[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]


 
                         REVIVING OUR ECONOMY:
                       SUPPORTING A 21ST CENTURY 
                              WORKFORCE

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

                             FIELD HEARING

                               BEFORE THE

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                HEARING HELD IN Mesa, AZ, MARCH 20, 2014

                               __________

                           Serial No. 113-53

                               __________

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                COMMITTEE ON EDUCATION AND THE WORKFORCE

                    JOHN KLINE, Minnesota, Chairman

Thomas E. Petri, Wisconsin           George Miller, California,
Howard P. ``Buck'' McKeon,             Senior Democratic Member
    California                       Robert C. ``Bobby'' Scott, 
Joe Wilson, South Carolina               Virginia
Virginia Foxx, North Carolina        Ruben Hinojosa, Texas
Tom Price, Georgia                   Carolyn McCarthy, New York
Kenny Marchant, Texas                John F. Tierney, Massachusetts
Duncan Hunter, California            Rush Holt, New Jersey
David P. Roe, Tennessee              Susan A. Davis, California
Glenn Thompson, Pennsylvania         Raul M. Grijalva, Arizona
Tim Walberg, Michigan                Timothy H. Bishop, New York
Matt Salmon, Arizona                 David Loebsack, Iowa
Brett Guthrie, Kentucky              Joe Courtney, Connecticut
Scott DesJarlais, Tennessee          Marcia L. Fudge, Ohio
Todd Rokita, Indiana                 Jared Polis, Colorado
Larry Bucshon, Indiana               Gregorio Kilili Camacho Sablan,
Trey Gowdy, South Carolina             Northern Mariana Islands
Lou Barletta, Pennsylvania           Frederica S. Wilson, Florida
Joseph J. Heck, Nevada               Suzanne Bonamici, Oregon
Susan W. Brooks, Indiana             Mark Pocan, Wisconsin
Richard Hudson, North Carolina
Luke Messer, Indiana

                    Juliane Sullivan, Staff Director
                 Jody Calemine, Minority Staff Director
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on March 20, 2014...................................     1

Statement of Members:
    Kline, Hon. John, Chairman, Committee on Education and the 
      Workforce..................................................     1
        Prepared statement of....................................     6

Statement of Witnesses:
    Barton, Cathleen, Education Manager, Intel Corporate Affairs, 
      Southwestern United States, Intel Corporation, Chandler, 
      Arizona....................................................    15
        Prepared statement of....................................    17
    Crow, Michael, Ph.D., President, Arizona State University, 
      Tempe, Arizona.............................................    76
        Prepared statement of....................................    79
    Farley, Christy, Vice President, Government Affairs and 
      Business Partnerships, Northern Arizona University, 
      Phoenix, Arizona...........................................   153
        Prepared statement of....................................   155
    Hart, Ann, Weaver, Ph.D., President, The University of 
      Arizona, Tucson, Arizona...................................   140
        Prepared statement of....................................   142
    Heumann, Rick, Vice Mayor, City of Chandler, Chandler, 
      Arizona....................................................     7
        Prepared statement of....................................    10
    Lambert, Lee, D., Chancellor, Pima Community College, Tucson, 
      Arizona....................................................    31
        Prepared statement of....................................    33
    Lara, Ernest, A., P.h.D., President, Estrella Mountain 
      Community College, Avondale, Arizona.......................   149
        Prepared statement of....................................   151
    Pepicello, William, Ph.D, President, University of Phoenix, 
      Tempe, Arizona.............................................    56
        Prepared statement of....................................    58

Additional Submissions:
    Mr. Lambert: Meeting Tomorrow's Workforce Demands Today......   167


                   Reviving Our Economy: Supporting a
                         21st Century Workforce

                              ----------                              


                        Thursday, March 20, 2014

                        House of Representatives

                Committee on Education and the Workforce

                            Washington, D.C.

                              ----------                              

    The committee met, pursuant to call, at 9:00 a.m., at the 
Arizona State University, Polytechnic Campus, 7001 East 
Williams Field Road, Student Union, Cooley Ballroom B, Mesa, 
Arizona, John Kline [chairman of the committee] presiding.
    Present: Representatives Kline, Salmon, Rokita, and 
Grijalva.
    Staff Present: Janelle Belland, Coalitions and Member 
Services Coordinator; Alex Sollberger, Communications Director; 
Brian Melnyk, Professional Staff Member; Jenny Prescott, 
Legislative Assistant; and Rich Williams, Minority Education 
Policy Advisor.
    Chairman Kline. A quorum being present, the committee will 
come to order. Good morning, and it is a delightful morning. 
Speaking as a Minnesotan, I can tell you that I am thrilled, 
absolutely thrilled to be here. Welcome to our guests, and 
thank you to our witnesses for joining us today. I would also 
like to thank Arizona State University for hosting our field 
hearing to discuss ways states, institutions, and the federal 
government can better support the 21st century workforce.
    This committee has convened numerous hearings in Washington 
to examine the challenges and opportunities facing the nation's 
classrooms and work places. Whenever possible, we like to bring 
the voices of everyday Americans to the Capitol to learn their 
ideas on how to move our country. But it is even better when we 
have the opportunity to get out of Washington and into local 
communities, which is why we are in Phoenix today.
    My friend and colleague, Matt Salmon, invited the committee 
to Arizona's 5th District to talk to area business leaders, 
education stakeholders, and state officials to learn how people 
are working together to prepare graduates in the Grand Canyon 
State for success in the workforce.
    The House Committee on Education and the Workforce last 
year advanced legislation we called the Skills Act to revamp 
the nation's network of job training programs, empower 
employers, and help put more Americans back to work. The 
committee is now working to improve career and technical 
education, or CTE, by reauthorizing the Carl D. Perkins Career 
and Technical Education Act. We are also exploring 
opportunities to strengthen our higher education system through 
the reauthorization of the Higher Education Act.
    One of our top priorities in both these endeavors is 
supporting innovation, whether by encouraging CTE schools to 
adopt technology that mirrors the tools used in the local 
workforce or by championing policies that help students earn a 
postsecondary degree in less time with less debt. In fact, Matt 
Salmon has introduced legislation known as the Advancing 
Competency Education Project of 2013 that lets colleges offer 
federal financial aid based on students' prior experience and 
knowledge instead of credit hours, allowing students to advance 
in a degree program faster without accumulating as much debt.
    Once again, I would like to thank our witnesses for joining 
us today, and we look forward to a productive discussion. I 
will now yield to Mr. Salmon for his opening remarks.
    Mr. Salmon. Thank you, Mr. Chairman. Good morning, and 
welcome to this important hearing to discuss ways our education 
and our business communities can collaborate to encourage 
economic growth. I do not care where you go in America, when 
you ask people what is on their minds, it is get more jobs 
going in this country.
    I want to thank Chairman Kline for his leadership and for 
making the trip all the way here to Arizona to do this hearing 
today. I hope I delivered on my promise of fabulous weather.
    Chairman Kline. You did.
    Mr. Salmon. Particularly given the snow we have been 
traipsing through in D.C. and a little bit of snow in your home 
state of Minnesota. I want to thank Todd Rokita from Indiana 
for making the trip and my dear colleague from Arizona, Raul 
Grijalva, for attending this hearing, as well.
    Here in Arizona, we not only enjoy fantastic winter 
weather, but also great traditions of educational opportunities 
and pro-growth business environment. In fact, today we will 
hear from some of our great educational institutions on the 
innovative ways that they are working to deliver education to 
our students, and as well how they are working to connect with 
local businesses to fill the pipeline for tomorrow's workforce.
    Arizona has a rich history. We need only look to the great 
seal to the State of Arizona to find where our economy was at 
the beginning of our statehood. The five Cs include cattle, 
cotton, copper, citrus, and climate. These Cs are still 
important to our economy, including copper, which accounts for 
two-thirds of the entire nation's output. However, Arizona 
continues to evolve and thrive. Our education and our business 
communities have further developed Arizona into the diverse 
economy it is today with healthcare, transportation, and 
innovative industries being core drivers of employment through 
the state.
    Today we are going to hear from the City of Chandler on the 
state of the local economy, as well as how the educational 
community ties into local business there. Chandler is extremely 
well known for its high tech industry, which makes up 75 
percent of the manufacturing employees, while the national 
average is just 15 percent. Every city in the nation is host to 
unique workforce industries, so it is important to connect with 
local businesses to ensure that we are meeting the needs of 
employers. We can then better prepare students with the skills 
that they need to enter the workforce today and be equipped to 
adapt to the trends of the future.
    We are also going to hear from Intel, one of the world's 
largest high tech semiconductor chip manufacturers. Intel has 
numerous inventions that most of us on a daily basis, including 
the processors found in most personal computers, use. They have 
had a large Arizona presence since 1979. They have almost 
12,000 employees in Arizona alone, and it is the largest 
employer in Chandler. They continue to grow with the expansion 
of their 300 million research and development site. Without 
employers like Intel, our high tech industry in Arizona would 
not be anywhere near where it is today.
    I am also looking forward to testimony from the University 
of Phoenix, who has worked for years to make higher education 
more accessible and recently won accolades as a top 10 online 
MBA program. Phoenix actively engages the business community 
through their Industry Strategy Group as well as their 
Workforce Solutions Department, including engaging businesses 
such as Microsoft and Cisco Systems.
    One of the largest community college networks in the nation 
is here with us today, and that is the Maricopa Community 
Colleges with their Estrella Mountain campus, also with us is 
the Pima Community Colleges. Our community colleges have been 
such an important part of higher education in this state. They 
work closely with our high schools and our dual enrollment 
programs as well as with our universities for seamless 
transition towards degrees. Of interesting note, I met my wife 
at the community college, and we are still married, so it 
worked out pretty good.
    Another important aspect is their work with community 
businesses with career and technical education tracks. Chandler 
Gilbert Community College, just next door to this campus, works 
in tandem with local authorities and law enforcement, fire 
safety, aviation, nursing, and other in-demand career fields to 
prepare their students.
    We are also extremely fortunate today to have 
representatives from our three esteemed public universities: 
Christy Farley, a dear friend and somebody who has advised me 
on education policy for a lot of years, from Northern Arizona 
University out of Flagstaff. Dr. Ann Hart--we are just thrilled 
to have her. She has been a breath of fresh air to come and run 
the University of Arizona. And of course from my alma mater, 
Dr. Michael Crow from Arizona State University out of Tempe. Go 
Sun Devils.
    I would like to thank ASU for opening their doors for this 
committee field hearing here at the polytechnic campus, which 
encompasses high-tech research and education, including the 
renowned Algae Laboratory. ASU is one of largest, if not the 
largest, university in the nation, and is redefining higher 
education through the new American model. One of ASU's student-
business partnerships is with Intel, and they worked together 
to develop a customized engineering degree for some of the chip 
makers, Arizona-based employees.
    The U of A is the state's finest university--excuse me--
first university. Michael, I did not mean to give you a heart 
attack.
    [Laughter.]
    Mr. Salmon. That was just a reading error. The University 
of Arizona is the state's first university, operates the 
state's only public medical school, and is the largest research 
institution in our state. They also connect with businesses 
such as Raytheon to work toward inspiring the next generation 
of innovators. And I might add that they were Obama's pick in 
the final four, and so they are probably going to be in the 
final four. And as an ASU grad, I am really proud of them, too.
    Northern Arizona University State has connected with the 
business community through its business outreach boards locally 
as well as nationally.
    All of the institutions here today provide an excellent 
educational environment for students and continue to be 
pioneers in higher education. All work to think outside the box 
with new concepts, interdisciplinary collaborations, and 
academic programs that educate our students, provide important 
research, and help U.S. industry prosper. So it should come as 
no surprise to anyone in this room that the cost of education 
is on the minds of virtually everybody in America: families, 
parents, students. And in an effort to address this challenge, 
I recently introduced bipartisan legislation to start a pilot 
project for higher education institutions to pursue the 
competency-based education model, something NAU offers through 
personalized learning.
    My bill, H.R. 3136, The Advancing Competency-Based 
Education Project of 2013, allows institutions to tailor 
instruction to students' unique needs and learning pace. 
Students will progress when they have mastered the requisite 
knowledge and skills necessary for a course rather than just 
time spent in a classroom. This controlled demonstration 
program could reduce costs and provide opportunities for 
students to earn their degree on time or early in some cases. 
Perhaps most importantly, this bill would allow certainty and 
accessibility for a broad array of higher education 
institutions to provide this 21st century learning environment.
    The goal for the vast majority of students entering 
postsecondary education is to obtain the skills necessary to be 
competitive in the job market with the critical thinking skills 
to adapt with an ever-changing workforce.
    I look forward to hearing from the experts in these fields 
today on how we can work together towards this goal. I want to 
thank our first panel of witnesses: Rick Huemann from the City 
of Chandler, Dr. Pepicello from the University of Phoenix. Is 
it Pepicello?
    Mr. Pepicello. Pepicello.
    Mr. Salmon. Okay. Pepicello from the University of Phoenix, 
Cathleen Barton from Intel, and Lee Lambert from Pima Community 
College who appear on the first panel. Thank you very much. And 
Dr. Michael Crow, Christy Farley from Northern Arizona 
University, and Dr. Ernest Lara from Estrella Mountain 
Community College for the second panel, and Dr. Ann Hart.
    We look forward to this discussion on ways we can 
collaborate among the education and business communities in 
providing a gateway to 21st century jobs. And I look forward to 
a productive hearing. I will bet you all thought I was trying 
to filibuster, but I wasn't.
    Chairman Kline. I thank the gentleman. I now recognize Mr. 
Grijalva from Arizona for his opening comments.
    Mr. Grijalva. Thank you, Chairman, and thank you for 
holding this field hearing, a very important topic and I'm very 
appreciative of the hearing here in Arizona. I know you had to 
endure leaving Minnesota to be with us, and we appreciate the 
sacrifice.
    To my good friend, Mr. Salmon, thank you for initiating the 
idea. I very much appreciate it. We are glad that the community 
college has provided you with an enriched life of bliss. And 
the Freudian slip about U of A is welcomed as well.
    I used to be a big much bigger booster of the U of A and 
then redistricting happened. So I have like 20 percent of 
Maricopa in my district, so I am working towards something I 
think we all struggle with: bipartisanship and trying to be as 
representative of all sides.
    Thank you to the witnesses, to the public universities and 
their leadership for being here. It is very much appreciated. 
For the private for-profit college, Phoenix, for being here. I 
appreciate it. The community colleges, which I think is an 
important addition in terms of the numbers of students that 
find that to be the most accessible and affordable place to 
start. And to both of the leaders from Estrella and Pima, thank 
you very much.
    The private sector, how that collaboration and how we are 
going to streamline to ensure we are reviving our economy and 
the workforce that's needed for that revival is in tech areas. 
And to the elected leadership, thank you as well, sir, I think 
that perspective in the overall community health and 
satisfaction levels that we need in our communities, your 
testimony will be very helpful.
    We are talking about a lot of things, but I think one of 
the areas I hope to talk about is adult education and what it 
means to try to bring remediation and assistance, whether it's 
for English language learners, GEDs, adult-based education, to 
give people the foundation in order for them to take the next 
step to prepare themselves for a new expanded and different 
workforce that is evolving. Accountability. I am sure that is 
an issue that is important, whether it is a discussion of the 
gainful employment rule or whether it is a discussion of what 
public institutions feel in terms flexibility and oversight 
from the federal government.
    And collaboration, and as we reauthorize the Perkins Act, 
the collaboration that we can use with the Perkins Act as an 
incubator on how we have that collaboration to enact 
legislation and initiatives and funding for the private sector 
and public institutions and workforce institutions, collaborate 
and some incubators to look at that private/public partnership 
that everybody talks about that maybe needs a little more 
``shall'' rather than ``may'' in legislation.
    I also want to talk a little bit about as we go forward 
that there is a reviving of our economy that depends a great 
deal on who we as a nation and we as a Congress invest in the 
growth of this community of ours, and central to this is 
workforce development. Central to this is the public 
institutions that will educate that workforce.
    And so this is a timely hearing, Mr. Chairman. I appreciate 
the opportunity to be here, and I yield back.
    Chairman Kline. I thank the gentleman. Pursuant to 
committee Rule 7(c), all committee members will be permitted to 
submit written statements to be included in the permanent 
hearing record.
    Without objection, the hearing record will remain open for 
14 days to allow statements, questions for the record, and 
other extraneous material referenced during the hearing to be 
submitted in the official hearing record.
    [The information follows:]
    [The statement of Chairman Kline follows:]

Prepared Statement of Hon. John Kline, Chairman, Committee on Education 
                           and the Workforce

    Good morning. Welcome to our guests, and thank you to our witnesses 
for joining us today. I'd also like to thank Arizona State University 
for hosting our field hearing to discuss ways states, institutions, and 
the federal government can better support a 21st century workforce.
    This committee has convened numerous hearings in Washington to 
examine the challenges and opportunities facing the nation's classrooms 
and workplaces. Whenever possible, we like to bring the voices of 
everyday Americans to the Capitol to learn their ideas on how to move 
our country forward. But it's even better when we have the opportunity 
to get out of Washington and into local communities, which is why we 
are in Phoenix today.
    My friend and colleague Matt Salmon invited the committee to 
Arizona's 5th District to talk
    to area business leaders, education stakeholders, and state 
officials and learn how people are working together to prepare 
graduates in the Grand Canyon State for success in the workforce.
    Arizona's economy continues to show signs of improvement. The 
unemployment rate has declined over the last year, and in January the 
state created 8,300 new jobs. To continue this trend, it is critical 
more young people in Arizona have access to the training, education, 
and hands-on experience necessary to meet the needs of the local 
workforce and compete for in-demand jobs.
    The House Committee on Education and the Workforce last year 
advanced legislation we called the SKILLS Act to revamp the nation's 
network of job-training programs, empower employers, and help put more 
Americans back to work.
    The committee is now working to improve career and technical 
education, or CTE, by reauthorizing the Carl D. Perkins Career and 
Technical Education Act. We are also exploring opportunities to 
strengthen our higher education system through the reauthorization of 
the Higher Education Act.
    One of our top priorities in both these endeavors is supporting 
innovation, whether by encouraging CTE schools to adopt technology that 
mirrors the tools used in the local workforce, or by championing 
policies that help students earn a postsecondary degree in less time, 
with less debt. In fact, Matt Salmon has introduced legislation known 
as the Advancing Competency Education Project of 2013 that lets 
colleges offer federal financial aid based on students' prior 
experience and knowledge instead of credit hours - allowing students to 
advance in a degree program faster without accumulating as much debt.
    As the committee continues to examine ways we can boost innovation 
and support a 21st century workforce, it's important we hear from 
students, educators, and state and local leaders about challenges and 
opportunities facing the workforce and education system. Your feedback 
helps inform and strengthen our work in Washington, and we are grateful 
for your input.
    Once again, I'd like to thank our witnesses for joining us today. 
We look forward to a productive discussion. I will now yield to Mr. 
Salmon for his opening remarks.
                                 ______
                                 
    Chairman Kline. We have two distinguished panels of 
witnesses today, and I would like to begin by very quickly for 
the record introducing the first panel. I think Mr. Salmon did 
an excellent job of providing the background for each of them.
    So let me just quickly say that in the first panel we have 
Mr. Rick Huemann. He currently serves as the vice mayor of the 
City of Chandler, Arizona, having begun his tenure on the city 
council in January 2009. Ms. Cathleen Barton serves as the 
education manager for Intel Corporate Affairs, Southwestern 
United States. Mr. Lee Lambert has served as chancellor of Pima 
Community College since July 2013. I hope that date is right. 
And Dr. William Pepicello has served as the president of the 
University of Phoenix since 2006.
    Before I recognize each of you to provide your testimony, 
let me just very quickly go over our lighting system again. 
This is the box that we have here. When I recognize you, you 
will have five minutes to give your testimony. There will be a 
green light that comes on. After four minutes, the light will 
turn yellow, and at the end of five minutes the light will turn 
red, and I would ask you to expeditiously wrap up your 
testimony if you have not done so. And after all four witnesses 
have completed their testimony, we will, each of us, will be 
given five minutes to ask questions.
    Okay. I would like now to recognize Mr. Rick Heumann for 
five minutes.

 STATEMENT OF HON. RICK HEUMANN, VICE MAYOR, CITY OF CHANDLER, 
                       CHANDLER, ARIZONA

    Mr. Heumann. I am Chandler Vice Mayor, Rick Heumann. I want 
to thank you for the opportunity to provide testimony for 
today's hearing.
    Before I discuss the Chandler Education Coalition and its 
roots, I want to give a brief overview on the economic outlook 
of Chandler and the region. Chandler today is a dynamic 
economic generator that has branded itself as the innovation 
and technology hub of the southwest United States, and for good 
reason. We are a growing part of a global economy with a host 
of companies, like Intel, Orbital Sciences, Microchip, Infusion 
Soft, QBE, Bank of America, and General Motors' new innovation 
center. Each of these companies and many, many more have a 
significant presence in our city.
    The Price-Rudd Corridor is home to many of these firms and 
consistently makes the top list of hot economic corridors in 
the Arizona development community. The Greater Phoenix Metro 
Area also boasts a tremendous quality of life with mild 
weather, low cost of living, and amenities like golf, trails, 
and array of other outdoor pursuits.
    Chandler also has one of the most stable fiscal positions 
with AAA bond ratings from all three national agencies, one of 
just two cities in Arizona and just 31 cities nationwide to 
make that claim. Finally, Chandler enjoys the second lowest 
cost of service levels for Phoenix metro residents when taking 
into account property taxes, sales taxes, and utility costs.
    Chandler has generated several thousand new jobs in the 
past two years alone, and nearly 23,000 jobs from 2008 to 2013, 
some of our roughest economic years in this country's history. 
Many of the jobs being created in Chandler and the region fall 
into the category of STEM--science, technology, engineering, 
and mathematics. We are truly shifting to a knowledgeable 
economy.
    With that in mind, our city has partnered with Arizona 
State University, my alumni, and the University of Arizona. ASU 
recently opened the Chandler Innovation Center in the city's 
former public works yard in our downtown core. ASU is holding 
engineering classes there in unique partnership with local 
industry. This alliance also includes Tech Shop, a leader in 
the entrepreneurial maker movement.
    The U of A is holding classes in our downtown community 
center. These are master level teaching courses that also 
include collaboration with our business community through a 
very intense internship program. U of A also has lab space in 
our city's innovation incubator for the Center of Applied 
NanoBioscience and Medicine.
    Chandler Gilbert Community College partners with many of 
our local employers on specifically defined curriculum, like 
clean room operations for Intel. All these programs are turning 
out a very educated and prepared workforce.
    But how do we sustain the development of a well-rounded, 
qualified workforce? We must set our sights on developing 
educated workers literally from birth so they are suitably 
prepared to enter the classrooms ready to learn from day one. 
That is why in 2011, I created the Chandler Education 
Coalition. In this effort, I envisioned a collaborative systems 
building effort to support the quality of educational 
opportunity and school readiness in the City of Chandler.
    We invited members of the education community, K through 
12, community colleges, and our state universities. We have 
corporate leaders from several sectors of the economy, and we 
have a host of non-profit organizations at the table, as well. 
This committee, made up of more than 30 organizations, is 
committed to improving school readiness from cradle to 
kindergarten across the City of Chandler.
    The purpose of the Chandler Education Coalition is to 
create a collaborative support system of community stakeholders 
to ensure all Chandler children, birth through five, obtain the 
necessary literacy skills for school readiness. We recently 
partnered with Read On Arizona, a statewide public/private 
partnership of agencies, philanthropic organizations, and 
community stakeholders committed to creating effective 
continuing services. Read On Chandler, like its parent group, 
will work to improve language and literacy outcomes for 
Arizona's children in these very formative years.
    Another important component of this endeavor is our 
relationship with the Arizona SciTech Festival. Chandler has 
been a leader in partnering with the festival organizers at the 
local level. For the past three years, we have held the 
Chandler Science Spectacular. This three-day collaborative 
event brings awareness to the world of science and includes 
participation from several small businesses, high tech 
companies, schools, and non-profit agencies. It is very 
rewarding for me to see the enthusiasm and excitement from kids 
and parents alike, because when we allow our youth to 
experience science activities up close and personal, it 
provides them with a vision that anything is possible for the 
future.
    I am personally committed to finding and engaging new 
partners along the way. We envision our education pipeline that 
will offer the opportunity, tools, and resources to every child 
in our system achievement and success. We imagine companies 
understanding our purpose and their role in this process. And 
we predict unparalled success as a community from both an 
education and economic standpoint, a role model for the nation 
and for the world.
    With that, I look forward to your questions and comments. 
Thank you.
    [The statement of Mr. Heumann follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Chairman Kline. Thank you.
    Ms. Barton, you are recognized for five minutes.

    STATEMENT OF CATHLEEN BARTON, EDUCATION MANAGER, INTEL 
     CORPORATE AFFAIRS, SOUTHWESTERN UNITED STATES, INTEL 
                 CORPORATION, CHANDLER, ARIZONA

    Ms. Barton. Good morning, Chairman Kline, Representative 
Salmon, and members of the committee. Thank you for the 
opportunity to testify on the importance of business-higher 
education partnerships to create a robust workforce development 
network for our nation, for the state of Arizona, and for Intel 
Corporation. My name is Cathleen Barton, and I am the education 
manager for Intel in the Southwest U.S.
    At the core of our education programs and advocacy are our 
partners, and today I want to talk about three partnership 
areas: programs to develop the next generation of innovators, 
programs to hire the next generation of innovators, and 
advocacy and programs to support innovative education 
partnerships.
    Intel is the world's largest semi-conductor manufacturer 
and employs 105,000 employees worldwide. More than half of them 
are here in the U.S. And at a time when the call for a revival 
of U.S. manufacturing is the imperative for our nation, we are 
proud that three quarters of our manufacturing and research and 
development is here in the United States. A study by 
PriceWaterhouseCoopers estimates Intel's total impact on U.S. 
GDP at $408.5 billion from 2008 to 2012.
    Intel Chandler, where we manufacture our latest products, 
is one of our largest and most complex sites in the world. We 
invest $450 million in R&D each year with a 2.4 billion average 
economic impact in Arizona, 11,000 employees --over that--are 
in Arizona. Almost 800 are Ph.D.s, 2,200 have masters in 
science, and 770 MBAs. We understand the importance of higher 
education because they are the students we hire to design the 
technology of the future, conduct our research, and run our 
factories.
    Intel hires more students from ASU for openings across the 
U.S. than any other institution of higher education. Between 
2010 and 2012, we hired 836 students from ASU and 182 students 
from the University of Arizona and Northern Arizona University.
    Intel also partners with colleges and universities each 
year to hire approximately a thousand summer interns. A new 
Intel internship experience that was piloted with ASU and 
Chandler Gilbert Community College is now being evaluated for 
multi-company collaboration.
    Intel's veteran recruiting team partners with several 
university chapters of the Veterans of America organization in 
order to support our goal of hiring veteran STEM and MBA 
talent. This partnership includes both Arizona State University 
and the University of Arizona.
    Intel also partnered with ASU's College of Technology and 
Innovation, developing a flexible B.S. engineering program for 
some of our employees whose work schedules are not aligned with 
a traditional academic calendar. In addition, to support 
ongoing employee development, more than 1,100 employees 
utilized Intel's tuition assistance program in 2012, over 300 
of them in Arizona's public and private community colleges and 
universities.
    Partnering to keep our universities and their students up 
to date and competitive is not only good for the technology 
industry, but it is good for our local and national 
competitiveness. Two elements of these partnerships include 
curriculum development and access to new technology and tools. 
For example, we partnered with ASU to develop a curriculum to 
help students understand environmental and high volume 
manufacturing challenges for the industry.
    Regarding access to state-of-the-art technology and tools, 
Intel is providing 50,000 kits featuring the new Intel Quark 
technology to a thousand universities worldwide. This is our 
Galileo project, and it will enable students to become the new 
generation of entrepreneurs and inventors in rapidly growing 
areas, such as the Internet of Things and wearable computing.
    In addition to entrepreneurs and investors, Intel also 
invests in the teacher workforce through partnerships like 
Intel Math and Intel Teach, programs that help teachers become 
better prepared to teach Arizona's college and career ready 
standards. We invested in Intel Math, an intensive training 
course for K-8 teachers, and partner with the University of 
Arizona to implement it in Arizona and various other states.
    Other successful Intel Math partnerships in Arizona include 
the Arizona Department of Education, NAU, and the Arizona Board 
of Regents. Intel Teach partnerships with higher ed and state 
departments of education train teachers to develop students' 
critical thinking, problem solving, communication, and 
collaboration skills.
    Finally, I would like to mention Intel's participation in 
Governor Brewer's Arizona Ready Graduation Rate Task Force. 
This task force is a collaboration of the business and 
philanthropic community, early education, K-12, higher 
education partners, including the Maricopa Community College 
District. The task force is focused on expanding practices, 
programs, and policies that decrease the number of high school 
dropouts and increase graduation rates. Key areas of focus 
include scaling successful career and technical education 
programs, which are demonstrating high degrees of success.
    Another innovative approach being explored to accelerate 
high school education and training and postsecondary credit and 
degree attainment include elimination of college remediation 
and expanding early college and career high schools and other 
grade nine through 14 pathways models. These programs are 
delivering significant results in many cases with minority 
students, students who are critically important to a majority/
minority population like the state of Arizona.
    I want to thank you for the opportunity to provide 
testimony this morning, and I look forward to your questions.
    [The statement of Ms. Barton follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
           
    Chairman Kline. Thank you.
    Mr. Lambert, you are recognized.

    STATEMENT OF LEE D. LAMBERT, CHANCELLOR, PIMA COMMUNITY 
                    COLLEGE, TUCSON, ARIZONA

    Mr. Lambert. Chairman Kline, Representative Grijalva--
    Chairman Kline. Mr. Lambert, could you turn your mike on? 
Apparently they are saying it is not. There we go.
    Mr. Lambert. Do you want me to start over? Just keep going? 
Okay.
    Tucson, my home, is the sixth poorest of its size in the 
U.S. Increasing our competitiveness in an unforgiving economy 
is a top priority, but because of globalization and 
technological advances, we know we are up against firms from 
across the United States and around the world. The 
approximately $46 million investment that the Federal 
government makes in Pima allows us to achieve multiple goals, 
particularly improving student retention, engaging underserved 
communities, and meeting the needs of area business and 
industry.
    Recently, Pima was awarded two grants to help adult 
learners transition into the workforce. Each contains an 
element that requires us to engage the private sector. In 2010, 
Pima secured a 5-year grant to provide education and services 
to low-income individuals so that they could enter the fast-
growing healthcare sector. We aligned with our key partner, 
Pima County One Stop, which provides Workforce Investment Act-
funded services to nearly 4,000 job seekers. More than a 
thousand people have enrolled in our Health Professional 
Opportunity Grant Program to date, with 210 of these formerly 
jobless men and women finding employment in the healthcare 
industry, making on average just under $12 an hour.
    Similarly, the first three years of our participation in 
the Trade Adjustment Assistance Community College and Career 
Training Grant Program has been extremely successful. As part 
of a community college consortium in Arizona, Pima prepares 
students for skilled, high wage jobs in the energy sector. This 
program is geared to helping military veterans and other adult 
learners. Working in partnership with the local utility, in 
this case, Tucson Electric Power, we have developed an 
Electrical Utility Technology certificate, and will be adding 
an associate's degree concentration as well. Tucson Electric 
Power or its subsidiaries have hired 63 percent of the 50 
students taking part in the program. We are working with 
Southwest Gas Corporation to develop a similar program.
    Regarding student retention, many of our students are of 
extremely modest means, who often are the first in their family 
to attend college. We strive to keep tuition low, but the 
reality is these students cannot afford to attend college 
without Federal financial aid, including Pell grants.
    Regarding engaging underserved populations, I am proud to 
say that Pima's adult education program is the second largest 
here in the state of Arizona. Our adult education program 
serves up to 6,100 students a year. The high school 
equivalencies these women and men earn give them a chance to 
climb the economic ladder. Also, Pima is developing new 
contextualized learning initiatives that integrate adult basic 
education with occupational skills training so that these 
students are put on a fast track to postsecondary credentials.
    Pima Community College is committed to aligning its 
curriculum and services with the needs of industry to keep the 
talent pipeline filled with workers who have the skills 
business need now and into the future. Each of the college's 
more than 120 occupational programs is assisted by an advisory 
committee composed of representatives from local businesses who 
can provide us with real-time, ground-level insights regarding 
industry needs and emerging trends. These insights result in 
real change in our programs.
    An example of that is we are currently working with a 
consortium of more than three dozen manufacturers to alter our 
machine tool technology curriculum so it meets the National 
Institute for Metalworking Skills certifications.
    Again, I want to thank you for having me share what Pima is 
doing with the federal investments you have made in community 
colleges.
    [The statement of Mr. Lambert follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]    
    
    Chairman Kline. Thank you.
    Dr. Pepicello, you are recognized for five minutes.

STATEMENT OF WILLIAM PEPICELLO, Ph.D., PRESIDENT, UNIVERSITY OF 
                    PHOENIX, TEMPE, ARIZONA

    Dr. Pepicello. Chairman Kline, Representatives Salmon, 
Grijalva, and Rokita, I would like to thank you for the 
opportunity to testify on behalf of University of Phoenix and 
its parent company, the Apollo Education Group. I am honored to 
represent more than a million students, alumni, faculty, and 
employees.
    With more than 40 years within the academic community, I 
can state unequivocally that the opportunities and challenges 
facing higher education have never been more glaring than 
today. Major economic forces are forcing change within all of 
higher education, a constant global regeneration of new 
information, and access to knowledge is forcing us to embrace 
lifelong learning. Completing a degree program is just the 
beginning for working Americans today.
    The so-called traditional college student is no longer the 
majority of students. Nearly three-fourths of all 
undergraduates are considered non-traditional. The 18- to 24-
year-old undergraduate who enrolls full time after finishing 
high school is the exception rather than the rule.
    The nature of the workforce has dramatically changed as 
well. Competition for jobs at every level comes from all over 
the world. Accordingly, student expectations have changed 
dramatically. They expect us to offer a foundation that is rich 
in both academics and occupational skills, combined with an 
approach that is more pragmatic. Knowledge must be portable and 
cyclical at key intervals in career development.
    Today's adult learners do not enroll in higher education to 
discover who they are. They pursue education to connect to a 
desired career. They seek access to an economy that will need 
22 million new workers with postsecondary degrees by 2018. The 
traditional higher education model serves as the foundation for 
what is the greatest system in the world, but the longstanding 
process of educating only 10 to 20 percent of our nation at the 
college level and then relying on that small group to build our 
companies and create jobs is distant history.
    We commend the president for pushing for greater investment 
and achievement in higher education. Unfortunately, many of the 
policies focus on the traditional model as the primary means of 
this educational delivery. Relying solely on this model could 
hundreds of billions of dollars in public investment, a 
significant amount made all the more significant by the trend 
of declining investment from the public sector.
    Our founder, Dr. John Sperling, believed that the private 
sector had much to offer. In fact, many of the techniques first 
pioneered by University of Phoenix are now considered beset 
practice by the larger educational community. We believe that 
our 845,000 alumni are living proof of the important role in 
providing access to higher education for more Americans, and to 
help them develop the skills to achieve their professional 
goals.
    Employers want their employees to develop competencies 
throughout their education journey and to demonstrate the value 
in the marketplace before they graduate. Our programs are a 
direct response to those human capital needs. Our structure 
allows us to adapt quickly to the changing demands of our 
employer partners and our students. For example, we are 
increasing our use of full-time faculty for first-year courses, 
we are making improvements in our orientation programs for 
students, introducing more certificate programs, and expanding 
the use of adaptive learning. We invest millions each year in 
instructional and student advisory services. These investments 
provide a variety of pathways to support our students' career 
preparation, leveraging the latest technologies to provide 
education that connects more directly to graduates' 
employability.
    Our Stackable Credits Programs enable students to get a 
certificate and earn a certificate prior to completing their 
degree. Students are more likely to realize earlier returns on 
their investments in this way, and we expect that they will 
graduate at higher rates, too.
    All of this must be tied, however, to what students require 
as they evaluate their higher education options before they 
enroll. Students with career plans, financial plans, and 
support from employers are much more likely to succeed. Our 
Phoenix Career Services features a career guidance system to 
help prospective students make more informed decisions 
regarding their career path and their education opportunities. 
We are also helping prospective students understand tuition and 
fees for their entire degree program and to build a personal 
plan for how they will be able to pay for that education. Our 
adaptive learning technologies in math allow us to adjust to 
students' interactions and performance, anticipating what the 
types of content and resources they need will be as they 
progress.
    While we continue to pursue innovation, the regulatory 
framework that governs our higher education system is somewhat 
antiquated, burdensome, costly, and often prevents robust 
innovation. The deeply flawed gainful employment regulations 
are just one example. Substantial revisions and enhancements to 
existing statutory and regulatory framework must be made by 
Congress in order to effectively measure the return on 
taxpayers' investments. And any accountability structure should 
be applied to all postsecondary institutions and for the 
benefit of all students.
    In closing, there are many promising innovations taking 
route. Representative Salmon's bipartisan legislation on 
competency-based learning is an excellent example of the type 
of reforms that are needed as Congress moves forward to 
reauthorize the Higher Education Act of 1965.
    I want to thank you once again for this opportunity to have 
testified. Thank you.
    [The statement of Dr. Pepicello follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
            
    Chairman Kline. Thank you. Thank you all for excellent 
testimony, and we will move now to questions from the panel. I 
will start, and I will start with you, Dr. Pepicello, because 
you brought up the regulatory regime which is out there, and 
you mentioned gainful employment.
    As you know, and I know you know this very well, the 
Department of Education just a week or so ago released a 
revised gainful employment regulation. How does this compare 
with the last iteration, and what is the impact on the 
University of Phoenix?
    Dr. Pepicello. Well, the impact is probably not the major 
issue for us. We believe that the regulatory environment as it 
applies to higher education should be applied equitably and to 
all institutions of higher education.
    The issues that are addressed in this gainful employment 
proposal as well as the earlier one are not issues that are 
isolated within the for-profit higher education community. And, 
in fact, gainful employment would have some effect on some of 
the community college programs that are offered. So our concern 
is that the focus may be too narrow, and we need to see how the 
implications of gainful employment and similar regulations 
would play out in the broader higher education community.
    Mr. Lambert. May I add to that?
    Chairman Kline. Yes, you may.
    Mr. Lambert. I support the notion of having an 
accountability system for our nation's community colleges. I 
think it is important that we be able to say back to the 
public, to all the folks who invest in us, and the students 
what the return is going to be. I support making sure they get 
livable wage jobs.
    So in concept, I think it is a positive thing. Now, we need 
to look at the mechanics and what the actual impact is going to 
be. So I just want you to know that I am supportive of that, 
and also the AACC. We have developed a voluntary framework for 
accountability that we are really standing behind as an example 
of our commitment to that.
    Chairman Kline. Thank you. Ms. Barton, if I could, in your 
testimony, you talk about veterans' programs and recruiting. I 
would like you to take a minute and just kind of expand on 
that. What skills do veterans have already that you are looking 
at, and how do your programs help progress these skills towards 
the direction you want to go?
    Ms. Barton. So I would say that one of the most obvious 
skills are leadership skills. And so, when we are looking for 
veterans and looking to fill positions that require supervision 
of our employees, that would be an area where there is an 
abundance in skill.
    The other piece would be that in an environment such as 
Intel that is so technology heavy, if you will, the veterans 
who leave the military with technical education and experience 
is critical because we, in fact, can hire directly from the 
military without any additional postsecondary education in many 
cases when we are looking for people to help us run our 
manufacturing floor.
    And then, of course, we have ongoing training and 
development--as I mentioned, the program with Arizona CTI--to 
continue to develop those skills and capabilities whether it is 
technical, in engineering, or in management, like our MBA 
programs.
    Chairman Kline. Great. Thank you. Mr. Huemann, you talked 
about the Chandler Education Coalition, and I wrote down here I 
think you said there are over 30 or so members. Did I get that 
down right?
    Mr. Heumann. We have 30 different organizations that are 
involved, bringing their leaders to the table. So that 30 
multiplies down amongst their staffs and their groups.
    Chairman Kline. Well, what kind of decisions does this 
coalition make?
    Mr. Heumann. A couple of things we are working on. This 
early literacy program we are working on, we feel it is so 
important for kids to be able to read when they get to 
kindergarten. And some of our socioeconomic areas that are more 
challenged, it is a struggle. We have kids coming to school, in 
some cases, 70, 80 percent of them are not ready for 
kindergarten.
    So this program we are rolling out this fall, we will be 
able to go in and tackle getting kids to be able to read from 
birth to five. It is so important. We feel that the kids are 
not behind that way. You start out behind, and you have a 
challenging time through your whole schooling system, and it 
puts them behind all the way through school.
    Chairman Kline. So the members of this coalition, you get 
together and vote, or what is--
    Mr. Heumann. We get together and work collaboratively. It 
is a public/private partnership. Intel is at the table with us. 
Many business organizations--our non-profits, our school 
districts, our private schools, as well, are part of this--to 
work together in a collaborative kind of effort. And we do vote 
on certain issues based on the topic.
    Chairman Kline. Okay. Thank you. Mr. Grijalva, you are 
recognized. The microphones are--
    [Laughter.]
    Mr. Grijalva. Mr. Lambert, Doctor, you mentioned the role 
of community colleges. In my opening statement, I talked about 
adult-based education, and that, what is it, 16, 17 percent of 
the 16 and above residents of our fine state are not graduating 
from high school. And the 18,000 people that are served in 
adult basic education kind of breaks out to heavy remediation, 
literacy, high school equivalency, and then postsecondary work 
as well.
    A lot is said about students having to come in and do all 
this remediation before they can do something else. Adult basic 
education, like it or not, provides that safety net for a lot 
of students.
    Respond as to how you have integrated that into the 
college. You have one of the largest, if not the largest, adult 
basic education programs in the state, and how you see that as 
part of this workplace model.
    Mr. Lambert. So thank you, Representative Grijalva, for the 
question. So looking at the fact that 78 million baby boomers 
are going to retire, every single individual we have in our 
society who is eligible to work, we need to bring them in and 
train them properly. So we cannot afford to not keep a focus on 
training and preparing our adult learners who have not reached 
that GED and beyond place. So I think that is very critical, 
first step.
    I think second step, is we have integrated our adult 
education program better into the fabric of our academic career 
programs. So the first step is to bring them closer into what 
we are going to start calling--I am losing the train of thought 
here. We are going to integrate the learning into a 
contextualized environment so that when the student comes in, 
if she or he wants to be an aviation technology mechanic, that 
is what you are, and we are creating an on-ramp through an IBES 
type program that gets you there. And adult education feeds 
through that funnel, if you will, to that pathway. So that is 
an example, I think, of getting to a better success for those 
students. And as you know, Pima Community College is delivering 
one of the finest adult basic education programs in the 
country.
    Mr. Grijalva. The point, and you made it, is it is not just 
intervention. There is a follow up.
    Mr. Lambert. There has got to be a pathway. There has got 
to be a pathway.
    Mr. Grijalva. Ms. Barton, I mentioned also what I see as 
essential down the road, a lot of lip service to the concept, 
but not context to it, and that is that whole private/public 
collaboration toward identifying what workforce needs are going 
to be and aligning the education. Legislatively, how do we make 
that not an option, but more of a reality?
    Ms. Barton. I am not sure that you need to legislate that, 
and I think that perhaps today more than ever before, the 
business and education partnerships are much more evident, 
certainly here in the state of Arizona. Both in the policy 
arena, how we have had tremendous collaboration in that area, 
but also in the program area. So I am not sure that is 
legislative.
    I think there is a natural desire between business and 
education. We see that this is about innovation, economic 
development, and personal prosperity.
    Mr. Grijalva. I agree with you. I think the involvement of 
the business community is essential. I was disappointed when we 
had a proposition initiative to raise the amount of funding for 
school children in our public schools--I believe we are 49th in 
the country--that there was active opposition on the part of 
the business community to that initiative, including 
billionaires from outside the state that funded the effort to 
undo that.
    I say that because there is also a resource question. 
Sometimes education is idea rich and resource poor. We all have 
great ideas, but we can never implement them because you need 
something. But it is more of a commentary than a question.
    Doctor, with regards to the for-profit, you know, for-
profit colleges educate 13 percent of the students in this 
nation, utilizing about 25 percent plus of all the federal aid, 
whether it is Pell, secured loans, et cetera, and are 
responsible for about half of the defaults in terms of the 
loans.
    I mention that because that was the genesis to begin this 
gainful employment rule. And I agree with you, there are some 
problems with that rule. I think it is too soft on the career 
requirements in terms of what gainful employment is, and I 
think it is too hard on other programs that are low cost in 
which there is no real borrowing going on in the for-profit 
sector.
    I mention that because one of the gainful employment 
programs that the Department of Education looked at, 72 percent 
of the people leaving that program had a debt. And if they did 
enough work, they ended up making less than a person that had 
dropped out of high school. I do not think that is the income 
of a good career education.
    Chairman Kline. The gentleman's time has expired.
    Mr. Grijalva. [Off audio.]
    Chairman Kline. I know you were.
    [Laughter.]
    Chairman Kline. Mr. Salmon, you are recognized.
    Mr. Salmon. Thank you, Mr. Chairman. Before I ask a 
question, I would like to actually recognize somebody that is 
here that has been a tireless advocate of education across the 
spectrum in Arizona, and somebody I deeply admire, Dr. Carolyn 
Warner. Please recognize her.
    [Applause.]
    Mr. Salmon. Thanks for being here. My first question is for 
you, Ms. Barton. And it is regarding the strong encouragement 
from the technology industry to increase the number of H1B 
visas in the country, which I do support. I think we have got 
to meet the demands and be competitive on a global market, so I 
think it is a good request. But it is a Band-Aid for a deeper 
problem, and that is that we are not producing the kinds of 
people that could be employed in the high tech realm where 
those needs are. What do we need to do to fix that?
    Ms. Barton. Thank you for the question and the opportunity. 
First of all, I think it is a both/and solution. I do not think 
that we are ever going to not want to hire the best and 
brightest from around the world.
    Mr. Salmon. Of course.
    Ms. Barton. So thank you for continuing to work on that for 
us. I think the other piece is the increased focus on the 
college and career ready standards which ensure that all kids 
will graduate high school with the broadest range of choices 
and be able to pursue areas in the technology areas, like STEM.
    I was just talking with someone yesterday at a tribal 
leaders' conference on education. And she said to me, I was 
with eight students who had made it from tribal communities to 
Arizona State University, and seven of them said they were not 
prepared. The school prepared them to get there, but not 
prepared to succeed. So I think the preparation in K-12 is 
critically important.
    And then I think there are some incredibly innovative 
programs in STEM education which get at something that really 
is important to students, and that is they want to do something 
that matters and makes a difference. So getting at programs 
like the engineering projects and community service that we do 
with Arizona State University and the University of Arizona 
gives kids a chance to apply engineering principles, solve real 
world problems that are identified by community-based 
organization. So it is kind of STEM social innovation, social 
entrepreneurship, and transformation.
    Mr. Salmon. I saw a statistic that frightened me, and 
hopefully one of you will correct me if it is inaccurate. But 
any comments from anybody on the panel that internationally we 
rank 24th in the number of baccalaureate degrees in STEM. And 
as the only world super power, that is not acceptable. Any 
thoughts on that? Anybody on the panel?
    Dr. Pepicello. Well, I think it goes beyond that, 
Representative Salmon. It is not just our production of STEM 
degrees, but it is making sure that those degrees are in areas 
where they are needed. One the things that goes to the 
partnerships that the University of Phoenix has been very 
active in is going to employers.
    We have 2,500 partners nationwide, and the way we are 
developing our curriculum, including forays into STEM, is to go 
to the employers and ask them how it can be that there are so 
many job openings in the country and we still have 
unemployment. And they told us, as you just said, that we are 
not producing what it is that employers are looking for. So we 
are working hand in hand, not taking education to careers, but 
working it backwards, starting with the careers and building 
our education programs based on that.
    Mr. Lambert. I think it is also important, Representative 
Salmon, that we not lose perspective, that STEM is not just at 
the baccalaureate level, but it is at the sub-baccalaureate 
level.
    Mr. Salmon. Great point.
    Mr. Lambert. And as the Brookings Institute report 
revealed, that almost half of that is at the sub-baccalaureate 
level where our nation's community colleges fill that spot.
    With that said, I think we have got to do a better job of 
getting our young folks to understand that these are important 
pathways. And they have to start to be engaged at probably late 
elementary into middle school. And I do not think we are doing 
enough at that level to create that interest and see that these 
are great opportunities, not only at the baccalaureate level, 
but at the sub-baccalaureate level.
    Mr. Salmon. Thank you. Dr. Pepicello, my esteemed colleague 
made some comments about the proposed rule last week, and I 
just thought you might want to respond.
    Dr. Pepicello. Well, you know, I think that the basic 
issues here are those of transparency and accountability, and 
that if students understand when they come to an institution 
what the job possibilities are, what they can expect in ways of 
return on that investment, that students are by and large 
capable of making those kinds of judgments without having a 
regulatory imposition there. So I think it is both making 
students aware of what their responsibility will be if they go 
down a certain path, and then having institutions be not just 
transparent, but accountable for making sure that students have 
that information.
    Chairman Kline. The gentleman's time has expired.
    Mr. Salmon. Thank you.
    Chairman Kline. The gentleman's time has expired. Mr. 
Rokita?
    Mr. Rokita. I thank the chair, and good morning to the 
witnesses. Thank you for your testimony. I thank my friend, 
Matt Salmon, for organizing us today. I know Matt to be direct 
and honest, but, most importantly, he wears Arizona on his 
shirtsleeves. So I think he does a great job for the state.
    I also want to say that even though I am from Indiana, I 
happen to know and have a friendship with your governor back 
when we were both secretaries of state, and also your current 
secretary of state. I know Jan and Ken, like Matt, to be very 
honest, very direct. And without knowing or getting into the 
specific policy issues that you all have to deal with as 
Arizonans, I know that honesty and forthrightness is a rarity 
and a prize in our business sometimes. And I just think you are 
well represented in all those regards.
    I have been in Arizona a few days now, and it is certainly 
not my first trip. I like to think I am more than a tourist. 
Half my mother's family, in the 1950s, I believe, migrated to 
Arizona from Indiana. And I remember black and white super 
eight reels that my grandfather's brother showed me, and 
because they are in black and white you would think he was 
filming the surface of the moon until Camelback Mountain came 
into the viewfinder. So I also feel like I have grown up a lot 
with this area. Ever since 1974 we have been spending our 
Christmases here, so like many of you, I do not know snow at 
Christmas.
    And so, it is just with a great deal of pride that I spent 
the last 2 days at tribal communities learning a lot about the 
educational challenges and some of the breakthroughs, and what 
self-determination and what ``hand up'' versus ``hand out'' can 
do for communities. I spent some time at Great Hearts, a public 
charter school management organization, and learned a lot about 
what they are doing, similar to what we are doing in Indiana.
    I went to the Scottsdale Airport where a lot of aviation 
leaders got together. And aside from literally begging me to 
help get the federal government's boot off the neck of that 
industry, they were telling me how much they needed air frame 
and power plant mechanics, how much they needed aviators. Then 
I went to the Rodel Foundation where I visited with your former 
CEO and many other community and philanthropic leaders, Ms. 
Barton, to learn what they are doing and how they are taking 
the bull by the horns, not waiting for any government program 
or anything else.
    And by the way, this does not just happen in Arizona. I 
think for the first time in perhaps American history, I am 
seeing more private individuals of all political stripes--
Republican, Democrat, liberal, conservative--come together to 
tackle this education issue that you so eloquently described 
today. So thank you for your leadership as well.
    In that regard, one thing that continues to percolate as I 
have these meetings and hear your testimony, in the back of my 
mind is still if we are going to be a free society, if we are 
going to enjoy what I believe to be a unique American 
exceptionalism, and if we are going to continue to be a nation 
of self-governance, I need, we need, engaged citizens. We do 
not need automatons.
    And so, talk to me about what, even though you are going 
to, for example, Dr. Pepicello, take the career and back up 
from that, how you are going to give me an engaged citizenry 
through what would be one career-oriented instruction when we 
also know that the career that is needed or that the education 
for a career that is needed today might very well change, and 
probably will very well change, next year. And how do I have 
people that have learned how to learn so that they can 
transition easier?
    Ms. Barton, you first.
    Ms. Barton. Thank you, Mr. Rokita. I think that the college 
and career ready standards that teach students critical 
thinking, problem solving, communication, and collaboration 
skills, as well as a deeper understanding in math and English 
language arts, is part of ensuring that we are teaching 
children how to learn.
    Mr. Rokita. So you need a commitment to that as well at 
Intel. You need someone ready to do that.
    Ms. Barton. We are doing that, and we are a very strong 
advocate of that. I think there is another really important 
piece, though, and that is in that kind of education that is 
very student centered, there is an opportunity starting at 
kindergarten all the way through university and everywhere in 
between to make sure that we have got students engaged in 
problem solving and projects that matter to their communities 
and they see the real world application of their education.
    It also starts to develop them and have them see themselves 
as having a place in their communities, and this is important 
in the leadership piece as well.
    Mr. Rokita. Thank you. And that is not just found in the 
military. Mr. Pepicello?
    Chairman Kline. The gentleman's time has expired. Actually 
I know this trick very well. You talk up until there are two 
seconds left.
    We are not going to have another round of questions for 
this panel because we have another panel coming. So I want to 
thank the witnesses for excellent testimony, and engagement, 
and the questions and answers. I appreciate it very much. You 
all can stand down if you will, and we will bring the next 
panel up.
    I see the second panel is now seated. It is now my pleasure 
to introduce our distinguished second panel of witnesses.
    Dr. Michael Crow has served as the president of Arizona 
State University since 2002. Is there going to be sort of a war 
or something going here? I am not sure.
    [Laughter.]
    Chairman Kline. During his tenure at ASU, he has 
established major trends, disciplinary research initiatives, 
and witnessed an unprecedented academic infrastructure 
expansion, tripled research expenditures, and attainment of 
record levels of diversity.
    Dr. Ann Weaver Hart is currently serving in her second year 
as president of the University of Arizona. During her first at 
the UA, Dr. Hart successfully led a process to create an 
integrated strategic plan for the university's academic and 
financial future.
    Dr. Ernest Lara has served as the president of Estrella 
Mountain Community College since 2007. He has previously held 
faculty and leadership positions at ASU and three of the 
Maricopa Community Colleges.
    And Dr. Christy Farley serves as the vice president of 
government affairs and business partnerships at Northern 
Arizona University. Prior to joining NAU in 2004, Ms. Farley 
served as executive director of the Arizona State Board of 
Education.
    I think you have all been in here at some point previously, 
but just a reminder, this little box here is controlling our 
lives for a while. When you start your testimony, the light 
will turn green. After four minutes, it will turn yellow, and 
after five minutes it will turn red, and I would ask you please 
to wrap up your testimony. Then as you saw, when we ask 
questions, we stay mostly within that five-minute window as 
well so that everybody has a chance to ask questions and we can 
get everybody involved.
    So we are ready to go. I would now like to recognize Dr. 
Crow for five minutes.

  STATEMENT OF MICHAEL CROW, PH.D., PRESIDENT, ARIZONA STATE 
                   UNIVERSITY, TEMPE, ARIZONA

    Dr. Crow. Mr. Chairman and Representative Salmon, members 
of the committee, it really is an honor to be here this morning 
and have an opportunity to give you a few minutes of our 
thinking about your objective, which is reviving our economy 
for the 21st century workforce. The name of your committee 
captures the central crux of the matter, which is the 
correlation between education and the workforce, something 
which has often been overlooked or set as a secondary 
objective, I think, for many universities.
    And so, looking at our university, Arizona State 
University, here in metropolitan Phoenix, we asked the 
question, ``How can we connect to business to address their 
workforce needs?'' And the most fundamental thing that we have 
focused on is actually reconceptualizing the purpose of the 
university itself away from an isolated ivory tower-laden 
institution to a frontline institution. The movement of the 
university to the frontline is both a conceptual and a 
practical exercise that we have been involved with heavily over 
the last 12 years. It focused on resetting the vision of the 
institution.
    One part of that vision for our institution is taking 
responsibility for the outcome of the social, economic, 
educational, health, and well-being outcomes of our community. 
Many universities do not take that on as a responsibility. We 
do. For us, that has also meant setting new aspirations, design 
aspirations, for our institution, focusing on use-inspired 
scholarship, focusing on the university as an entrepreneur, 
valuing place; that is, embedding ourselves deeply into the 
local innovation ecosystem, into the local economic ecosystem, 
if you will, in ways in which it has altered everything that we 
do.
    For us, this has meant working in new ways on every level. 
It means embedding entrepreneurship as a curricular element 
into all of our colleges, not just our business and engineering 
college. It has meant for us the establishment of a unit 
focused on what we call economic affairs, which is working hand 
in glove with both companies that we are attempting to retain 
in Arizona and in the United States and companies that we are 
attempting to grow and nurture, and companies that we are 
attempting to recruit. And so, these are new ways for us 
interact, new ways for us to engage.
    We have also become engaged in the development of a new 
concept called i-projects where local companies--some of them 
you heard about from the City of Chandler this morning and 
elsewhere in metropolitan Phoenix and around Arizona and around 
the United States--come to us with their problem or their 
project. Students and faculty work together on this project or 
this problem. Then the company is able to watch these students 
engage in this project, and often then employs these students 
after their opportunity to solve the specific problem.
    A little side bar about that is that one of the things that 
we have realized is that the up and coming workforce--I am not 
a big believer in all of the negative things that people talk 
about. I tend to focus on the unbelievable positive momentum 
this country has, the unbelievable potential that our young 
people have. And the one thing that we have realized in the 
design of our university is that we have kept it too walled, 
too separate, too disengaged.
    So we have worked really hard to break those walls down so 
that companies and their problems are embedded in our 
pedagogical and educational activities so that the educational 
experience is leading directly to, in a sense, what we heard 
earlier from Representative Rokita, this notion of the 
individual that can be engaged in an educational experience 
where they can learn to learn anything, and also be prepared 
for the workforce. And so, for us it is taking on these two 
things together and restructuring our identity, restructuring 
how we work, how we are organized, how we teach our classes, 
how we instill entrepreneurial spirit into our students and so 
forth.
    Relative to the university as a partner, this is really 
where the breaking down of the walls around the ivory tower are 
most important. Intel, as an example, you heard earlier from 
Cathleen at Intel, how we are working with Intel, but it goes 
even deeper than that. We are a provider of human capital, 
knowledge capital, ideas, solutions, mechanisms for change, 
catalysts for change.
    And so, what we do is we work in sort of a comprehensive 
way, sitting with a company like Intel, and I can give you the 
list of dozens, if not scores, of other companies that we are 
working with in this way and saying, ``what is it that you need 
from us as a partner?'' You need individuals who are educated 
across three subjects, not just trained for a specific job. You 
need individuals who have capacity to operate on a global 
basis, the capacity to work in ways in which they are not just 
an engineer, but they are working on other kinds of complex 
problems at the same time, so we worked on that.
    To Representative Salmon's point on STEM education, let me 
just give you a context of how we have worked. In the last 10 
years, we have been able to double the number of graduates 
graduating from this institution from around 9,000 to almost 
19,000. We have been able to quadruple the level of research, 
and our faculty is the same size. We have been able to do that 
as a function of making that our objective. We have been able 
to do that as a function of breaking down the walls. We have 
been able to do that as a function of finding new ways to link 
with the economic success of this community.
    One part of that obviously is STEM, so when you read the 
national publications that no one is interested in STEM 
education, I do not know where they are visiting. They must be 
visiting somewhere other than Arizona. So we have seen a 
massive increase in STEM educational activities at our 
institution, more than double the number of majors. For our 
incoming freshman class, of the ten leading majors, seven are 
STEM majors.
    And so, we have seen unprecedented increases of minority 
students, young women going into the STEM education fields. 
This has come about as a result, however, not of just saying 
that we wish it was so. It has come about as a function of the 
fact that we put a mirror on ourselves, changed our identity, 
changed how we do things, and then changed everything along the 
way.
    And just very quickly, two things as recommendations for 
the committee to consider: one, find innovative institutions 
and find ways to rally around them. Everyone is trying to 
change the entire system. That will not work. Second, hold 
universities accountable for all of their products--private 
universities, public universities, for-profit universities, all 
of them--who they graduate, how they graduate, how they are 
employed, what their debt is, how they work in the economy. 
Hold everybody accountable. Everybody.
    [The statement of Dr. Crow follows:]
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    Chairman Kline. Thank you, Dr. Crow.
    Dr. Hart, you are recognized.

STATEMENT OF ANN WEAVER HART, Ph.D., PRESIDENT, THE UNIVERSITY 
                  OF ARIZONA, TUCSON, ARIZONA

    Dr. Hart. Got it. I appreciate it.
    Chairman Kline. A little cooperation here.
    Dr. Hart. A little cooperation between--
    Dr. Crow. We are not playing them in the tournament yet.
    Dr. Hart. It will be years, Michael. Years.
    [Laughter.]
    Dr. Crow. We are coming up from another bracket.
    Dr. Hart. Well, unlike Nick Johnson, my vertical jump is 
not 47 inches, but we are working at it at the University of 
Arizona.
    I am so honored to have the opportunity to speak with you 
this morning and talk with you about the role the University of 
Arizona plays in helping our state and our nation and our world 
to meet the challenges that we are facing.
    I also want to thank the committee for the work that you 
are doing with the reauthorization of the Higher Education Act. 
Congressman Salmon knows we appreciate your attention and 
thought. We have at the University of Arizona an internal task 
force that brings together those interested in the University's 
issues. Congressman Salmon, thank you for taking the time to 
meet with our task force and speaking with them about ways in 
which we can be good partners.
    Now, in our brief five minutes here today, I want to focus 
on just three key issues related to our shared interest in the 
role of higher education in advancing the well-being of our 
nation. And I am going to limit my remarks to those with the 
hope that we will have a chance to extend this dialogue over 
time in the years to come.
    The first is of great interest to all of us, and it is, in 
fact, STEM research and education. And as you have heard from 
my colleagues from other institutions, just being able to be 
successful with the students who are already interested in STEM 
makes a huge difference in the quality and numbers of young 
people who come out of those majors. As the public land grant 
research university and in the sense --a super land grant. We 
have a medical school, but, no, we have two medical schools.
    You can imagine how deeply engaged and involved we are in 
the pipeline of talent from the STEM disciplines and how 
invested we are in discoveries of high-tech and high-wage 
fields that are so important to the well-being of our state and 
nation. And these are also high-income and compensation skills.
    So in the STEM disciplines, the U of A has a tremendous 
contribution in medicine and healthcare, in space sciences and 
optical sciences in which we lead the world in many of those 
important issues, in land and arid environments and water 
studies, which are critical to two-thirds of the agricultural 
lands around the world, and a focus on defense and security. 
And our research enterprise, which is currently over 600 
million a year in external funding, is a huge economic driver 
in the state of Arizona. And overall, with the spinoff and 
amplifying effect, about $8.3 billion in the Arizona economy 
alone.
    Now, because of our high level of achievement in those high 
tech fields, we are not engaged or involved in remedial 
education, and rely for that --those fundamentals--very, very 
tightly in our partnerships with community colleges and with 
our other higher education institutions. We are a system of 
providers that together and working closely together have a big 
impact on a positive future.
    A second of the major initiatives at the University of 
Arizona that I want to highlight this morning is an initiative 
we call 100 percent engagement. As you know, the process of 
taking formally acquired learning from a laboratory or a 
classroom and applying it to new settings is a very, very 
difficult process to achieve. And we are committed at the 
University of Arizona to making sure that every one of our 
students has a carefully structured and formal experience, 
require them to do that, and to take what they are learning and 
apply it in many, many, many settings, a critical way in which 
we help to create opportunities for students to be more than a 
student. And as my colleagues have emphasized, a critical step 
in the effectiveness of higher education.
    Our students work with world class scientists and scholars, 
with partners from industry and business. Our UA students learn 
cutting-edge work in their fields. One example I would use is 
the University of Arizona-led OSIRIS-REx Mission, which will be 
bringing a soil sample back to Earth from a near-Earth 
asteroid, and which involves students directly from the 
undergraduate level in all the scientific disciplines, but also 
engineering, management, information science, public relations, 
and communication, where students are working directly in those 
important fields.
    And then finally, our partnerships with local industry, as 
you have heard, are very deep and extend into the high-tech 
fields that are so much a part of the University of Arizona's 
commitment to synergy in all aspects of our high-tech industry 
and the application of education to our future.
    [The statement of Dr. Hart follows:]
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    Chairman Kline. Thank you, Dr. Hart.
    Dr. Lara, you are recognized.

    STATEMENT OF ERNEST A. LARA, PH.D., PRESIDENT, ESTRELLA 
         MOUNTAIN COMMUNITY COLLEGE, AVONDALE, ARIZONA

    Dr. Lara. Chairman Kline, Representative Grijalva, 
Representative Salmon, Representative Rokita, thank you for the 
opportunity to testify before the committee today. I am Ernie 
Lara, president of Estrella Mountain Community College, and I 
appreciate the committee's interest in the vital role community 
colleges play in the economy through our workforce development.
    Estrella Mountain Community College offers transfer-ready 
academic courses and job-specific occupational training to the 
western metropolitan Phoenix population. Estrella Mountain is 
surrounded by six distinct municipalities. We make it our 
mission to determine the workforce needs of our community, our 
region, and our state.
    We are committed to the type of systemic, meaningful 
engagement and participation in the environment that provides 
insight into unmet needs, emerging industries, and new markets 
required for trained workers. Our faculty and staff are 
involved with local, regional, and national advisory boards and 
associations to keep abreast of emerging issues in industries.
    We are data driven. Routine environmental schemes identify 
needs and potential workforce opportunities. As one of the 10 
Maricopa Community Colleges, we benefit from our Office of 
Workforce Development, which leverages expertise in the greater 
Phoenix work base and ongoing research regarding issues and 
trends.
    Estrella Mountain is working to fulfill the needs of energy 
in the mining sectors as a lead partner in the Arizona Sun 
Corridor and Energy Consortium. Alignment to engineering 
programs provides a labor pipeline for our energy partners. 
Sequence certificates allow students to climb a career ladder 
directly into higher paying jobs, while gaining the necessary 
education.
    Credentials are earned at three different points in the 
program: basic training, industry fundamentals, and job 
specific. And they are stackable, supported by trade 
adjustment, assistance community college, and career training 
or TAC grant. Five colleges, including Chandler Geller 
Community College, are working with each other, workforce 
entities, and our industry partners to create best practices 
training programs that prepare workers for the jobs of today 
and tomorrow in the energy industry.
    Estrella Mountain is finalizing curriculum for certificates 
and a degree in cybersecurity information assurance, and is 
planning on offering these programs in the fall of 2014. We 
have begun the process to receive designation as a center for 
academic excellence for 2-year colleges. The new cybersecurity 
information assurance program is built on the foundations of 
the college's strong networking and information technology 
programs. Students will earn credentials in these fast-growing 
and high-demand fields.
    Transferring to a 4-year institution is an important part 
of preparing the workforce for a 21st century career. Estrella 
Mountain offers the Maricopa Pathways Program and provides 
students and their families time and cost-saving options in 
high demand degree programs with our nearest 4-year transfer 
partner, Arizona State University, ASU.
    Community college students who meet certain requirements 
are offered tuition incentives and guaranteed admissions into 
specified degree programs on transfer to ASU without loss of 
credit. Students will have earned an Arizona general education 
curriculum, an associate's degree, while at the community 
college. Students and their families save time and money.
    Pell grants are vital to the students at Estrella Mountain. 
Pell Grants often go further at a community college because 
costs are generally less and students have a lower income on 
average. If Pell or other federal aid programs were cut, over 
half of Estrella Mountain's degree/certificate seeking students 
would not have access to the funding they need to attend 
college.
    In closing, I would like to point out that Estrella 
Mountain, like Chandler Gilbert Community College, is one of 
the 10 Maricopa Community Colleges. Together, the Maricopa 
colleges are the largest provider of workforce training in the 
state. We generate an estimated $3 billion in annual direct and 
indirect economic benefit within our county through the 
increased skills learned at Maricopa, the increased output of 
businesses due to these skills, and through the higher earnings 
of our students. We know that two-thirds of all jobs available 
in Maricopa County will require the skills we teach, and we are 
training students in 95 percent of the highest demand 
occupations.
    Thank you for the opportunity to speak to you today. I will 
provide additional materials for your reference in the record 
with the Chairman's permission. Mr. Chairman, I yield.
    [The statement of Dr. Lara follows:]
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    Chairman Kline. Thank you very much. Thanks.
    Ms. Farley, you are recognized.

   STATEMENT OF CHRISTY FARLEY, VICE PRESIDENT OF GOVERNMENT 
AFFAIRS AND BUSINESS PARTNERSHIPS, NORTHERN ARIZONA UNIVERSITY, 
                        PHOENIX, ARIZONA

    Ms. Farley. Thank you, Mr. Chairman, and members. Thank you 
for having us here today, and we are glad to have you in 
Arizona. We appreciate the opportunity to talk about the 
success of Northern Arizona University. And you have heard the 
themes throughout the morning of change and collaboration. So 
those really are, as President Crow mentioned, integrated from 
the inside of our university out.
    And NAU's main campus in Flagstaff positively impacts the 
Arizona community in a number of ways. For northern Arizona, 
from the basic standing, we are the largest employer in that 
region. Our faculty and staff have made Flagstaff their home, 
and they are engaged in the community in a number of ways.
    Institutionally, we are a significant partner throughout 
the state, engaging enterprises that address community and 
statewide needs. From our High Country Conference Center in 
Flagstaff, which supports the nationally-recognized Hotel and 
Restaurant Management School at Northern Arizona University 
that was built in partnership with City of Flagstaff and a 
private hotelier, Drury Hotels, who was attracted to the area 
to be on our campus to support this project. That is one 
example of the combination of educational opportunities along 
with business opportunities and support for the community.
    In addition, we have the Keim lab that partners with TGen 
North. Al Keim has been nationally recognized as an expert in 
the field of biodefense agents, and we do a lot of infectious 
disease research. We have recently signed an understanding with 
the Flagstaff Medical Center to facilitate research on 
infectious diseases and population health in the northern 
Arizona community. And we are recognized as experts in land 
management and forest health, and support not only Arizona, but 
our tri-state group of Colorado, New Mexico, and northern 
Arizona on those areas.
    The universities can no longer afford to operate as silos 
who are simply responsible for imparting education. We are 
integrated in the communities in a number of ways. To explain 
the ways that we have adapted, I want to touch on two 
particular programs through Northern Arizona University.
    We are nationally-recognized for our statewide delivery 
methods throughout the state. In the old days, that used to 
mean flying faculty all over Arizona to work with the community 
colleges to impart bachelor's degrees and master's degrees. 
That model is very different today as we move from taking 
faculty to the site, through ITV, through online delivery. And 
I want to thank Congressman Salmon for advancing the discussion 
of competency-based education.
    Northern Arizona University is very proud to talk about our 
progressive model of competency-based education, and in the 
spring of 2013, we received approval from the accrediting body 
to move forward with this project. We then received permission 
from the U.S. Department of Education through the model of 
competency-based education and awarding credits for those 
competency demonstrations in order to begin providing financial 
aid for the students in that program.
    So it just began over the summer. We now have approximately 
122 students enrolled in this competency-based education 
program. And what it is a program geared towards adult learners 
where prior learning competencies are assessed and credits 
awarded. Faculty members from the specific fields of study 
contact students at least weekly to help guide their learning, 
and assessments are measured through rigorous testing, 
including writing-intensive projects and at least one 
presentation.
    As detailed in H.R. 3136, introduced by Congressman Salmon, 
direct measures of learning would include projects, papers, 
exams, presentations, or portfolios. These are all 
demonstrations of success that are looked for in the workforce, 
and we believe adequately assessed and measured by universities 
in order to establish direct assessment and learning. We 
support the pilot program.
    The cost for the personalized learning program at Northern 
Arizona University is $2,500 for 6 months' worth of education. 
So as has been outlined, individuals may enroll at any time. 
They take an assessment to ensure that they can manage those 
competencies of learning in this delivery method, and they can 
advance based on the skills that they come in with and their 
dedication to move through the programs. We currently offer 
three degrees: computer information technology, small business 
administration, and general liberal studies.
    To just briefly mention, we are a partner with the 
University of Arizona at the Phoenix Biomedical Campus to 
respond to the growing healthcare workforce needs in Arizona. 
Northern Arizona University has provided the only public 
physical therapy program in this state, and we have now added 
physician's assistant, and will add occupational therapy on 
that site in the fall of this year.
    So in order to address those workforce needs, we have met 
with the healthcare providers to see how best we can fit that 
niche in partnership with the College of Medicines existing in 
the state and to add to the need for nurses and other fields.
    Mr. Chairman, members, I know I am out of time. I am happy 
to answer questions.
    [The statement of Ms. Farley follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]     
    
    Chairman Kline. Thank you. Thanks to all the witnesses. As 
always, we are going to run out of time pretty quickly.
    Let me start the questioning with you, Ms. Farley. I do not 
know why I tend to go to the last person who spoke. But what 
you are talking about is innovation and how you provide the 
instruction to provide reason. And we are very interested in 
the competency-based model. It is incredible how hard it has 
been, how some schools have really had to struggle through the 
sort of government morass in order just to get the approval to 
start this.
    So my question to you is what can the federal government do 
to ensure that we are not standing in the way? And I am 
thinking of that from the administration's perspective, but 
also legislatively. What can we do to free that up?
    Ms. Farley. Well, Mr. Chairman, I think that it has been a 
struggle to be able to get to this point, not only through the 
regulatory side of the financial aid that is awarded, but 
through the accreditation process. I would like to think that 
we now have a very strong program, but it is still fitting--we 
have stretched the circle for the peg to fit in to be more of 
an oval to award credits in order to comply with financial aid. 
But as these programs evolve, we have to think differently 
about how students can be eligible for financial aid in order 
to adjust to the competency-based education.
    So awarding credits works in the short term, but it does 
slow the ability of us to add additional degrees quickly 
because we have to de-structure that education and pull apart 
the pieces to show how the competencies and the direct 
assessment match with the award of credit. So it is a time 
consuming process, which slows the entrance of degrees.
    I think that with adequate accountability measures, pilot 
programs certainly offer an opportunity for innovation to occur 
more quickly for us to gather data on that and then to provide 
demonstration of success. And I think that we will quickly be 
able to do that.
    Chairman Kline. So, Dr. Crow, you wanted to say something.
    Dr. Crow. Yeah. Just very quickly, one idea that comes to 
mind, and Dr. Lara mentioned it, we put in place these pathway 
programs which move from community college into the university 
as automatic admission and automatic moving forward.
    One thing that the committee might think about is 
encouraging the military, in particular, to have these exact 
same pathways. So in your case, helicopter pilot training, all 
the things that you went through, there was no automatic 
movement of those things you had done in the military that then 
would move you exactly into the university in a particular 
position.
    As far as I know, that has never been done on the level 
that it could be done. And so, one thing that the committee 
might do is encourage the military and the universities to 
build these automatic pathway programs, then to move into the 
corporate world where we do the same thing. So what Christy is 
talking about is it takes too much time to do it on a one-
person-by-one-person-by-one-person kind of basis. We need to 
make it systematic, and then there would be a way for this to 
occur.
    Chairman Kline. I am thinking in terms of a Marine 
helicopter pilot, we can do just about anything. So it would be 
pretty easy to set that up.
    Dr. Crow. I am sure that we would do that.
    [Laughter.]
    Chairman Kline. Dr. Hart, picking up how this works here, 
but I was interested when you said you do not do remedial 
education. One of the things that we hear and I hear as I 
travel around the country is how many students show up for 
college, and they are just not ready. They simply are not 
ready. And so, they have to have remedial education. You have 
apparently got an arrangement with the community college. Could 
you take a minute and explain how that works, how that system 
works?
    Dr. Hart. Sure, I would be happy to. And as my colleagues 
on the panel here this morning have said, all of us are engaged 
in those innovative programs that provide a pathway.
    One of the worst things I think you can do to a young 
person is admit them to a university for which they are 
unprepared to succeed, help them borrow money and invest their 
time and energy, and then say farewell and watch them flunk 
out, with no degree and the debt that goes with that. And as 
you know, that is a downward spiral for a young person to get 
involved in.
    So like ASU, we have partnerships with our community 
colleges, including the 10 Maricopa Community Colleges, that 
involve, as you have heard, dual admission so that when 
students complete the program at the community college that 
brings them to a level of achievement, then they can make a 
smooth transition and be successful. And when they walk and 
receive that degree after those four years, nobody asks them 
how they spent their first two. A degree from the U of A is a 
degree from the U of A, and those are critically important.
    And my colleagues and I are very concerned about the number 
of high school graduates who do not even take a curriculum that 
allows them to be eligible to apply for admission to our 
institutions.
    Chairman Kline. Thank you. My time has expired. Mr. 
Grijalva?
    Mr. Grijalva. Ms. Farley, the accreditation for the 
competency-based education programs, and congratulations on 
that. The accreditation process is different from the other 
regulatory issues that you mentioned in terms of financial aid 
and how financial aid can be more flexible in order to adjust 
to this. Two different things?
    Ms. Farley. Congressman Grijalva, yes, they are two 
separate things. The accreditation of our academic programs is 
a process that we go through, and it affects the basic programs 
that we have on the Flagstaff campus. So that is a separate 
issue which we were able to navigate prior to being able to 
work out all of the issues related to financial aid.
    Mr. Grijalva. Thank you. The advisor for the subcommittee 
on our side of the aisle, Mr. Williams is an alumni of NAU and 
he didn't want me to say anything, but I thought I could--
    Ms. Farley. Congressman Grijalva, thank you. We had a nice 
chance to visit in advance, and we are happy to see our alumni 
in great positions.
    Mr. Grijalva. Well, you should have seen the--
    [Laughter.]
    Mr. Grijalva. Very easy. Dr. Hart, the financing of a 
public institution like University of Arizona, the 
corresponding reduction at the state level in terms of support 
for the university, how do you compensate for that reduction? 
And how does that impact the course offerings, the adjustments 
that are having to be made for the demands for a new workforce? 
How do you compensate for that?
    Dr. Hart. It is a very complex question, thank you, 
Congressman. I appreciate the opportunity to respond. As you 
know, our funding here provided by the state of Arizona for the 
public universities--the three of us, and our community 
colleges have other challenges as well--has been reduced by 
about 40 percent since 2008. And we have been able to gradually 
adjust to some of those cuts with increases in tuition, but we 
do not cover the difference. The delta is much larger than the 
2008 state funding would have provided.
    So we are doing a number of things at the University of 
Arizona, diversifying our revenue streams that support the key 
activities. And at the University of Arizona, that includes 
major high tech partners who work with us to provide a world 
class education, but also fill the needs of their workforce. I 
will use as an example we have one of the world's leading 
mining engineering programs. Dr. Mary Poulton is someone that I 
think some of you have already met. And we, in fact, are taking 
your congressional staffers to our mine. We are the only 
program in the country that has one. And we have a very, very 
tight partnership with the mineral extraction industry that 
leads us to be able to do more high tech world class things, 
but also provide a workforce that is 100 percent employed when 
they graduate at an average of about $80,000 a year. Those are 
huge partnerships.
    Then we have to cut our overhead. We are constantly in a 
position of doing more and better with less of our total 
revenue going to the business of running our institutions.
    Mr. Grijalva. Is there a tipping point? There's a tipping 
point, I assume?
    Dr. Hart. I think there would be a tipping point. If we 
reached the point where the balance of our ability to deliver 
the programs and the research that is so critical to the 
prosperity of our nation, and with so little support from the 
state, there will be a point where we will just have to say 
what is that relationship and how might we have to revise it.
    Mr. Grijalva. Dr. Crow, you described that scenario, the 
pathways. Thank you. You talked about the alignment that has to 
happen, with regard to the military as an example, you go down 
to the corporate world. What prevents the public institution 
from doing that now?
    Dr. Crow. Well, nothing prevents it. It is basically a 
lesson learned. It is something we should have been doing that 
we have not been doing. We have been now applying it in a new 
way. Part of it is the academic culture itself, which is where 
I started my comments. So in most academic cultures, the 
dealing with community colleges or the military or something is 
someone else's business.
    And so, now we realize it is not someone else's business, 
it is our business. And so, that has been the prevention up to 
this point has been ourselves. And can we do it? The answer is 
yes.
    Mr. Grijalva. Dr. Lara, we have ten seconds left. The 
chairman is strict about that. How many students in the 
pathways? And you mentioned savings. What are the savings?
    Dr. Lara. Right now we projected approximately 12,000 
students in the pathway programs that are moving to Arizona 
state universities. And we have also figured that it is about a 
60 percent savings if they complete the first two years with us 
and then transfer to Arizona State University.
    Chairman Kline. Thank you. Mr. Salmon?
    Mr. Salmon. Thank you. I am going to piggyback on a 
question that Mr. Grijalva had. The state of Arizona's 
Constitution says, and I am going to paraphrase, that higher 
education should be as close to free as possible. Given the 
fact that the funding levels at the state have so dramatically 
dropped in the last several years, how do you meet that 
obligation? And I am asking both you, Dr. Crow and Dr. Hart.
    And I have a second question I would like you to address, 
too. I am going to try to get it all in so I can cheat the 
system.
    [Laughter.]
    Chairman Kline. That is not going to happen.
    Mr. Salmon. The second question is, one of my top 
priorities is international trade, and especially for the 
Arizona economy. I think that would really bolster our economy. 
We have relied way too much on home building and good weather, 
and I think we have to diversify dramatically our economic 
development portfolio. And I would like to ask how the 
universities can help us to get more international trade in the 
state of Arizona.
    And then thirdly, and this would be more for you, Dr. Hart. 
My son just finished his fourth year of medical school, and one 
of my biggest concerns is residencies. We are woefully 
inadequate here in Arizona with the number of residency spots 
that we have. And we know that typically speaking, where a 
person does their residency, that is where they are going to 
stay. And I would like to know, I have co-sponsored a bill that 
would dramatically increase the number of residencies across 
the country, and I would like to hear your thoughts on that. 
So, Dr. Crow?
    Dr. Crow. Quickly on the first two questions, on the issue 
of the cost of instruction being as close to free as possible, 
obviously all of us are deeply committed to that. There is 
commitment and there is actually figuring out how to do it.
    In our particular case, it has focused on an unbelievable 
focus, unrelenting focus on innovation. So for instance, where 
we had been suffering relative to incoming students relative to 
math, it is not so much their lack of preparation. It is their 
lack of understanding the rigor they are about to encounter. It 
is the rigidity of the rigor with which we have presented it. 
So we have in that particular area, math alone, freshman math, 
now completely changed the way that we do everything through 
the introduction of adaptive learning systems.
    And so, we are introducing technology, reorganization of 
the university, restructuring of the institution, analytics, 
tools, everything you can possibly imagine. And we have 
continued to keep the university accessible in relative terms 
through those activities and a deep commitment to financial 
aid. We could spend more time on that at some point.
    To your second question, international trade, probably the 
three most important things that we can do to stimulate 
international trade, which is, as you know, a way to generate 
new capital in the United States rather than just recycling the 
capital that we have, are basically export-oriented startups. 
So ASU has received about $400 million in venture capital for 
export-oriented startup companies in the last few years in 
battery technology and materials technology and device 
technology. They are all export or export-oriented. Some of 
them, in fat, are export only.
    Working these new technologies invented in the United 
States, developed in the United States, sold first overseas, 
and then working our way back to American markets, that is one 
part of the strategy. The second part of the strategy is 
international students, international students, international 
students, with huge incentives for them, once, in a sense 
attracted from the best and brightest around the world, to stay 
in the United States and to apply their wares.
    And then I think finally relative to international trade is 
the university actually being involved, all the universities 
being involved, in the actual acquisition of foreign direct 
investment in the U.S. for trade back to other countries. And 
so, we are involved in a number of these missions and ventures. 
And so, that is the way that we are working.
    Just a small point. We run an office now in of all places, 
Congressman, Ho Chi Minh City in Vietnam in collaboration with 
the American government, the Vietnamese government, and 40 
companies, with our main partner being Intel, which help the 
businesses they have in the United States to be more 
successful. So you have to be able to operate on that kind of 
scale also.
    Dr. Hart. Thank you. I appreciate the question. I will just 
add to what my colleague has already said, that the question of 
as close to free as possible also is relative for different 
families. And while the Constitution does not recognize that, 
all of us have worked very, very hard to take maximum advantage 
of the Pell Grants, which are huge, but also large proportions 
of institutional aid.
    And in Arizona, that aid comes from our institutional 
budgets, and we are and continue to remain very, very committed 
to that. Our in-state students, in fact, pay a tiny proportion 
of the sticker price of tuition at the University of Arizona, 
and up to 50 percent of last year's entering class of freshmen 
who were in-state students paid no tuition at all.
    The challenges that presents for us is in balancing the 
world class institutions that we represent against trying to 
keep those costs down for the individual families as much as 
possible. And there are many policy initiatives that would be 
helpful to us in making that happen. So it is critically 
important, and we focus on it a lot. But we need partners in 
our federal government as represented by this committee, but 
also in our state leaders to see what those needs are.
    In regard to international trade, it is interesting that 
you would ask. Dean Joaquin Ruiz is leading a delegation right 
now represented by and including Mayor Stanton and others to 
Mexico City to advance and establish trade there. And we are 
deeply engaged, especially in our high tech and science fields, 
how that trade among our countries could be advanced.
    We personally have been invited by DP World in Dubai to be 
a partner with them, and our huge alumni base in the Arab Gulf 
states is working with us to make sure that we at the 
University of Arizona are represented in the future of the 
economies in that part of the world as well.
    Chairman Kline. The gentleman's time has expired.
    Dr. Hart. GME, we will get back to that.
    Chairman Kline. Yes, the residency question will have to 
wait for another day. Mr. Rokita?
    Mr. Rokita. That was a good trick, Matt. Residency in ten 
seconds.
    Dr. Hart. Residency in ten seconds? We not only have a 
lower number of graduate medical education slots per capita 
than other states, but the national policy is critical. In 
1996, Congress placed a cap on the number of Medicare-supported 
residencies. Our major population growth has been since then. 
And so, the support is unbalanced and deeper in parts of the 
country with a flat or declining population.
    Mr. Rokita. So you heard the federal government is broke. 
You heard we have $17 trillion in debt driven by 60 percent of 
our spend is in Medicare, social security, net interest for 
ourselves and other countries, and the smorgasbord of other 
welfare entitlement programs. So if the residencies are the 
priority and they are Medicare-funded right now, what is not a 
priority in Medicare? Where would you see the shift?
    Dr. Hart. Where funds would be taken from in order to 
invest--
    Mr. Rokita. Instead of printing the money.
    Dr. Hart. Well, you do not have print the money, but we 
need to be partners, and also encouraging the healthcare 
providers who sponsor some of our GME sites--
    Mr. Rokita. So public/private partnerships?
    Dr. Hart. So partnerships are huge.
    Mr. Rokita. Okay. Thank you.
    Dr. Hart. And our medical schools need to be involved with 
those providers.
    Mr. Rokita. Thank you. Dr. Crow, I want to get to your 
testimony. I appreciate that. You mentioned at the end of your 
testimony two points. The first one was--
    Dr. Crow. The first one of the points that I made?
    Mr. Rokita. Yeah, to reiterate, at the end of your 
testimony you said two take-aways. What was the first one 
again?
    Dr. Crow. The second one I know was about transparency. The 
first one was to focus on innovative institutions. That is, 
right now what happens in the policy making process, people 
tend to want to correct everything at one time. It is not 
possible. Find the innovators. Work with them. Move on.
    Mr. Rokita. So hold everyone accountable was your second 
point. You rattled off real quick. I just want to make sure we 
have it for the record some things to--
    Dr. Crow. Oh, three things. So it is about you are held 
accountable for graduation, you are held accountable for the 
performance of your graduates, and you are held accountable for 
the debt defaults of your graduates. And what I mean is that at 
some scale in some ways, everybody has to be accountable.
    Mr. Rokita. Right, right, right. So on this gainful 
employment regulation concept that you are familiar with--
    Dr. Crow. Yes.
    Mr. Rokita.--you say that should apply to you, too.
    Dr. Crow. I think everything should apply to everyone.
    Mr. Rokita. Great. Do you agree with that, Dr. Hart?
    Dr. Hart. Yes, and we are very proud of our outcomes.
    Mr. Rokita. Great. Thank you. Dr. Lara?
    Dr. Lara. Yes. We also agree that the gainful employment--
    Mr. Rokita. So not just the for-profits is what I am 
getting at.
    Dr. Lara. It applies to all of us.
    Mr. Rokita. Great. For the record, Ms. Farley agrees. Thank 
you very much.
    What percentage of your total--I am going to try to go real 
quick here. What percentage of your total spend in a budget 
every year is on teachers' salaries?
    Dr. Crow. You mean on the faculty itself?
    Mr. Rokita. Yes, as a percentage--
    Dr. Crow. My instructional costs within the institution are 
about half the institution's operating--
    Mr. Rokita. That is teachers' salaries. That is faculty 
salaries.
    Dr. Crow. Well, it is the faculty, the librarians, the 
instructional activity. The teachers, the instructors, the 
faculty members, we have about 3,000 faculty members. It would 
be about 75 percent of that half.
    Mr. Rokita. Okay. Doctor?
    Dr. Hart. About $700 million of our 7.18 billion is 
directly general fund unrestricted and goes to the education--
    Mr. Rokita. What percentage is that of your total spend?
    Dr. Hart. That is about 50.
    Mr. Rokita. Fifty? Doctor?
    Dr. Lara. Our percentage is very close. Ours is about 51 
percent.
    Mr. Rokita. Oh, so a pattern here. Ms. Farley?
    Ms. Farley. Yes, we would be in the same pool.
    Dr. Hart. Congressman, I would add that in our case, those 
other dollars are restricted and are often from the federal 
government and research grants. They are not dollars that are 
just spent on other things than supporting education.
    Mr. Rokita. Right, right. So my question goes to tenure, I 
guess. Is tenure past is prime?
    Dr. Crow. So tenure is basically an urban myth in the 
following sense. Tenure is not lifetime employment. Tenure is 
lifetime ability to pursue any idea you want to pursue without 
being interfered or crushed by--
    Mr. Rokita. So you are for tenure still. That is not a 
problem. Does it hinder competition?
    Dr. Crow. No. So we are for what we call tenure with 
responsibilities. So we dismiss tenured faculty members on a 
regular basis for their non-performance, including yesterday.
    Mr. Rokita. Thank you. Dr. Lara?
    Dr. Lara. I would agree. Tenure is something that is 
important, but also Maricopa Community Colleges has just 
instituted new policies on the way we evaluate faculty. So it 
is critical that they are performing.
    Mr. Rokita. So you are recognizing change is needed in the 
tenure process.
    Dr. Lara. Yes, I believe changes are needed.
    Mr. Rokita. Mr. Farley?
    Ms. Farley. Congressman, I would say that we have already 
integrated those changes into the tenure process to make sure 
that it is not a problem and making sure that we have quality 
tenures.
    Mr. Rokita. When was the last time you got rid of a tenured 
professor?
    Ms. Farley. Mr. Chairman, I would have to look at that 
because I do not do that academic side of the house.
    Mr. Rokita. Fair enough. Dr. Hart, I think you will have 
the last word.
    Dr. Hart. We have two faculty right now involved in the 
process. And the issue is that we need to make sure that we 
have post-tenure review and that we use our own policies to 
take action when faculty are not performing.
    Mr. Rokita. Yes. So this panel seems, Mr. Chairman, to have 
the courage to do that. I appreciate your leadership.
    Chairman Kline. The gentleman's time has expired. All time 
for questions has expired.
    We have got a couple of closing statements, and I am going 
to turn to Mr. Salmon first for any closing remarks that he 
might have.
    Mr. Salmon. I think that the panel or the members of the 
delegation up here, the members of the committee, I think have 
been given a rare treat, to be able to see in America how 
education leaders are pioneering new things, breaking outside 
of existing paradigms, and focusing on not just education 
outcomes, but employment outcomes.
    And I am really proud of the job that our universities are 
doing in the state of Arizona. I think they are second to none. 
I mean that from the bottom of my heart. I have had a chance to 
work very closely over the years with Dr. Crow, and to say I am 
one of his biggest fans would be the understatement of the 
world. I am really proud of the way you have shaken up the way 
of thinking here in Arizona about higher education. And I think 
it is becoming infectious across the land. I think it is a good 
thing.
    And, Dr. Hart, you know, what a breath of fresh air. 
Welcome to Arizona. We are so thrilled to have you and excited 
to work with you. I have known Christy for a lot of years and 
Dr. Lara. You guys, you exemplify everything that we want to 
see happening in education as we move forward. And it is just 
an honor to have you here.
    I asked for this field hearing because I knew that you 
would not disappoint, that you would show this panel and 
hopefully the rest of America that some really wonderful things 
in higher education are happening in Arizona. I am proud of my 
relationship with the University of Phoenix, too, who testified 
in the first panel. And they have tried some very, very 
innovative things that pioneered online programs that have been 
replicated successfully all throughout the country, actually 
the world.
    But, Mr. Chairman, thank you so much for bringing this 
committee to Arizona. I am proud of what we got here, as you 
can see, and I am just thrilled that you got a taste of what I 
have been seeing for a very long time. Thank you.
    Chairman Kline. I thank the gentleman. Mr. Grijalva?
    Mr. Grijalva. Thank you, Chairman, and I really appreciate 
the hearing. And it was a very good hearing and a very good 
dialogue as we proceed on the path to reauthorization of the 
Higher Education Act. In doing so, I think a lot has been 
learned. For one thing, I think the issue is accountability for 
that 140 billion investment that taxpayers make in our higher 
education and colleges across this country.
    And we hear during this reauthorization a lot about 
increased accountability, expanded accountability, new means to 
deal with the issue of accountability. And I think that 
exploration is worth undertaking, but it must, as you said, 
extend to all.
    And I thank the people who are here with us today. Congress 
would need to expand that gainful employment, that applies to 
career colleges right now, mostly community colleges and for-
profits, so we need to expand what that definition is in terms 
of information.
    I do not think it is wrong to ask for-profit colleges in 
this rule what is your placement rate and how do you define 
placement. Do you count short-term placements? Question. What 
percentage of students default on their federal loans? 
Question. Do any of your professional programs lack 
programmatic accreditation? Question. What percentage of your 
income comes from all types of federal aid, including military 
and veterans education? Question. I think that question is 
applicable to all, and everybody is accountable for that.
    I want to thank the institutions here today in Arizona 
facing the cuts that they faced at a state level, particularly 
the universities. They have been able to in many ways increase 
opportunity, the diversity of students, and careers, and 
degrees that are available now are more. And I think the 
discussion about the tipping point is a very valid discussion 
for the people of Arizona as to do they want to continue to 
expand this growth, or are we going to reach a point where we 
begin to shrink?
    I want to thank you again. I think that this hearing is 
important, Mr. Chairman, as you lead us down the discussion of 
the reauthorization of that and Carl Perkins. And I think that 
is an opportunity do some collaboration with the private sector 
to look at internships and to look at some other partnerships 
that we are not doing now.
    So with that, thank you so much. Appreciate your presence 
here. And to all the witnesses, thank you. I yield back.
    Chairman Kline. Thank you. I want to thank the witnesses 
for really great testimony, great discussion. As you could tell 
by the way we were going through this, we are looking at 
reauthorizing the Higher Education Act, and we want to, in that 
process we want to make sure that we are addressing some of the 
issues of accreditation that were raised here today, 
innovation, and making sure that colleges and universities, 
whether they are for-profit, not-for-profit, land grant, and so 
forth, have the ability to be responsive, and adaptive, and 
meet the needs as they see them developing. And it has been our 
observation that in some cases that has proven to be very hard 
to do because of federal law and regulation.
    So I thank the witnesses for shedding some light on that. 
And I must say that perhaps secondly to the fine colleges and 
universities in Minnesota, I have been very impressed with what 
I have seen here in Arizona.
    There no being no further business, the committee stands 
adjourned.
    Mr. Grijalva. Thank you, Mr. Chairman.
    [Additional Submissions by Mr. Lambert follow:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]     
       
    [Whereupon, at 1:56 p.m., the committee was adjourned.]

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