 percent. That was
just kind of understood.
Today, as Mr. Morgan has said, it's the reverse. Now, why
is that? Well, the main reason for that is because the cost of
Medicaid in the Tennessee State budget 30 years ago was 8
percent, and the cost today is closer to 25 percent. That's
true everywhere in the country. This isn't President Obama I'm
talking about. This has been happening for 30 years.
Just to give you an example of it, I came to Washington to
see President Reagan 30 years ago and said,
``Mr. President, this is squeezing--Medicaid is going
to squeeze everything out of our budget, and I won't be
able to afford to fund higher education properly. Why
don't you take all of Medicaid, Mr. President, and
we'll take all of K through 12 at the State level.''
He agreed with that and mentioned it in his State of the
Union. Nobody else agreed with it.
If we had done that at the time--and I'm just using this to
show an example of the problem--the States would have come out
about $5 billion ahead. In other words, if all the
responsibility for Medicaid had been in Washington, and all the
responsibility for K through 12 had been in the States, the
States would have come out about $5 billion ahead 30 years ago.
If that were true today, if all the growth of Medicaid over
the last 30 years had been in Washington, and the growth of K
through 12 had been in the States, States would come out ahead
to date $92 billion a year. I mean, the State of Tennessee
would have $2 billion more to spend, roughly, and I can
guarantee you that much of it would go to higher education.
Why is that? It's because the Federal Government requires
the States to spend money on Medicaid through maintenance of
effort formulas that are in the healthcare law and in Medicaid
and other mandates. They extend all the way to 2019. If you
tell the Governors and legislators they have to spend it on
healthcare, it won't be there to spend on colleges and
universities.
I don't like maintenance of effort. I'm opposed to one for
higher education. If so, why do we have Governors and
legislators? Why don't we just have a Washington Congress that
says, ``All right. Tennessee spends this much on roads, this
much on prisons, this much on''--and we can all go home. We
don't need Governors or legislatures. It's the maintenance of
effort for Medicaid that has gotten higher education into the
mess it's in today, in my judgment.
Turn it around the other way. What if the States and the
legislatures got together and tried to get a pledge from
Senator Corker and me that we'd never spend less than X on
roads in Washington? We wouldn't tolerate that, and they
shouldn't tolerate a maintenance of effort from here.
That's my view of it. I think the first thing we can do to
make it easier to afford college is to stop ordering States to
spend a certain amount on healthcare and leave Governors and
legislatures free to do what they want to do. You'd see a lot
fewer examples of what happened in Tennessee 2 years ago when
Medicaid spending went up 15 percent and higher education
spending went down 15 percent. Had they been free to spend it
as they wished to, I'm sure it would have been more even.
Now, Mr. Morgan, you've watched the State of Tennessee for
about the same time I have, over the last 30 years. You've been
with Democratic and Republican Governors. Let me ask you two
quick questions. One is what's the tuition today in your 4-year
colleges and in your community colleges?
Mr. Morgan. Senator, our tuition today in our 2-year
colleges is about $3,600 a year. It's about twice that, about
$8,000 a year, at the universities.
Senator Alexander. Do you have any comment over the 30
years on the effect that the increase in State spending for
Medicaid has on the reduction in State money available for
higher education?
Mr. Morgan. There is absolutely no doubt, Senator, that
over the years the increased cost of healthcare, mostly
represented in the Medicaid program, has crowded out other
State purposes. I think it's just true. Particularly, in a
State like Tennessee--and I don't want to get into a tax reform
conversation. But in a State like Tennessee, where our tax base
really is not very elastic--in fact, it is inelastic. As the
economy grows, the tax base doesn't. That has created
particular problems for us in order to keep up with mandatory
spending on things like Medicaid.
Other issues, though, have also contributed to that. It's
not just Medicaid. But Medicaid certainly is the largest. In
the last few years, in the last 5 or 6 years, the rate of
growth in what we now call our TennCare program was not as
great as it had been in prior years, although, as you note, a
couple of years ago was a pretty big hit, and we expect that to
continue now--kind of back on trend for the next few years. It
will make it much more difficult to fund higher education.
Higher education doesn't have constitutional protection in
Tennessee. Prisons and K-12 systems in Tennessee do have
constitutional protections, either based on historical
litigation or exclusive provisions in our State Constitution. I
wish we had maybe a little constitutional provision for higher
education.
Senator Alexander. Thanks, Mr. Chairman.
The Chairman. Thank you, Senator Alexander.
Senator Franken.
Statement of Senator Franken
Senator Franken. Thank you, Mr. Chairman, and thank all of
you.
Dr. Longanecker, one of my top concerns I hear about from
students in Minnesota, after concerns about how to pay for
college, is a concern that they really don't necessarily
understand the true cost of college. I hear this also, not only
from people all over the country, but from school counselors,
who are overwhelmed as it is, but get these aid letters that
are just really hard for them to sort out, let alone for the
parents of the student or the student.
Currently, every postsecondary school uses its own
financial aid award letters, making it really impossible for
students to compare letters to each other. I mean, if you look
at them, they'll use different names to describe the same
thing. Sometimes a loan won't even be listed as a loan. It'll
just have a code. And this is an award letter. Very often, you
don't think of an award as something you have to pay off with
interest, you know.
I've introduced bipartisan legislation to require colleges
to use a uniform financial aid award letter with common names
and common terminology. Do you see the value in this type of
legislation?
Mr. Longanecker. Yes, I do. In fact, Secretary Duncan and
the Department have come up with a recommended letter to the
communities----
Senator Franken. That's voluntary, though.
Mr. Longanecker. Voluntary. The dilemma I think we've got
right now is, in most cases, they aren't intentionally non-
communicative. But we're dealing here, for the traditional
college student, with a person who has very modest
understanding of personal finance. So unless you have a clear
representation of what the award is, it can be really
misunderstood.
I mentioned earlier that many students don't understand
what a loan is when they go to college. They get a loan, and
there's no payment with that loan, and they presume that that's
the way it's always going to be. It was a loan without
repayment, if you will. Or they're told that there'll be
repayment afterwards. Sometimes that's a loan that's accruing
interest. They don't understand what that means.
I have a personal story. My brightest daughter--I have
three wonderful daughters. My brightest daughter was going to
law school, and they gave her all the money she needed to go to
law school. And she says, ``Look at this. This is wonderful.
I'm going to take out all these loans. It's going to be
great.'' And I'm saying, ``No, you aren't. Look at the interest
rates on those.'' She says, ``Well, I don't have any interest
while I'm in school.''
Well, of course, she did. She didn't have to pay it. But it
was accruing. She's going to owe twice as much when she got out
of law school as she thought she was going to owe. This is an
extremely bright person. They hadn't explained all of that to
her. They were making sure she could afford to go to college. I
think it's very important that we have a standard way----
Senator Franken. And, once again, this is your brightest
daughter.
[Laughter.]
Mr. Longanecker. Yes, that would have been my brightest
daughter.
Senator Franken. I think that underscores the point.
Mr. Longanecker. Yes. She is a smart little bugger. I think
it's really important that they know. I know the Secretary is
trying to do it through voluntary means, because he doesn't
have the capacity to do it through a requirement. I think it
would be interesting and useful to have----
Senator Franken. I wonder who would have that ability to do
that.
Mr. Longanecker. The U.S. Senate could pass a bill on it.
Senator Franken. Oh, that's why I introduced the bill. I
mean, you said that traditional students----
Mr. Longanecker. Non-traditional students face the same
dilemma. You're coming back to school. It's been a long time
since you've been there. If you come from a low-income family,
you often have a real strong aversion to certain kinds of
assistance. You really need something that clearly lays it out.
Now, that doesn't mean they'll all know exactly what you said
or listen to what you said. That's the other side.
Senator Franken. Well, if we have a common form that names
everything the same so you can compare apples to apples----
Mr. Longanecker. Yes.
Senator Franken [continuing]. Also, that says how much
you're going to owe in addition to this--because very often,
the letters will just have what aid you have, meaning what
grants and what loans you have. It won't say how much more you
have to pay--and also to have something that says how much
you're going to have to pay per month to pay off these loans.
And if you have that, it would be much, much easier for
students.
This is something I hear from students all the time who are
in the middle of it, in college, or students that have
graduated and didn't realize the level they were going to pay.
And instead of saying, ``Oh, you should have been smarter,''
why not just make a uniform financial aid letter that everyone
can understand. I have very, very smart guidance counselors who
wrote me and thanked me, because they said, ``This is very hard
for me, and this is my job, let alone how hard it is for the
student.''
Mr. Longanecker. Yes. I think, again, not everybody will
get it. But we ought to give them the capacity to get it.
Senator Franken. Yes. I think that's obvious. Thank you.
I know I've gone over my time, Mr. Chairman.
The Chairman. Thank you very much.
Senator Whitehouse.
Statement of Senator Whitehouse
Senator Whitehouse. A quick editorial point and then two
questions. The editorial point is that at the tail end of all
that confusion, people are often left stuck with enormous
amounts of debt. One of the dirtiest deeds that was done to
American students was squirreled away in the so-called
Bankruptcy Reform Act, where they made student loans non-
dischargeable which shoveled buckets of money into the pockets
of the lenders who had lent at a rate that presumed that was
not the case. It was kind of a surprise attack on the students.
I don't think anybody has put their fingerprints on that
provision since then. But there it lies, and students have this
additional burden that ordinary borrowers don't have as a
result.
My two questions--the first is about Pell grants. Could you
each just touch very briefly on how important you think Pell
grants are in the financing strategy for college of lower
income families?
Ms. Howard. Well, certainly, I think it has played a real
important role in helping millions of individuals to be able to
obtain an education in this country.
Senator Whitehouse. We have one really important.
Ms. Howard. Right.
Mr. Longanecker. I'd say it's really, really important, but
not for every Pell grant recipient. That's one of the areas I
think there needs to be some reform in. For the students who
have the most need, it makes the difference in whether they go
to college or not. The way the program works, whenever we
increase maximum, we also bring in a new population of more
middle-income students. I know there's a lot of concern about
the middle-income students today. They aren't nearly as
vulnerable as that most-needy student, and we may need to think
about targeting better in the future.
Senator Whitehouse. Mr. Morgan.
Mr. Morgan. Pell grants are essential to our lower income
students being able to go. There's just no question about it.
Senator Whitehouse. Dr. Preus.
Ms. Preus. Extremely important.
Senator Whitehouse. OK. Really important, really, really
important and essential, and extremely important. Good. My
other question is one that I invite you to take for the record,
if you like, because in 2 minutes and 45 seconds, I'm not going
to get answers to this from everybody. But it has to do with
what many of you were saying about accountability and,
particularly, how it's measured.
A woman who is a single mother in South Providence and who
decides that she's going to improve her economic situation and
go to CCRI and start taking credits might very well start off
signing up for a bunch of credits and being optimistic. Then
she'll go in, and she'll find out, ``I was a little over-
optimistic about how much time and energy I could devote to
this. I'm going to have to drop a credit or so.'' And then
maybe in the next term, there's a childcare issue, so she drops
out entirely.
But she comes back again and takes another credit and then
maybe two more. In the meantime, she is learning skills and has
refocused her life, and, sure enough, boom, along comes a job
in the field that she's interested in. She gets that job. She's
got her economic foothold. So no more credits. She's satisfied.
For her, that CCRI experience was a success: ``I moved from
where I was not happy to a job where I am happy.''
When you look at her career from a purely university-based
perspective, she dropped credits, she missed semesters, she
never graduated, and she looks like a failure. In her life,
it's a success. Mission accomplished: ``I have a foothold job
that gets me into the economy where I want. I can take care of
my child, and I'm on my way.''
Who does the best job of figuring out what real success is
in terms of ultimate job placement? And how should we be
looking at that question?
Mr. Longanecker. Well, I'm really glad you asked that
question, because I think that is a success. Most of the people
who face those same dilemmas don't ever get to the point of
success. I think there are two or three things. One is we need
to find a way in which we define success, both in terms of the
completion of the education and in terms of why it was we
completed the education, so moving into the workforce.
I think this is really a great example of where the Federal
Government needs to bring together the activities of the Labor
Department and the Department of Education and, if you will,
perhaps the IRS or the Social Security Administration so that
we can determine whether the people have achieved the success
that we want them to. We're involved at WICHE with a four-
state--we're working with four States to essentially blend
their education data bases and their labor data bases, their UI
data bases, so we can look at the success of students.
Now, we'll be able to do some really good policy work on
that. But we won't be able to look at individuals because the
privacy laws don't allow us to do that.
Senator Whitehouse. My time is up. If anybody else would
like to add thoughts in terms of an answer, I'd love to hear
from you.
This has been a really terrific panel, and I want to thank
the Chairman for bringing you all here together--an impressive
panel.
The Chairman. We'll start a second round here. I'm sorry
that Senator Alexander left, and I don't mean to speak in his
absence. But I did want to respond a little bit on the Medicaid
issue. An article in the Washington Post this summer, dated
July 3d, quoting Kaiser Family Foundation, said that,
``Despite beliefs that Medicaid is claiming a larger
share of State budgets, the share of State general fund
dollars for Medicaid has remained fairly stable,
increasing from 14.4 percent in 1995 to 15.8 percent in
2010.''
The most recent up-tick is largely due to the recession. I
mean, who gets Medicaid--poor people and people who are out of
work. The idea of maintenance of effort--the CBO estimated that
if we repealed the maintenance effort, there would be 300,000
people added to the ranks of the uninsured, and that 400,000
beneficiaries would be pushed out of Medicaid and CHIP, two-
thirds of whom would be children.
Again, if they're kicked out, it's like they don't
disappear. They still get sick. They still have to be taken
care of. They're going to be a bigger burden if the sicker they
get, that's when they show up at the hospital or the emergency
room. I hope we're not trying to pit poor kids against college
students. It's poor kids. How do you get Medicaid? You've got
to be really poor. So I hope we're not going to try to pit poor
kids against college students.
The other thing I want to say about this is that--and I
don't have the data now, but I've seen it in the past--that
States in the past 20 or 30 years, when times are good, cut
taxes. Governors love to run on cutting taxes. So they cut
taxes. Then when they hit bad times, they can't raise taxes in
bad times. Then you get into another cycle of good times and
you want to cut taxes even more.
We have had a decreasing level of State revenues over the
last 20 to 30 years in general funds. What do the States do?
Lotteries, casinos--that's where they're making their money
now. And who plays the lottery? Who goes to the casinos? Poor
people. You don't see rich people at these casinos. Well, you
see them in Las Vegas maybe. They might go there for other
reasons besides just gambling.
When I hear States crying about their budgets and stuff, I
say,
``Well, show me what your revenues have done over the
last 20 or 30 years. How are you collecting your
revenues? Where are they going, and your budgets?''
You can't just say that just because--and the other thing
is this 30 years--and Senator Alexander was right about this--I
don't know if he alluded to this or not, but that we have a
growing number of poor people in this country in the last 30
years. Look at it. Just look at the data.
There was a graph in the paper the other day about more and
more income going to the top one-fifth--I forget what it was--
like 50 percent of our income is now going to the top one-fifth
of income earners, and less than 5 percent going to the bottom
fifth. That's what's eating us up. It's this lack of revenues
and the fact that we have a growing population of poor people
in this country.
I didn't mean to get off on all that. But I just wanted to
respond to that. Mostly, what I'm interested in, though, is
pursuing--as I said, this is a great panel. We have the Higher
Education Act next year. I think there's a lot of things we can
do. I feel strongly that maintenance of effort is something
that we really, really have to maintain.
Also, we've got to look at how we can incentivize States to
do the kinds of things you're doing in Tennessee or what you're
doing in Oregon, which really kind of gets my curiosity about
how you have a seamless system and how you encourage these kids
to get through the seamless system from community colleges to
colleges.
The other thing we need to tackle is pay for performance.
Well, what is performance? Is it 4 years? Well, you know, I
went to a 4-year college. But it took me one extra quarter to
finish because I changed my major. So I didn't have enough
credits in my new major. I needed to go another--we were on the
quarter system at the time, so I had to go an extra quarter.
There's a lot of that that goes on, where kids go to
college, thinking they're going to do something, and find out
that's really not where their aptitude lies. They change, and
it requires them to go to school for an extra semester or so.
Second, there's a lot of kids who go to college and because of
economic situations they drop out. They go to work for a while,
save some money, and go back to school.
Sometimes it does take longer than 4 years. I don't know
what the proper--is it 5 years? Is it 6 years? A lot of people
seem to have settled on 6 years. I don't know what the proper
cutoff is for some kind of pay for performance, for getting
these kids through in a short period of time. We know it saves
money. That I know. The shorter period of time you're in
college, the more money you save.
How do you accommodate these other things I spoke about in
terms of finances, in terms of illnesses, in terms of changing
your major? Once you start writing in exceptions, where do you
end? So who's got the answer for me?
Mr. Longanecker. I've got the answer. One of the real
advantages of these new outcomes-based funding programs like
Tennessee has is they provide all the right incentives to the
institution, but they don't tell the institution exactly how to
do it. For example, the institution knows now that they aren't
going to get paid for that person until he or she graduates. I
mean, they're not going to get as much money. They're going to
try and do everything they can to get that person to graduate.
The way you get a person to graduation is you break down
those barriers, so that you have a childcare program for this
person that was mentioned, so that she doesn't have to drop out
of school.
The Chairman. That costs money.
Mr. Longanecker. Yes, it costs money. But it's worth it
because you're going to get some money, and you're going to get
it sooner. It really allows the institutions to find the one
that fits their circumstances best. And you'd better believe
they'll follow it. They sure followed us on enrollments. We
said we wanted enrollments, and we got enrollments. We
particularly got enrollments on the 14th day, not necessarily
on the 30th day. A lot of students have dropped courses by
then.
There are a lot of the right incentives if you pay for
performance. Now, some States have sort of done a half a loaf,
and it's not bad. They've said they're not going to pay on
graduates, but they're only going to pay for completed courses.
Well, then, you provide a disincentive for--gosh, that bright
daughter I was talking about used to always sign up for 24 to
27 credit hours, because she knew she was going to drop the
ones that didn't seem to be as fun, or she couldn't get the
ones she really wanted so she signed up for others, hoping
she'd get into the ones she wanted.
There was a lot of gaming that went on. That served her
pretty well for convenience, but it sure cost the State of
Virginia, which is where she was going at that time, a lot of
money, because those courses got counted in their formula.
The Chairman. Mr. Morgan.
Mr. Morgan. One thing I would add to that--and I agree with
everything David said. But we can also structure our offerings
in ways that are much friendlier to students who have outside-
education obligations. They have families. They have work
careers. They have other balancing acts that they have to
perform. Historically, we haven't been very flexible in the way
we structure programs.
We're looking very hard--and the outcomes-based formula
drives us to look very hard--at how we craft programs that will
fit the needs of individuals. Frankly, that's something we can
learn from proprietary schools, because they've done a pretty
good job at building programs that fit people's real-life
needs. We just didn't do that very often in public education. I
think we're doing that now.
Perhaps in Senator Whitehouse's example of the person who
kind of comes and goes and finally gets what they need, had we
had the right program structure on the front end, it may have
been a much quicker route for that individual to be able to get
to an ultimate result that would put them in the economy at the
place they want to be. There are a lot of things that we can do
better.
There's just one other point I'll make and then stop. In
difficult budget times, historically, student services has been
one of the first things to be cut. In an outcome-based world,
suddenly student services becomes one of the last things you
want to cut, because having adequate services that can really
reach out to students, identify the problems that they have,
counsel them about the career choices that they need to make so
maybe they don't waste a quarter or a semester or a year
exploring--if they had a little more guidance up front, they
might have gotten on a path that would have led to a quicker
completion and, therefore, saved resources.
One of the things that we're seeing in our system is that
focus on outcomes has really developed a strong interest on the
part of all the stakeholders at the institution in having the
right student services available at the right time.
The Chairman. Thank you, Mr. Morgan.
Dr. Howard.
Ms. Howard. I just wanted to say that I also want us to
keep in mind that our students today, on average, at many of
our campuses are 23, 24, 25, 26 years of age, and they have
other real-life responsibilities. This sort of perfect
perspective we want to have in terms of how they move through
their educational experience is not going to be as achievable
for all adult learners. They're going to be, in the future, one
of the largest groups that we educate in this country.
We are trying to adjust and be prepared for everyone that's
going to be coming through higher education, and that's a big
challenge for us. Many of our colleges and universities are
beginning to have their own e-university within the walls of
the traditional university so that we do have this hybrid world
that students can take advantage of to garner the education
that they need.
We have one system in Pennsylvania that's starting to look
at a lot of the courses that are out there online and will look
at how to evaluate and judge those courses as to whether they
have quality and merit and students can take advantage of them
and receive college credit for them. That'll be another
lifeline that students can have in that State, for example, to
begin to move forward with their education.
I was listening to him describe the student that he was
talking about. Although she's happy now, it doesn't mean she's
not going to hit the wall later, that her job or her career
isn't going to require her to go back and receive additional
education if she decides she wants to move up in that
organization or she wants to change jobs again.
I do think in terms of higher education we're going to have
to have a more expansive view of it and stop looking at it as
an end and a beginning. I think we're all going to be involved
in continuing education the rest of our lives when we look at
the society that we're developing and how competitive it is. I
do think we need to be sensitive to that and develop as many
pathways as we can for individuals to be able to garner a
higher education. We are working on that, and we also are
looking at how we can make it most cost-effective, especially
for our students.
We don't have a pat answer for you today, whether it should
be four or six or whatever, because our population has changed.
When I went through college, everybody was 17, and everybody
traveled as a class. Very few of our students now and in the
future are going to be coming in as a group and then complete
as a cohort at the end. We have to be prepared for it when
people have to go off in terms of other roadways. So I hope we
won't lock ourselves back into a view that's kind of 25 years
old that everyone's going to go through in the same amount of
time and in the same way, because it won't happen.
The Chairman. Thank you very much.
Senator Enzi.
Senator Enzi. Thank you, Mr. Chairman. I think this has
been an extremely valuable panel. I've made pages and pages of
notes here and additional questions. Our work is really going
to be cut out for us. I mean, not only do we have to do the
Higher Education reauthorization, but we have to fix No Child
Left Behind.
The Chairman. We've got to redo that, yes.
Senator Enzi. The Workforce Investment Act should have been
done 6 years ago. I complain about it every year.
The Chairman. You've worked very hard on that.
Senator Enzi. I did hear the comment that we needed to
redesign remedial. That fits in with fixing No Child Left
Behind. If we don't bring them out of high schools better, then
they won't need the remedial courses. High schools have to be
somewhat responsible for that as well as colleges when it comes
to the cost, I think.
I think we're going to have to pursue this technology a lot
more, and it's going to be interesting--the age of those of us
who will be making the law, compared to the age that really
understands technology. I've said in my office, if the
computers break down, we'd just go find a kid on the street,
give him a movie ticket for fixing it, and it's done in 30
minutes. It's not quite that simple, and that isn't really how
we do it.
Recently, I was in Sweden, looking at their educational
system. In preschool, they're using i-Pads and doing
educational programs, and that goes all the way up. As they get
a little bit older, they communicate between each other doing
team projects, which I hated when I was in school because there
was always somebody that was the weak link that still got
credit for my work. But when they're using computers, just two
people linked up, the teacher can go back and check and see who
is doing the work. That has some advantages to promoting
teamwork, I think.
It was just fascinating to watch the ways that they were
able to use this that I'd never even envisioned before. They
didn't write stories. They filmed stories. We're going to have
to adjust to that level of technology as we're making the new
laws for this. The teachers liked the system once they adjusted
to it, because it freed them up to work with the kids that
actually needed help, and the kids that were really good were
just zooming along on their own. Somehow we're going to have to
adjust to that so we can allow others to adjust to it.
I have a whole range of questions, but we don't have the
time to cover them. I will submit them in writing to you and
would appreciate answers. You've just been a real treasure
trove of information for us. There are a lot of areas we need
to explore yet before we do the Higher Education
reauthorization. I just want to thank you for your
participation today and your great answers.
The Chairman. Thank you very much, Senator Enzi. And I'll
just join you in thanking the panel, all of you, for being here
and for all the work you do. As you can see, this is of great
importance to this committee, because this is something we have
to tackle next year.
We'll leave the record open for 10 days, until September
27. I want to thank all my colleagues for all their hard work
on this issue and other issues before the committee.
Also, to all of our witnesses who are here, we hope that
you will be available to us and to our staffs for
correspondence and other types of information as we move along
this fall and next year into the Higher Education Act
reauthorization. Thank you very much for the work you do.
Thanks for being here. The hearing is adjourned.
[Additional material follows.]
ADDITIONAL MATERIAL
Response by Muriel A. Howard, Ph.D., to Questions of Senator Enzi
and Senator Blumenthal
senator enzi
Question 1. At our last hearing, we heard from president Tom Snyder
of Ivy Tech, who described how his institution is looking to maximize
operating efficiencies and cut costs. In what ways are States
encouraging institutions to find operating efficiencies and cut costs?
In what ways do State laws and policies impede institutions' ability to
cut costs?
Answer 1. Given the dramatic rate of State disinvestment in public
higher education in recent years, public colleges and universities have
worked relentlessly to identify and implement cost containment
strategies, which have led to improved operational efficiencies and
productivity, while protecting students from additional tuition
increases. Public, master's-level comprehensive universities remain, on
a cost-per-degree completion basis, the most efficient sector of
American higher education. Yet these institutions continually strive to
reduce spending while maintaining academic quality. In an analysis of
institutional cost-cutting efforts, detailed in Cost Containment: A
Survey of Current Practices at America's State Colleges and
Universities, AASCU found top sources of cost containment to include
energy management, auxiliary operations (i.e., housing/dining),
distance/online learning, and efficiencies in administrative staffing
(see Appendix A, p. 33 of the report for a full listing).
Enhanced operational flexibilities for public college campuses is
another avenue for further cost reduction. These include changes to
capital construction processes, data reporting, regulatory burdens, and
overly prescribed rules regarding institutional purchasing activities.
Regarding the latter, an AASCU study found a number of State policy
reforms that could lead to significant cost savings in purchasing goods
and services; savings that can be reallocated to core teaching and
learning pursuits. Recommendations on State procurement policy reforms
are articulated in the Executive Summary (p. 8) of the report, Public
College and University Procurement: A Survey of the State Regulatory
Environment, Institutional Procurement Practices, and Efforts Toward
Cost Containment.
Question 2. As you are aware, Congress will be taking steps to
reauthorize the Higher Education Act in the next 2 years. With this in
mind, how can steps now being taken by the States serve as a model for
us? What types of things are being done in the States that can and
should be incorporated into Federal efforts to improve affordability,
access and completion?
Answer 2. As I highlighted in my testimony, States are providing
institutions with some flexibility of State procurement requirements,
as well as other State regulations, in order to allow institutions to
achieve cost-saving efficiencies. The Federal Government should examine
how Federal policies influence institutional costs and look at
minimizing their footprint in those areas.
Question 3. In your written testimony, you discuss the need to give
institutions more autonomy. However, given that public institutions are
State agencies, how much autonomy is too much? Where should States draw
the line?
Answer 3. One of the greatest attributes of the Nation's higher
education system is its incredible institutional diversity. Just as our
institutions possess distinct missions, so too do our States provide an
array of governance and oversight approaches involving public
postsecondary systems. Some States have strong, centralized systems
(Wisconsin, New York, North Carolina), while others provide
considerable autonomy (Colorado, Michigan, Virginia). In all States, a
general consensus among university leaders is that greater flexibility
to public universities can help maximize their ability to meet several
important objectives. These include cost containment, revenue
enhancement, operational efficiencies, economic development through
public-private partnerships, and college affordability (through
strategic tuition and financial aid policies).
It must be underscored that college and university leaders and the
governing boards remain adamant about ensuring full accountability for
taxpayer-provided State appropriations and student-paid tuition
dollars. Institutional flexibility--granted through enhanced State--
autonomy--and accountability--are not mutually exclusive. Both autonomy
and accountability are ideals that can be realized through sound public
policy measures and effective governance.
senator blumenthal
Question 1. Dr. Howard, thank you for being here today. I am
curious about the portion of your testimony when you suggested that
States give greater flexibility to institutions as a strategy to
increase college affordability. One of the main things that you call
for is greater institutional flexibility in setting tuition policy,
which you say will allow States to maximize efficiency and increase
affordability.
Can you elaborate on the connection between institutional
flexibility in setting tuition and college affordability?
Answer 1. As I mentioned in my testimony, in 40 States,
institutions do not have the ultimate authority to establish their
tuition rates. In many States, the State legislature has the ultimate
control creating a challenging dynamic. The legislature will simply
legislate a higher tuition when they are not able to increase State
funding to institutions. Giving institutions more control over this
function and allowing them to determine tuition price should result in
tuition-setting policies at public 4-year institutions that are more
sensitive to student-consumer costs.
Question 2. How specifically do you envision institutions using
such flexibility to foster affordability?
Answer 2. The most common method by which institutions utilize
tuition policy to increase student access is through allocating a
portion of tuition revenues for need-based student financial aid.
Institutional need-based aid is an effective college affordability
strategy for low- and lower middle-income student populations; a group
whose success in postsecondary education is paramount to national
economic and workforce goals.
Further, flexible tuition policies can facilitate college
affordability and student success. These include policies involving
out-of-state students whose revenues are used to subsidize the cost of
resident students, and differential tuition policies, which charge
prices that more accurately reflect the costs associated with academic
programs.
Response by David A. Longanecker, Ed.D., M.A., B.A., to Questions of
Senator Enzi, Senator Bennet and Senator Blumenthal
senator enzi
Question 1. At our last hearing, we heard from president Tom Snyder
of Ivy Tech, who described how his institution is looking to maximize
operating efficiencies and cut costs. In what ways are States
encouraging institutions to find operating efficiencies and cut costs?
In what ways do State laws and policies impede institutions' ability to
cut costs?
Answer 1. States are using general approaches to encourage their
systems of higher education to find operating efficiencies, thus
cutting costs.
The first, whether intentional or not, is the age-old
technique of starving the beast. Simply by reducing funding, either in
absolute levels as has been the trend in the West or in funding level
``per student,'' States have forced institutions to find ways of
providing their services for less. While institutions will contend that
these ``draconian'' actions are decimating higher education, in actual
fact institutions have found ways to manage well within reasonable
cuts. In fact, one of the salutary impacts of this is the recognition
of the value of marginal revenues from tuition (even without tuition
increases), which for most institutions are sufficient to cover the
marginal costs associated with new students, thus making new students
attractive as revenue producers, thus, not surprisingly, we see
unanticipated FTE student increases. Now, we hear that these new
enrollments are exacerbating the funding crisis, when in truth they
provide marginal revenues that are helping the institutions.
The second general approach, much more intentional, is
through performance funding, which provides strong incentives for
institutions to redirect their funds to those goals reflected in the
public agenda that drives performance funding reward and away from
peripheral activities that excite the institution but no one else.
The third general approach is incentive funding, which
pays institutions for entering into new activities that evidence
suggests will increase productivity. For example, South Dakota and
Tennessee have provided seed funding to encourage institutions to adopt
the blended instruction concept pioneered by the National Center for
Academic Transformation. Incentive funding and performance funding are
often thought of as the same thing, but they are far from being the
same. Performance/Outcomes funding pays for a desired outcome and comes
after the fact. Incentive funding pays for an input that is likely to
provide the desired outcome and comes before the outcome is produced.
They can often complement each other, but they are distinctly different
strategies.
Question 2. As you are aware, Congress will be taking steps to
reauthorize the Higher Education Act in the next 2 years. With this in
mind, how can steps now being taken by the States serve as a model for
us? What types of things are being done in the States that can and
should be incorporated into Federal efforts to improve affordability,
access and completion?
Answer 2. As I mentioned in my testimony, I believe the Higher
Education Act could be re-crafted to create a more active partnership
between the Federal Government and willing States. Given the primary
responsibility that the States have constitutionally to provide
education, such a partnership makes more sense than having the Federal
Government try and cover for States' lack of adequate attention to
assuring access to success in higher education. Doing this would be a
radical departure, because currently the Federal Government essentially
disregards whether States support the Federal goals in postsecondary
education or not. The argument against the partnership approach I
propose is that not all States care much about educational opportunity
for all, and the citizens of those States would be harmed if the feds
didn't step in. I argue that, while it is true that not all States are
equally committed to equal opportunity, we are well pass the huge
disparities of the civil rights era when the Higher Education Act was
initially passed in 1965, and that the Federal Government simply can't
afford and shouldn't afford to bail out States that don't do their
share. If States chose to screw their residents, that is unfortunately
their prerogative and the Federal Government shouldn't try and provide
cover for them. Rather, the Federal Government should share its
precious few dollars with States that share the national vision.
I noted in my testimony that I believe Oregon's ``design for shared
responsibility'' best captures this philosophy. Oregon's design
includes students, their families, philanthropy, institutions, and
State and Federal Governments as shared partners in ensuring access to
success for their students. Students, as the principal beneficiary of
the education are expected to contribute what they reasonably can
toward their education, and this student contribution can be provided
from current work, savings from past work, loans predicated on future
work, and/or earned scholarships. Families are expected to contribute,
as they should before they expect other taxpayers to do so.
Philanthropy's contribution is encouraged and incentivized because it
goes to reward the student (in the student's share) for the student's
effort to prepare well for college and does not replace the
contribution of government. Institutions partner by keeping their costs
and tuition under control, and the State and Federal Governments cover
the remainder in grant aid because everyone else is tapped out. Note
that much of what we currently call student aid is actually considered
part of the student's contribution in the Oregon scheme. College Work
Study is considered a portion of the student's earned contribution, and
student loans, likewise, are considered part of the student's earned
contribution, albeit from future earning, not current earnings. Indeed,
in the Oregon plan, the amount students are expected to borrow is
predicated on their projected earnings. It's a smart idea in which the
feds could benefit from looking at and perhaps emulating or partnering.
senator bennet
I particularly liked your reference to Washington State's model of
public/private partnerships. That's exactly the kind of collaboration
we need so that we can provide more opportunities for kids to pursue
important STEM fields in this 21st century economy.
Question 1. Are there best practices that have been developed in
Washington State that we can try to replicate in other States?
Answer 1. First and foremost, thank you, Senator, for your kind
introductory remarks.
With respect to the question above, the matching plan in Washington
is, indeed, a plan that could be replicated elsewhere and is indeed
being looked at by a number of States. The dilemma is finding a scheme
that is attractive enough to attract significant private sector
engagement. In Washington, the idea for this matching program actually
came out of the private sector, with leadership coming from Microsoft,
Boeing, and Costco, and the goal is to have a program that brings in $1
billion in private sector funds to match $1 billion in public funds.
The dilemma is that, despite the private sector leadership on
philosophy, the dollars haven't followed. To date the fund has about
$20 million in private sector contributions, which when combined with
the public sector funds, yields mighty slim pickings for distribution
to students.
Alaska and Wyoming in recent years have used portions of their
largess from gas, oil, and coal fee revenues to fund new ``endowed''
State-aid programs. It might have been interesting if they had
established an enduring matching component to keep both the State and
the private sector engaged, rather than essentially eliminating the
need for this portion of the public agenda to be ``taken care of '' and
no longer worthy of their concern.
Question 2. For example, how can Colorado work with companies who
need STEM graduates like Lockheed Martin to partner with schools like
Colorado School of Mines or Red Rocks Community College?
Answer 2. I'm currently intrigued by an idea being shopped in
California to build on the Federal loan program, and its income
contingent repayment options, to try and ``partner'' by buying down
student loans for students staying in California. In general, I think
this idea of intentionally building on the Federal programs has great
merit.
Another grossly underutilized strategy in American higher education
is the use of cooperative work-study. I'm not talking here about the
usual use of the Federal dollars for college work-study, but rather
programs pioneered at institutions like Northeastern University and
Cleveland State University, where large portions of the student body,
particularly in fields like Engineering, engage in intentional
partnerships between their University and local industry to provide
remunerated employment that imbeds the clinical part of their education
and thus is an integral part of their degree program. Such programs
have multiple benefits, including a wonderful way for students to pay
for their education, an opportunity for the firms involved to gauge
whether they want to hire these students (substantially reducing
recruitment costs), and a much greater likelihood that these students,
once educated at public expense in your State, will remain in-state
because they'll have time to grade in a firm within the State.
senator blumenthal
Mr. Longanecker, thank you for being here today. I applaud the work
that you have done with the Western Interstate Commission, and I hope
it continues. I was hoping you could speak further to the importance of
the Pell grant. I am a strong supporter of the Pell grant, and believe
it is a critical baseline for many students in need.
Question 1. I know that the western United States has a significant
investment in public education, and I'd like to hear your thoughts on
the ways the Pell grant has supported public institutions, and ways in
which the program can be improved.
Answer 1. Despite the rhetoric of some, the evidence is clear that
Pell grants make it possible for many people to attend college that
would not have done so without these grants. I prefer not to think
about the ways in which Pell grants help institutions, because they are
intended to help students, not institutions, but without doubt many
institutions that serve large numbers of Pell grant recipients would
not be able to remain in business if the students didn't have the
grants that make it possible for them to attend college. While many
focus on the dependency of for-profit institutions on Pell grant
recipients for the resources they bring, the case is no less true for
more community colleges, 4-year public universities, and less selective
private colleges.
What we now know, however, is that while Pell grants have made
access possible, they have not contributed as much as is needed in
promoting persistence and completion of Pell grant recipients. I
believe the evidence is strong that adding kickers in the Pell grant
program for students who achieve above expectations would lead to
performance above current levels. Indeed, for a few years we had this
with the Academic Competitiveness and Smart Grants, which provided
students additional funds if they took a rigorous curriculum in high
school and/or majored in a STEM field. We know from research that
taking the right curriculum in high school is absolutely key to
postsecondary success; nonetheless, we dropped the ACG and Smart Grants
programs because institutions didn't like them and because States
didn't like having to provide a viable high school curriculum. We also
know from research that greater academic intensity (taking more courses
and credit hours) leads to success, but we have no incentive for
students to take more courses and to become more intensively engaged.
In fact we ludicrously define ``full-time'' as 12 hours of study,
though no student could receive an Associate Degree in 2 years or a
Bachelor Degree in 4 years if they took 12 hours per term. Furthermore,
students whose Pell grant students perform exceptionally well are
treated no differently in the Federal programs than institutions whose
Pell grant students never graduate. We need to imbed within the Pell
grant programs incentives for students, institutions, and States to
partner in achieving greater access to success, rather than
accommodating access to failure.
Response by John G. Morgan, B.A., to Questions of Senator Enzi
and Senator Blumenthal
senator enzi
Question 1. At our last hearing, we heard from president Tom Snyder
of Ivy Tech, who described how his institution is looking to maximize
operating efficiencies and cut costs. In what ways is Tennessee
encouraging institutions to find operating efficiencies and cut costs?
In what ways do State laws and policies impede your ability to cut
costs?
Answer 1. The implementation of the Complete College Tennessee Act
of 2010 provided the greatest encouragement for institutions to find
operating efficiencies and reduce costs. As mentioned in my testimony,
a critical component of the CCTA is the revised funding formula that,
for the first time, emphasizes outcomes instead of enrollment. The
outcomes funding formula drives priorities within our institutions and
encourages accountability and measuring what is important--student
success.
As a result of the new funding formula and other components of the
CCTA, our institutions are striving to improve efficiencies and help
students manage their costs more effectively by (1) helping them
complete their education goals faster, thus saving tuition dollars, and
(2) consolidating services and operations.
Here are some specific examples:
1. Helping students complete their education goals faster.
a. Developing articulation agreements across our public
institutions.
b. Creating the Tennessee Transfer Pathways, a set of 49 universal
pathways in 29 academic disciplines. The pathways define a clear
roadmap of courses guaranteed to transfer to all of Tennessee's public
and many private institutions.
c. Launching a ``Finish Faster!'' initiative to create structured
learning communities at institutions across the system. The initiative
includes cohort, block scheduling and accelerated programs that provide
predictable scheduling to minimize completion time. A total of 175
structured-learning community programs are being offered in our
community colleges.
d. Creating and implementing the Degree Compass software that helps
students stay focused on the courses they need and will be successful
in completing.
e. Encouraging the development of dual credit and dual enrollment
programs that allow high school students to complete college credits
before they graduate.
f. Identifying completion points embedded within degree programs by
offering certificates for students as they complete academic
milestones.
2. Consolidating services and operations
a. Coordinating an e-procurement system to create efficiencies of
scale and negotiate lower pricing for products and services.
b. Developing a consolidated system for all 13 of Tennessee's
individual community colleges across the State.
c. Creating a marketing plan for Tennessee's Community Colleges to
relay a consistent message and enhance the image of the 2-year schools
to encourage more students to begin their college careers at a
community college.
d. Encouraging campuses to consolidate academic units where
possible and eliminate low-producing programs.
The greatest impediment to our progress in all of these areas has
been the lack of a comprehensive financing strategy for higher
education in Tennessee. Annual reductions in State funding for higher
education and a lack of need-based aid for students are significant
barriers to achieving our attainment goals. The former has contributed
to a consistent rise in tuition, and the latter has kept many able
students from completing their education goals.
Question 2. As you are aware, Congress will be taking steps to
reauthorize the Higher Education Act in the next 2 years. With this in
mind, how can steps now being taken by the States serve as model for
us? What types of things are being done in the States that can and
should be incorporated into Federal efforts to improve affordability,
access and completion?
Answer 2. When funding is tied to accountability and measurable
outcomes, it allows the State to guide priorities. Tennessee has the
advantage of a current Governor who has demonstrated his commitment to
increasing educational attainment as well as prior leadership that laid
important groundwork through the CCTA. While Tennessee's approach has
yet to be fully tested and may not be appropriate for other States, a
Federal expectation that States should establish data-driven,
performance-based approaches would be appropriate. The difficulties in
implementing such a policy would be numerous, especially creating
parity with private schools. However, it may be worth considering.
Changes in guidelines that regulate financial aid to encourage the
implementation of alternative-schedule programs (those that run beyond
the traditional fall and spring semester periods) may also allow
institutions to focus more on providing the program formats that
students need and demand.
While controversial and perhaps unrealistic, requiring all
institutions that receive Federal aid directly or through student
financial assistance to be accredited by agencies that use criteria at
least as rigorous as the Southern Association of Colleges and Schools
(SACS) and Council on Occupational Excellence (COE) would be a major
step forward.
senator blumenthal
Mr. Morgan, thank you for your testimony. I appreciate you sharing
the experience of Tennessee and its ambitious efforts to address the
issue of college affordability. I was particularly struck by the
efforts you described to reduce the time it takes for each student to
complete a program of study and receive a degree. One of the major
factors that increases a student's time to degree is the fact that many
students do not graduate from high school fully prepared to enter
higher education. As I talk to educators and employers in my home State
of Connecticut, I constantly hear that students who have practical
working experience are much more likely to successfully transition into
an institution of higher education. Because of these conversations, I
am planning to introduce legislation that would expand high-quality
internship and pre-apprenticeship programs in secondary schools.
Question 1. Can you speak to the way in which practical working
experience can prepare a student to enter an institution of higher
education? What role can internships and pre-apprenticeships play in
reducing time to degree?
Answer 1. While I cannot provide evidence related to internships
and apprenticeships at the secondary school level, our TBR institutions
have many examples of the value of internships and cooperative
education programs for enrolled students. Community college allied
health programs require students to spend time in health care and
emergency response agencies. Our education programs embed student
teachers in secondary schools. Engineering programs offer cooperative
training that allows students to work full-time at a company in the
midst of their academic plans. These programs, and many more like them,
have resulted in students who are more employable and better prepared
to enter the workforce. Students who participate develop both soft
skills and the hands-on training needed for their careers, refine their
interests, focus their studies in the fields they want to pursue, and
better understand the work environment.
Question 2. One of my great concerns surrounding college costs
deals with transparency. I have heard time and time again that many
students aren't adequately presented with the costs they will face, and
end up saddled with debt that they are unable to repay. I was pleased
to see from your testimony that the Tennessee Technology Centers are
leading in transparency, by, for example, providing up-front lists of
non-tuition costs such as books and supplies. What more can the Federal
Government do to promote disclosure and standardization, so students
know what to expect financially?
Answer 2. This issue is important--particularly as students compare
public institutions with proprietary schools. In Tennessee, students
can easily enroll in a proprietary program with the ease of a form and
signature. Disclosure is critical as students consider their options;
they need clarity and understanding of the difference between grants,
scholarships and loans.
While I am not familiar with the details of Senator Franken's
proposal as discussed in the hearing, the concept of requiring a
uniform disclosure to students receiving loans that illustrates likely
monthly repayment obligations and total repayments over the loan life
is worth further consideration.
Response by Camille Preus to Questions of Senator Enzi, Senator Bennet
and Senator Blumenthal
senator enzi
Question 1. At our last meeting, we heard from president Tom Snyder
of Ivy Tech, who described how his institution is looking to maximize
operating efficiencies and cut costs. In what ways is Oregon
encouraging institutions to find operating efficiencies and cut costs?
In what ways do State laws and policies impede your ability to cut
costs?
Answer 1. The community colleges in Oregon are chartered by the
State but are independent jurisdictions with locally elected board
members. This statement is by way of explanation and context, not an
excuse. Given the ``great recession,'' Oregon like many other States,
has reduced its State support for postsecondary education resulting in
many negative impacts such as increases in tuition, reduction in
program offerings. These funding reductions have also generated a
number of administrative and service efficiencies as institutions look
to balance increasing student success with reduced revenue.
Efficiencies within the institutions include actions such as
centralizing and streamlining student services, eliminating
redundancies in data collection and reporting. At the State level we
have incented institutions to reduce program development costs by
underwriting development of new programs across institutions, expanding
and sharing on-line program delivery, disseminating and instituting
promising practices.
Question 2. As you are aware, Congress will be taking steps to
reauthorize the Higher Education Act in the next 2 years. With this in
mind, how can steps now being taken by the State serve as a model for
us? What types of things are being done in the States that can and
should be incorporated into Federal efforts to improve affordability,
access and completing?
Answer 2. Institutional accountability no longer represents
responsibility for a student only while s/he is enrolled in your
institution. Stakeholders, institutions, and policymakers now want to
know how the student educated in one educational sector did in the next
step of the educational journey. One way to track student progression
is through the exchange of data from one educational institution to
another. Currently, FERPA allows this exchange to systematically happen
in only one direction, forward, a high school may send student record
information to a college but the college would need to obtain
permission from student to send his or her college information back to
the very high school from which s/he graduated. Oregon is adapting its
educational structure to create a more seamless Pre-K through 20 system
including accountability across all educational organizations. A
Federal change to existing FERPA guidelines to explicitly allow the
sharing of student data backward down the education pipeline would
greatly assist in the tracking of student preparedness and progress.
senator bennet
Question 1. You mentioned development of a coordinated pre-school
through graduate school system of public education in Oregon.
1. What types of issues have you focused on in early and K-12
education in order to make sure that students are college- and career-
ready?
Answer 1. For early learning, the key issues are ensuring that
children are raised in stable and attached families and are receiving
the foundations necessary to guarantee they are arriving at
Kindergarten ready to learn. The creation of ``early learning
coordination hubs,'' and focus on implementing some early screening and
assessment of risk factors for children, are aimed at ensuring
communities are able to coordinate and deliver more services to
families based on their needs. At the K-12 level, several issues emerge
in the area of ensuring students are college- and career-ready--
certifying students are reading at grade level in elementary school,
engaging and empower parents (particularly parents in underserved
communities) to support students in reading and in creating a sense of
future for their children, exposure in middle grades to college
culture, to career and vocational opportunities, hands-on learning,
problem solving and higher levels of problem solving. Important work is
also being done to confirm that high school students have access to
college credits and real world experiences, such as internships, by
more effectively bridging the 11-14 grades.
Question 2. For example, in Denver, the Children's Corridor works
to make sure that all children are prepared for college and their
careers by providing a variety of affordable health, wellness and
education services to support each child. What would we need to do to
bring this kind of coordination to scale?
Answer 2. In Oregon, the Early Learning Council is currently
working on a Global Children's Budget that will be presented to the
Oregon Education Investment Board and Legislature in October 2012. This
budget describes the State investment necessary to support the health,
wellness and educational services for all early learners in Oregon.
senator blumenthal
I was particularly struck by the portion of your testimony when you
described the rapid growth of high skill jobs. Unfortunately, the
degrees and certificates offered by our higher education system do not
always reflect the prevalence of these emerging industries. I hear
about this trend all the time as I travel across my home State.
Connecticut employers frequently tell me that they can't find graduates
with the skill sets that are required to enter emerging, high-growth
industries. For that reason, I introduced the Community College
Innovation Act, a bill that would encourage community colleges to
develop job training programs that lead to an industry-recognized
credential in a high-growth industry.
Question 1. Do you see a need to expand job training programs that
encourage students to enter high-growth industries?
Answer 1. It is critical to the health of our economy that
community colleges offer high-quality technical training programs in
high-growth industries. Indeed, it is a fundamental part of our
mission, in an ongoing effort to respond to local and regional economic
needs. However, this work presents constant challenges, both in the
identification of the most promising opportunities, when only a limited
number can be addressed and in identifying resources to meet them.
Compared to traditional transfer programs, technical training programs
are generally far more costly to deliver, as they usually involve
expensive technology and must have limited class sizes. For these
reasons, and because of the extreme negative impact from recent funding
cuts in Oregon and virtually on all community college campuses across
the Nation, additional financial support is needed to expand these
important efforts. Therefore, the Community College Innovation Act
would be extremely beneficial to our institutions if it were enacted
and subsequently funded. The Federal Government also can play a
constructive role by ensuring that community colleges and State
agencies have the wage/earnings data they need to evaluate the impact
of their training programs.
Thank you again for the opportunity to appear before the committee
and please do not hesitate to contact me if I can be of further
assistance.
[Whereupon, at 12:17 p.m., the hearing was adjourned.]