[Senate Hearing 113-819]
[From the U.S. Government Publishing Office]
S. Hrg. 113-819
ENSURING ACCESS TO HIGHER EDUCATION: SIMPLIFYING FEDERAL STUDENT AID
FOR TODAY'S COLLEGE STUDENT
=======================================================================
HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
ON
EXAMINING ENSURING ACCESS TO HIGHER EDUCATION, FOCUSING ON SIMPLIFYING
FEDERAL STUDENT AID FOR TODAY'S COLLEGE STUDENT
__________
NOVEMBER 14, 2013
__________
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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
TOM HARKIN, Iowa, Chairman
BARBARA A. MIKULSKI, Maryland LAMAR ALEXANDER, Tennessee
PATTY MURRAY, Washington MICHAEL B. ENZI, Wyoming
BERNARD SANDERS (I), Vermont RICHARD BURR, North Carolina
ROBERT P. CASEY, JR., Pennsylvania JOHNNY ISAKSON, Georgia
KAY R. HAGAN, North Carolina RAND PAUL, Kentucky
AL FRANKEN, Minnesota ORRIN G. HATCH, Utah
MICHAEL F. BENNET, Colorado PAT ROBERTS, Kansas
SHELDON WHITEHOUSE, Rhode Island LISA MURKOWSKI, Alaska
TAMMY BALDWIN, Wisconsin MARK KIRK, Illinois
CHRISTOPHER S. MURPHY, Connecticut TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts
Pamela J. Smith, Staff Director
Lauren McFerran, Deputy Staff Director and Chief Counsel
David P. Cleary, Republican Staff Director
(ii)
CONTENTS
__________
STATEMENTS
THURSDAY, NOVEMBER 14, 2013
Page
Committee Members
Harkin, Hon. Tom, Chairman, Committee on Health, Education,
Labor, and Pensions, opening statement......................... 1
Alexander, Hon. Lamar, a U.S. Senator from the State of
Tennessee, opening statement................................... 2
Murray, Hon. Patty, a U.S. Senator from the State of Washington.. 48
Bennet, Hon. Michael F., a U.S. Senator from the State of
Colorado....................................................... 50
Casey, Hon. Robert P., Jr., a U.S. Senator from the State of
Pennsylvania................................................... 52
Baldwin, Hon. Tammy, a U.S. Senator from the State of Wisconsin.. 54
Franken, Hon. Al, a U.S. Senator from the State of Minnesota..... 56
Witnesses
Long, Bridget Terry, Ph.D., Academic Dean and Xander Professor of
Education, Harvard Graduate School of Education, Cambridge, MA. 5
Prepared statement........................................... 7
Cook, Kim, Executive Director, National College Access Network,
Washington, DC................................................. 18
Prepared statement........................................... 19
Scott-Clayton, Judith, Ph.D., B.A., Assistant Professor of
Economics and Education, Columbia University, New York, NY..... 24
Prepared statement........................................... 26
Conklin, Kristin, Founding Partner, HCM Strategists, Washington,
DC............................................................. 35
Prepared statement........................................... 37
(iii)
ENSURING ACCESS TO HIGHER EDUCATION: SIMPLIFYING FEDERAL STUDENT AID
FOR TODAY'S COLLEGE STUDENT
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THURSDAY, NOVEMBER 14, 2013
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
The committee met, pursuant to notice, at 10:05 a.m. in
room SD-430, Dirksen Senate Office Building, Hon. Tom Harkin,
chairman of the committee, presiding.
Present: Senators Harkin, Alexander, Murray, Casey,
Franken, Bennet, Baldwin, and Murphy.
Opening Statement of Senator Harkin
The Chairman. The Committee on Health, Education, Labor,
and Pensions will please come to order.
Today's hearing is the third in our series examining
critical issues in postsecondary education as the committee
looks to reauthorize the Higher Education Act. The topic we'll
discuss today is of paramount importance and is arguably the
bedrock of Federal higher education policy, that is, our
Federal financial aid programs and their effectiveness in
providing access to higher education.
Since the passage of the National Defense Education Act in
1958--that was the year I started college, and I took advantage
of the Eisenhower program, as it was called then--the Federal
Government has played a role in helping students fund their
college education. Now, 55 years later, we can celebrate much
success, but we face significant new challenges.
A college degree, more so than ever, can be a ticket to the
middle class. But while college enrollment overall has
increased, the enrollment gap between low-income and high-
income students has grown.
I've cited these statistics in past hearings, but I want to
reiterate them again. Students from wealthy families are seven
times more likely to have earned a bachelor's degree by age 24
than those from low-income families. It is estimated that over
the past decade, 4.4 million college-qualified, low- and
moderate-income high school graduates did not attend 4-year
colleges, and an additional 2 million did not attend college at
all.
The reasons come down to affordability and access. Many of
the programs put in place through the Higher Education Act
aimed to provide the opportunity to attend college for all
Americans, regardless of background. But with statistics like
those I just cited, with so many of even our high achieving,
low-income students not attending college, we clearly need to
take a hard look at what's happening within our system.
Today we have the opportunity to discuss the state of
higher education access with a distinguished panel of experts.
We will take a holistic look at our Federal financial aid
programs, what's working, what's not, and what needs to be
done.
As we tackle reauthorization, I look forward to discussing
ways we can promote early awareness of our Federal financial
aid programs so that students know what's available to them
before they graduate from high school. We also need to examine
ways to simplify the aid process so that it's more clearly
understood by the students and families who use it.
Equally important is a discussion about the information
that students and families are receiving when they go through
the college entrance process. We spent considerable time in
previous reauthorizations ensuring that information is
available. Now we need to discuss how best to get that
information out to students and their families.
Simply put, our Federal financial aid programs are an
investment in our human infrastructure or human capital. We
need to do more to let all citizens know that we stand ready to
help them attain a college degree. Their economic mobility and
our economic future as a nation depends on it.
I look forward to working with our distinguished Ranking
Member, Senator Alexander, and my colleagues on both sides of
the aisle to ensure that our higher education system remains
affordable, accessible, and results-oriented, both for students
and taxpayers.
With that, I will turn to Senator Alexander for his opening
statement.
Opening Statement of Senator Alexander
Senator Alexander. Thanks, Mr. Chairman.
I arrived at the U.S. Senate full of enthusiasm about 11
years ago, thinking I had a little experience in education, and
my determination was to simplify the process for Federal aid
for students going to college. So I worked real hard on it. I
worked in a bipartisan way. We spent some time on it.
After a few years, we made some changes. And after a couple
more years, they actually got adopted. I was just talking to my
staff--I think the net effect was to eliminate about five
questions from the application form.
So, Mr. Chairman, I asked for a copy. This is the form that
you fill out for Federal student aid.
The Chairman. You need to be taller----
[Laughter.]
Senator Alexander. It's 10 pages. But this is the
simplified form, and then this is the 68-page instruction book
for filling it out. We have millions of parents and students
who do that.
Now, what can we do about that? We're very fortunate to
have these witnesses today, because they've done a lot of the
best thinking on it. And I want to thank Chairman Harkin for
this hearing and a series of hearings on this subject.
I think there's no ideological monopoly on the idea of
making Federal student aid, whatever the amount is, a
friendlier process for students. I mean, that's not a
Democratic idea. It's not a Republican idea. We would all like
to do it. And there are a lot of these. We have about $35
billion that we spend on Pell grants. We give more than $100
billion every year--taxpayers do--in loans to students to go to
college.
About half of our college students have a Federal grant or
a loan to help pay for college. So we're talking about 21
million students attending about 6,000 institutions, about half
of whom have to fill out that long form and read that
instruction book to get it done.
One of the witnesses who is here today has pointed out that
the Pell grant, which has a maximum award of $5,645, is worth
about the same thing at Harvard that it is at Nashville's Auto
Diesel College. In other words, almost all students who are
eligible for the Pell grant get the same amount of money.
Maybe there's a simpler way to do this. Maybe we don't need
10 pages and a 68-page instruction book. The Senator from
Colorado is here, and he and I and Senator Mikulski and Senator
Burr have talked to Senator Harkin about the idea of using this
higher education process to simplify the process or even to
deregulate, as long as we can meet whatever the objectives are
that we would agree that we need.
There's a lot of research in student aid, with the Pell
grant, that about all you need to know is income size and
family size. If that's all you need to know, then why are we
asking all these questions, and why do we have a 68-page
instruction book for students to go through.
I'm looking forward to hearing what the pros and cons are
of the various ideas that the witnesses have suggested to us.
They may have some reasonable proposals here that we ought to
adopt.
Mr. Chairman, I have mentioned before that we have
reauthorized the Higher Education Act eight times now. One of
the results of that is what I would call a lot of pages of
well-intentioned clutter. It's nobody's fault, really. It just
happens.
Even though we have ideological differences on this
committee--I would take Senator Warren's example, when she was
at the Consumer Bureau. I often disagree with Senator Warren,
and I oppose the Consumer Bureau. But her idea was good, which
was let's have a 1-page mortgage application, and I think
they're actually going to end up with a 3-page one, which will
be a great improvement over what was happening before.
Maybe Federal student aid is one area, Mr. Chairman, where
we could, in the reauthorization of the Higher Education Act,
just start from scratch. Take the best ideas here, stay away
from ideological differences, and see if we can get rid of the
well-intentioned clutter by just starting over. Maybe it's one
grant, one loan, one tax credit. Maybe it's not. But at least
start over, say what we mean to do, and do it.
I look forward to this, and I thank you for arranging this
hearing.
The Chairman. Thank you, Senator Alexander. I might say I
can't remember exactly, but I remember when I went to college
in 1958 and we had that Eisenhower program, that NDEA program,
I don't think we had 68 pages to fill out.
Senator Alexander. Well, it's 10 to fill out and 68 pages
to read.
The Chairman. I can't remember if we had to fill out
anything. I think we had to insert family income, maybe, or
something like that, and that was about it, I think, at that
time. And we went to a window at Iowa State in Beardshear Hall
to get this. I can't remember. But I would have remembered if I
had had to fill out 68 pages. I probably wouldn't have done it.
I would have probably done something else. I don't know what.
Well, thank you very much.
I thank all of our witnesses for being here. I'll briefly
introduce each of you before we move to your testimony.
We welcome our first witness, who is Dr. Bridget Terry
Long. Dr. Long is Academic Dean and Xander Professor of
Education at the Harvard Graduate School of Education and an
economist who specializes in the study of college student
access and choice and the factors that influence students'
postsecondary and labor market outcomes.
In 2010, Dr. Long was appointed by President Obama to serve
as a member of the National Board of Education Sciences, the
Advisory Panel of the Institute of Education Sciences at the
U.S. Department of Education, where she has served as board
chair since 2011.
Next is Ms. Kim Cook, executive director for the National
College Access Network. Ms. Cook has worked in the higher
education and college access field for her entire professional
career, including experience in undergraduate admissions and
financial aid and a succession of responsibilities at the
National College Access Network, including director of
Government Relations, assistant director and executive vice
president.
She serves on the college board's College Planning Advisory
Board, the U.S. Department of Education's National Training for
Counselors and Mentors Advisory Panel, and the National
Education Working Group on Foster Care and Education.
Next is Dr. Judith Scott-Clayton, an assistant professor of
economics and education at the Teachers College of Columbia
University. She is also a senior research associate at the
Community College Research Center and a faculty research fellow
of the National Bureau of Economic Research.
Her research on financial aid simplification, the impact of
merit-based scholarships, and the validity of remedial
placement exams has received national press coverage and has
contributed to ongoing debates regarding financial aid and
remediation policy.
Next we have Ms. Kristin Conklin, a founding partner of HCM
Strategists, a public policy and advocacy consulting firm
specializing in health and education. Since its founding in
2008, HCM has supported education-related clients, including
the Bill and Melinda Gates Foundation, the College Board, and
the Institute for Higher Education Policy.
Prior to this, she was a senior advisor to the
Undersecretary of the U.S. Department of Education during the
Bush administration--you're so young, that must be the second
Bush administration, not the first one--and program director of
the Washington Office of the National Center for Public Policy
and Higher Education.
Just reading through all of your backgrounds, you must all
know each other some way or another. You're all associated in
different ways. But welcome, and your testimonies will be made
a part of the record in their entirety.
We'll start with Dr. Long. I'll ask you to summarize in 5
minutes so we can get into an open discussion.
Welcome, Dr. Long, and please proceed.
STATEMENT OF BRIDGET TERRY LONG, Ph.D., ACADEMIC DEAN AND
XANDER PROFESSOR OF EDUCATION, HARVARD GRADUATE SCHOOL OF
EDUCATION, CAMBRIDGE, MA
Ms. Long. Thank you. Chairman Harkin, Senator Alexander,
and members of the committee, thank you for the opportunity to
appear before you today. My testimony aims to provide
information about the barriers to college access and
persistence, what we know from research about improving student
outcomes, and ways we might improve the Federal financial aid
system.
In terms of the State of higher education today, there are
persistent gaps in college access by family income and race
that remain even after decades of financial aid policy. While
there are many barriers to college access and success, most can
be grouped into three major categories.
The first is college affordability. Without financial aid,
the median family would have to pay nearly 30 percent of their
annual income to cover the total cost of a public 4-year
institution.
The second major barrier is academic preparation. Estimates
suggest that less than half of all students leave high school
ready to study college level material.
The complexity of the college enrollment process and the
financial aid application, as well as a lack of clear and
accurate information, is a third impediment. College attendance
is the culmination of a series of steps and benchmarks, and the
process is too complex and difficult for many families to
decipher and navigate.
So what can we do to improve college access and success?
Well, the evidence shows, first, financial aid matters greatly
for college access. Second, financial aid also matters and is
an important determinant for degree completion.
In my study of the Florida Student Access Grant, we found
that the financial aid had a positive impact on short-term,
medium-term, and long-term outcomes. An additional $1,300 in
grant eligibility increased the probability of completing a
bachelor's degree by 22 percent.
Third, all aid programs are not equally effective. And when
designing a program, information and simplicity are vitally
important. Seemingly small differences in sign-up procedures
have also been shown to matter for other social programs. And,
fourth, the financial aid application process can be a major
barrier for students, and information alone is not enough.
My research documents just how detrimental the aid process
can be. With several of my colleagues, we designed and
implemented an intervention to provide low- and moderate-income
families assistance with the FAFSA. The results suggest that
streamlining and providing assistance with the FAFSA, where
they were able to complete it, on average, in 8 minutes, had
substantial positive impacts on college attendance and
persistence. Among graduating high school seniors, there was
nearly a 30 percent increase in college attendance just by
giving them help with the form.
Three years after the intervention, we found that students
who attended college after receiving assistance were persisting
at higher levels and were attaining higher levels of education
than their counterparts. In other words, they were able to
succeed in college, even though the barrier of the FAFSA
process would have kept them out. These results suggest that
further streamlining of the aid application process could be an
effective and efficient way to improve college access.
While there have been many recent improvements to the
FAFSA, these efforts do not fully address the needs of students
and their families. The recent improvements still require
families to at least be aware of the form and the process.
Moreover, to benefit from the simplified form, you have to use
it online, meaning you have to have access to private,
preferably high-speed Internet access, which is still a problem
for many low-income families.
There are many opportunities to improve the system. First,
when designing aid programs, learn from the examples of
successful policies. The research suggests that we could
greatly improve the Pell grant just by simplifying the way that
students access it.
Second, the government should proactively disseminate clear
information to families early and often. Additional effort must
be taken to translate and circulate the information. One
specific idea would be to send students and their families
information about possible eligibility as early as elementary
school. This would be similar to the social security benefit
reports that workers used to receive.
A related idea would be to summarize the financial aid
eligibility in a table that just shows family income and family
size. Research shows that this would give us a fairly good
estimate of aid eligibility.
Third, we should use and enable multiple pathways for
families to be able to access the FAFSA form. I encourage
maintaining the paper FAFSA as a submission method, while also
enabling community-based organizations to submit batches of
completed FAFSAs directly to the Department of Education.
Fourth, we should minimize the burden on families when
completing the FAFSA. For instance, families should not be
required to supply information that is available elsewhere. To
some degree, this is the purpose of having IRS populate the
FAFSA online. However, another step forward would be to have
this match happen behind the scenes automatically. We should
also limit the number of interactions and logins needed to
complete the FAFSA. Every additional step we require means we
are losing families along the way.
And, finally, we need to improve how aid and college
information is reported. I recommend standardizing the aid
award letter so that students can clearly understand what
colleges and universities are offering them.
Thank you.
[The prepared statement of Ms. Long follows:]
Prepared Statement of Bridget Terry Long, Ph.D.
summary
Chairman Harkin, Senator Alexander, and members of the committee,
thank you for the opportunity to appear before you today. My testimony
aims to provide information about the current state of college access
and what more could be done to improve the system.
the state of college access and barriers to college enrollment and
success
There are major and persistent gaps in college access by
family income and race.
Rates of college completion also differ by family income
and race.
Most barriers to college access and success can be grouped
into three major categories:
Cost and affordability;
Academic preparation; and
Lack of information and the complexity of the college
admissions process and financial aid systems.
improving college access and success: what do we know from the
evidence?
(1) Financial Aid Matters for College Access.
(2) Financial Aid is also an Important Determinant of Degree
Completion.
(3) All Aid Programs are Not Equally Effective: When designing an
aid program, information and simplicity are important.
(4) The Financial Aid Application Process Can be a Major Barrier
for Students and Information Alone is not Enough.
the context today: what more could be done?
While there have been recent improvements to the FAFSA,
these efforts do not fully address the needs of many students, and
there is still significant room for improvement.
There is increasing evidence that college can be a high-
risk investment.
The college decision process is only becoming more
complicated.
The Need Analysis Calculation does not reflect accurately
the financial situations of many college students.
ways to improve the effectiveness of our financial aid system
(1) When Designing Aid Program, Learn from the Example of Effective
Policies.
(2) Proactively Disseminate Clear Information with Families Early
and Often.
(3) Use and Enable Multiple Pathways for Families to Complete the
Aid Application Process.
(4) Minimize the Burden on Families when Completing the FAFSA.
(5) Improve How Aid and College Information is Reported.
(6) Pilot an Expansion of the Work Study Program at Colleges
Serving Many Low-Income Students.
______
Chairman Harkin, Senator Alexander, and members of the committee,
thank you for the opportunity to appear before you today. As we
consider the state of access to higher education in the United States
and ways we might improve our Federal system, my testimony aims to
provide information about:
The current State of college access in the United States;
Barriers to College Access and Persistence;
What we know from research about improving college access
and success; and
What more could be done to improve the system.
Finally, I close with recommendations about how to improve the
Federal financial aid system.\1\
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\1\ Note: The views expressed are those of the author and should
not be attributed to Harvard University or the NBER.
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the state of college access today
There are major and persistent gaps in college access by
family income and race.
As shown in Figure 1, the percentage of high school completers
enrolled in college (either 2-year or 4-year) the October immediately
following high school completion continues to vary widely by family-
income level.\2\ By 2010, 82.2 percent of students from high-income
families attended college in comparison to only 52.3 percent of
students from low-income families. The gap between the high- and low-
income families has not gotten smaller during the last 35 years (29.7
percentage points in 1975 and 29.9 percentage points in 2010). Even
after controlling for academic achievement, low-income students have a
lower probability of enrollment than do more affluent students (Ellwood
& Kane, 2000). These patterns suggest that low-income students continue
to face greater barriers to college access than other students.
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\2\ Source: U.S. Department of Commerce, Census Bureau, Current
Population Survey (CPS), October Supplement, 1975-2010. Low income
refers to the bottom 20 percent of all family incomes, high income
refers to the top 20 percent, and middle income refers to the 60
percent in between. The low-income figures are a 3-year moving average
due to small sample size. For 1975 and 2010, a 2-year moving average is
used: data for 1975 reflect an average of 1975 and 1976, and data for
2010 reflect an average of 2009 and 2010. Includes high school
completers ages 16-24, who account for about 98 percent of all high
school completers in a given year.
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Similar gaps in enrollment by race are also evident. As shown in
Figure 2, although there is an upward enrollment trend for each of the
three groups from 1955 to 2010, White students attend college at much
higher rates than those for Black and Hispanic students.\3\ Focusing on
18- to 24-year-old high school completers attending degree-granting
institutions, the data suggest there may have been recent progress in
closing the gaps between Black and White students, but in the case of
Hispanic students, racial gaps have been widening. For example, in
1967, the gap between Black and White students was 13.9 percentage
points; in 2009, it was 7.3 points. Meanwhile for Hispanic students,
the gap with White students increased from 13.8 percentage points in
1972 to 17.5 points in 2009.
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\3\ Source: Digest of Education Statistics. (2010), Table 212. Data
Source: U.S. Department of Commerce, Census Bureau, Current Population
Survey (CPS), October, 1967 through 2009.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Rates of college completion also differ by family income
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and race.
There are also major gaps in baccalaureate attainment by
background. Only 36 percent of low-income students who were
academically qualified for college \4\ completed a bachelor's degree
within 8 years, while 81 percent of high-income students did so
(Adelman, 2006). Stark differences also exist by race. Graduation rates
at 4-year institutions among first-time, full-time, degree-seeking
undergraduates were highest for Asian/Pacific Islander students (65
percent) followed by White, non-Hispanic students (58 percent) for
cohorts entering in fall of 1998. Black and Hispanic students in this
cohort graduated at much lower rates (40 percent and 46 percent,
respectively) (Knapp, Kelly-Reid, & Whitmore, 2006).
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\4\ Students were judged to be ``college-qualified'' if they met
any of five criteria that would place them among the top 75 percent of
4-year college students for that criterion. The minimum values for
``qualified'' were: a class rank of the 46th percentile, an academic
GPA of 2.7, an SAT combined score of 820, an ACT composite score of 19,
or a NELS-88 test score of the 56th percentile (Berkner and Chavez
1997).
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the barriers to college access and success
Although there are many barriers to college access and success,
most can be grouped into three major categories.
The first set of major barriers relates to cost.
During this school year, the average total in-State tuition and
fees at public, 4-year colleges and universities is $8,893, with
average total charges amounting to $18,391 (College Board, 2013a).
Meanwhile, median family income in 2012 was $62,241, suggesting that,
without financial aid, the median family would have to pay nearly 30
percent of their annual income to cover the costs of a public, 4-year
college or university. Many families in the bottom 20 percent of the
income distribution make less than that amount all year with the mean
income of this group being only $15,534.\5\ Concerns about
affordability are even greater at private 4-year colleges and
universities, which charged an average list tuition price $30,094, or
$40,917 including room and board (College Board, 2006a). The current
situation is the result of skyrocketing prices during the last several
decades. Meanwhile, the median family income has not kept pace with
growing tuition costs. Such trends led the Federal Commission on the
Future of Higher Education, which was appointed by Secretary of
Education Margaret Spellings, to conclude, ``There is no issue that
worries the American public more about higher education than the
soaring cost of attending college'' (2006, p. 19).
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\5\ College Board (2013a). U.S. Census Bureau, Current Population
Survey, 2013 Annual Social and Economic Supplement, Table F-1, Table F-
3, Table F-5, and FINC-01; calculations by the authors.
A second major set of barriers to college enrollment and
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persistence is academic preparation.
Students are increasingly finishing high school with below grade-
level competency, and this has affected their ability to access and
succeed in higher education (Bettinger and Long, 2009; Bettinger,
Boatman, and Long, 2013). Greene and Foster (2003) estimate that only
32 percent of all students leave high school ready to study college-
level material. The proportion academically prepared for higher
education is even smaller among Black and Hispanic students (20 and 16
percent, respectively).\6\ There are also significant gaps in test
scores by race and income (Jencks and Phillips, 1998), which contribute
to access inequality. For example, students from families that made
$20,000 to $30,000 per year scored 474 on average on the math SAT,
while students from families making more than $100,000 had a mean score
of 564 (College Board, 2006b). Therefore, while academic preparation is
a problem for many students, it is a problem that especially affects
low-income students and students of color.
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\6\ Greene and Foster (2003) define being minimally ``college-
ready'' as: (i) graduating from high school, (ii) having taken 4 years
of English, 3 years of math, and 2 years of science, social science,
and foreign language, and (iii) demonstrating basic literacy skills by
scoring at least 265 on the reading NAEP.
The third major impediment for many students, particularly
those from low-income families, is the complexity of the college
admissions process and financial aid systems, as well as a lack of
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accurate information.
College attendance is the culmination of a series of steps and
benchmarks, and the process is too complex and difficult for many
families, especially low-income families, to decipher and navigate.
First, students must aspire to attend college or derive aspirations
from their parents, teachers, and/or mentors. Additionally, students
must prepare academically for college by taking the proper classes and
getting a sufficiently high grade point average, particularly if they
wish to attend selective schools. To gain entry into a 4-year college,
students must also register for a college admissions exam (i.e., the
SAT or ACT). Students must also fulfill the requirements for high
school graduation.
While there are numerous resources to help students understand and
improve their preparation for college, there are far fewer tools or
aids to help families navigate the college selection process. With
little help, consumers must sort through a complex menu of
postsecondary institutions that differ in terms of level, sector, and
focus as well as costs, admissions standards, and credentials and
majors offered. Then they must put this information in perspective with
their own personal situations and preferences. Families must also
discern differences in quality, or the likelihood that the school will
impart learning, support student success, and result in future
benefits. Such differences are hard to detect as measurements of
quality in higher education tend to rely more on the characteristics of
the entering student body rather than the value added by the
institution or the benefits realized by graduates. Difficulty sorting
colleges by characteristics and quality is coupled with complicated
pricing structures, in which the net price each student pays often
differs due to government and institutional financial aid.
Another part of the complexity problem is the financial aid system.
To determine eligibility, students and their families must fill out the
Free Application for Federal Student Aid (FAFSA). Not surprisingly,
students and their families are often confused and even deterred by the
form (ACSFA, 2005). An American Council on Education (ACE) study found
that 850,000 students who would have been eligible for Federal
financial aid did not complete the necessary forms to receive such aid
(King, 2004). Other research demonstrates that students, particularly
those from low-income backgrounds, have very little understanding of
college tuition levels, financial aid opportunities, and how to
navigate the admissions process (Kane and Avery, 2004; Horn, Chen, &
Chapman, 2003). In 2006, the Spellings Commission on the Future of
Higher Education acknowledged problems with the current aid process by
concluding that some students ``don't enter college because of
inadequate information and rising costs, combined with a confusing
financial aid system'' (2006, p. 7). Therefore, while cost and academic
preparation are important hurdles for students, the role of information
is also substantial in determining college access and persistence.
improving college access and success: what do we know from the
evidence?
(1) Financial Aid Matters for College Access
Researchers have consistently found that grants have positive
effects on college enrollment (Deming and Dynarski, 2010; Dynarski and
Scott-Clayton, 2013). For example, Kane (2003; 2004) found that two
State need-based aid programs, the Cal Grant and the D.C. Tuition
Assistance Grant, each had positive effects on college access for low-
income students. The former provides grants for students to attend 4-
year colleges in California, while the latter allowed D.C. residents to
pay in-State tuition rates at public universities across the country.
Dynarski (2000; 2004) found even larger effects (4 to 6 percentage-
point increases) among a set of State aid programs. As shown by these
studies and others (e.g., Long, 2007), grants can increase college
enrollment.
(2) Financial Aid is also an Important Determinant of Degree Completion
While financial aid can be an important policy lever for increasing
college enrollment, it also influences the likelihood of student
success and college degree completion. In my study of the Florida
Student Access Grant (FSAG), a need-based grant that gave low-income
students an additional $1,300 in support, we found financial aid to
have a positive impact on a host of short-, medium-, and long-term
college outcomes. The additional $1,300 in grant aid eligibility (in
2000 dollars) increased the probability of immediate enrollment at a
public, 4-year university by 3.2 percentage points while also
increasing the probability of staying continuously enrolled through the
spring semester of students' freshman year by 4.3 percentage points.
Most importantly, the additional $1,300 in aid eligibility increased
the probability of earning a bachelor's degree within 6 years by 4.6
percentage points, or 22 percent (Castleman and Long, 2013).
It is important to note that the FSAG was awarded on top of the
Pell grant--eligible students would have qualified for both the $1,300
FSAG and at least a $1,750 Pell grant. As such, our results relate to
current debates about whether increasing the size of current aid awards
would have large positive effects (as opposed to answering questions
about the effects of some aid versus no aid). Overall, our results
suggest that not only does need-based aid have a positive effect on
persistence and degree completion, but also that increasing the award
amounts of current aid programs could have beneficial, cost-effective
results.
In other research, Dynarski (2008) found that the introduction of
State merit-based scholarships in Arkansas and Georgia led to increases
in the share of the population in each State with college degrees
within 10 years of when the programs were introduced. Scott-Clayton
(2011) found that students who were just above the cutoff in the ACT
exam score that determined whether students were eligible for the West
Virginia PROMISE scholarship were 6.7 and 4.5 percentage points more
likely to earn a bachelor's degree within 4 or 5 years, respectively,
than students just below the eligibility threshold.
(3) All Aid Programs are Not Equally Effective: When designing an aid
program, information and simplicity are important
While the existence of aid programs was once thought to be enough
to enable the enrollment of low-income students, the visibility and
design of the program also matter a great deal. Research suggests that
aid programs are most successful when they are well-publicized and
relatively easy to understand and apply for (Dynarski, 2000 and 2002;
Cornwell, Mustard, and Sridhar, 2006). Seemingly small differences in
sign-up procedures and marketing have also been shown to matter for
other social programs (Currie, 2006, Beshears, et al., 2006, Hastings
and Weinstein 2008).
(4) The Financial Aid Application Process Can be a Major Barrier for
Students and Information Alone is not Enough
As noted above, lack of information and the complexity of the
financial aid application process are major barriers to college access.
While there have been calls to improve awareness and simplify the
policy for years, my research documents just how detrimental the aid
process can be on students and their families. In 2008 and 2009, using
a random assignment research design, my research team designed and
implemented an intervention to provide low- to moderate-income families
receiving tax preparation help free additional assistance in completing
and filing the FAFSA (Bettinger et al., 2012). The just-collected tax
information was used to pre-populate the FAFSA, and then individuals
were guided through remaining questions to complete the form in less
than 10 minutes (including completely the research consent form and
background survey). Families were also given an immediate estimate of
their eligibility for government aid as well as information about local
postsecondary options.
The results suggest that streamlining and providing assistance with
the FAFSA had a substantial positive impact on the likelihood of
submitting an aid application. The FAFSA treatment substantially
increased college financial aid applications, improved the timeliness
of aid application submission, increased the receipt of need-based
grant aid, and ultimately increased the likelihood of college
attendance and persistence.
Assistance with the FAFSA increased the likelihood of
submitting the aid application substantially.
FAFSA submissions increased 39 percent for seniors in
high school, from 40 percent for the control group to 56
percent for the treatment group.
Aid application submissions increased 186 percent,
from 14 percent to 40 percent, among independent students
(those age 24 and above or who were married, a parent, or a
veteran) who had never been to college before. This translates
to an almost tripling of the number of potential students who
submitted an aid application.
FAFSA submissions increased 58 percent for
independent students who had previously attended college, from
35 percent for the control group to 56 percent for the
treatment group. This suggests there are large numbers of
students in college who are foregoing financial aid they are
eligible to receive because they have not completed the FAFSA.
Compared to the control group, FAFSA's were filed
over 1 month earlier for high school seniors and almost 3
months earlier for independent students. This has implications
for the treatment group in terms of increased eligibility for
State and institutional financial aid programs.
Receiving assistance on the FAFSA significantly increased
college enrollment.
Among graduating high school seniors, there was a
substantial increase of 7 percentage points in college going
(34 percent compared to 27 percent among the group who did not
receive any FAFSA help or information).
Among older, independent individuals who had
completed high school or a GED but not attended college
previously, the number enrolled in college and receiving
financial aid increased by about 2 percentage points. Given
that only 10 percent of the control group did this, the program
effect represents a 20 percent increase.
The effect seems to be concentrated among those with
incomes less than $22,000. This corresponds to the point at
which individuals are not expected to contribute anything to
college expenses (i.e., they have EFCs of zero).
The program also increased the percentage who
received a Federal student grant.
These results suggest that streamlining the aid application process
could be an effective and efficient way to improve college access for
low-income students. The effects of the FAFSA treatment are large,
especially relative to the intervention's low marginal cost in terms of
resources and time--providing FAFSA assistance took only 8 minutes, on
average. It is also important to emphasize that once they entered
college, the students persisted. Three years after the intervention, we
found that students who attended college after receiving assistance
with the FAFSA were persisting at higher levels and had higher
educational attainment than their counterparts who had not received the
streamlined process. In other words, they were able to succeed in
college even though the barrier of the FAFSA process would have kept
them out of school. These findings suggest other opportunities for
streamlining processes and providing quick assistance could increase
greatly participation in programs that require filling out forms to
become eligible.
While the project above emphasizes the benefits of providing
assistance and a streamlined process to complete the FAFSA, we did not
similarly find positive effects from just giving families information
about their aid eligibility. In the context of the FAFSA project, we
told a random subset of families the amount of a Pell grant they were
eligible to receive if they completed the FAFSA by themselves.
Unfortunately, families who received aid information but no assistance
with the FAFSA did not experience improved outcomes. This suggests
information alone is not enough to help families overcome barriers in
the college enrollment process, and the complexity of the FAFSA and/or
the burden of navigating through the application process alone are
significant barriers. However, it is possible that earlier information
could generate more positive effects.
the context today: what more could be done?
While there have been recent improvements to the FAFSA,
these efforts do not fully address the needs of many students, and
there is still significant room for improvement.
Given the many critiques of the FAFSA, there have been numerous
calls to simplify the financial aid process. The Department of
Education has made some headway into simplifying the existing online
FAFSA, including introducing skip-logic to minimize the number of
questions and allowing applicants and parents to import IRS-income tax
data. While these changes are likely helping many students, they are
not reaching all students, and low-income students in particular,
continue to face major barriers. The recent improvements to the FAFSA
still require families to be aware of the form and process. Moreover,
to benefit from the simplified form and process (i.e., skip logic and
pre-population using data from the IRS), student must have access to a
private, online computer, preferably with high-speed Internet, a
problem for many low-income families.
While there have been improvements to the process, these efforts do
not fully address the needs of many students, and there is still
significant room for improvement. Some of the remaining problems
include:
Low visibility and Misinformation: Many families
still do not know that the FAFSA exists and how to access it.
No amount of simplification will help if individuals do not
actually access the form. Additionally, many individuals,
particularly low-income students, often greatly overestimate
the cost of higher education) and so do not bother completing
form because they do not think they can afford college or will
qualify for financial aid.
Missed deadlines: King (2004) found that of those who
did file a FAFSA, more than half missed the April 1st deadline
to be eligible for State and institutional aid programs.
Complicated Tasks: Research in behavioral psychology
shows individuals tend to put off complicated or menial tasks.
Minimizing time and effort in completing forms may therefore
make individuals more likely to spare the time. For example,
corporate savings plans that make participation the default
while requiring employees to take action to opt-out have
dramatically higher participation rates than plans that require
employees to deliberately opt-into the plans.
Need to Revisit the FAFSA Multiple Times: An
additional impediment is the number of times a family must
revisit the FAFSA to complete it.\7\ As shown in our FAFSA
Project, streamlining the process by allowing participants to
submit the FAFSA immediately had large, positive effects. With
each additional delay, families are less likely to fully
complete the process.
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\7\ Venegas (2006) describes student frustration from having to
pause and revisit the online FAFSA multiple times:
`` . . . at first I had to go on-line to get a PIN [personal
identification number] for myself. Then later I went back to fill out
my FAFSA. When I was at the end of the form, I saw that I had to get a
PIN for my parents . . . I got a PIN for my parents and then I went
back to complete the form . . . then I had to go back again and look at
my SAR [Student Aid Report]'' (p. 9).
There is increasing evidence that college can be a high-
---------------------------------------------------------------------------
risk investment.
It is also worth emphasizing how the higher education context has
changed in recent years. With increasing information about high-debt
burdens and low-graduation rates at some colleges, it is clear that the
college investment can be a high-risk proposition. While the average
return to a postsecondary credential is substantial and justifies the
cost in most cases, there is wide variation in the returns to a degree
based on the specific college attended and the major completed.
Moreover, nearly half of college entrants do not graduate at all and so
forfeit the potential returns to a degree.
The college decision process is only becoming more
complicated.
In addition to being a costly and uncertain endeavor, attending
college also requires one to make a complicated set of decisions that
must be done in the appropriate order and at the right times. These
decisions include whether and how to prepare, where to apply, which
institution to choose, and how to finance the costs. Overall, the
process of college choice involves simultaneously ranking options along
multiple dimensions while having only incomplete, uncertain information
and little support on how to interpret the facts that are available.
These choices carry on throughout the enrollment experience as students
must constantly reevaluate if their enrollment decision is likely to
pay off.
There are many negative and far-reaching repercussions due to the
complexity of the college investment combined with the lack of clear
information. This translates to keeping some students out of higher
education. Among those who do decide to attend, there is an over
reliance on bad or incomplete sources of information, often at the
peril of the student. Oppressive loan burdens and rising student loan
defaults also suggests evidence of bad college choices. Some companies
have also exploited the heightened need for information by charging
families excessive amounts for college facts that are freely available
elsewhere if one knew how to navigate through the multiple sources that
focus on higher education.
The Need Analysis Calculation does not reflect accurately
the financial situations of many college students.
While the current financial aid system was created with the idea of
determining the need of recent high school graduates who are dependent
on their parents and attend college full-time, college students are a
much more diverse group. Most would be considered ``nontraditional,''
meaning someone who fits at least one of the following criteria:
Delays enrollment after high school;
Attends part-time;
Works full-time while enrolled;
Considered financially independent;
Has dependents other than a spouse;
Does not have a regular high school diploma (i.e., a
GED or other certificate);
Is a displaced worker or unemployed;
Is a welfare recipient;
Is an immigrant.
According to Choy (2002), nearly three-fourths of all
undergraduates are nontraditional. The nontraditional group includes
working adults, parents, welfare recipients, immigrants, displaced
workers and the unemployed, and single, financially independent
students.
Given the disconnect between how the financial aid system was
designed and the profile of many college students, many suggest that
the current financial aid system does not adequately meet the needs of
many, particularly nontraditional, students.
There are several major criticisms of the way Federal need analysis
is applied to nontraditional students. First, it is assumed that the
earnings of the potential student are relatively minor (i.e., the
result of a summer job) and should be taxed highly to cover college
expenses. Moreover, the calculation assumes that the parents' income,
the main source of support for the child, will continue even while the
student is in college and should be used to help cover expenses. In
contrast, independent students do not have other major sources of
support to rely upon. Most nontraditional students are formally engaged
in the labor market when applying for financial aid, and while the
government assumes this income level will remain the same even after
college enrollment, the nontraditional student is actually likely to
experience a reduction in earnings while pursuing a degree. Therefore,
assumptions about the amount of earnings available to them while in
school are incorrect. As an extension of this, the EFC for many
nontraditional students may be too high as they are penalized for their
earnings the year before starting school.
ways to improve the effectiveness of our financial aid system
There are many opportunities for improving the Federal financial
aid system. Below I make several recommendations.
(1) When Designing Aid Program, Learn from the Examples of Successful
Policies
As noted above, research suggests that aid programs are most
successful when they are well-publicized and relatively easy to
understand and apply for. These findings have important implications
for our Federal aid programs as the research lends credibility to the
notion that the Pell grant could be more effective if it had greater
visibility and were easier to understand and access. A program that was
much better publicized and easy to obtain had large positive effects on
enrollment. This program, the Social Security Student Benefit (SSSB)
Program, gave the 18- to 22-year-old children of dead, disabled, or
retired Social Security beneficiaries monthly support while they were
enrolled full-time in college. At its peak, it provided grants totaling
$3.3 billion annually to 1 out of 10 students, but it was phased out
because of the major overlap with the relatively new (at the time) Pell
grant program. However, in contrast to the Pell grant, awareness among
potential SSSB beneficiaries was high due to notification from the
government and the extremely simple application process. Dynarski
(2002) examined the impact of eliminating the SSSB in 1982 and
estimates that doing so reduced the college access and attainment of
former beneficiaries significantly. This suggests that it had been very
effective as a policy, and duplicating some of its design would improve
the effectiveness of the Pell grant.
(2) Proactively Disseminate Clear Information with Families Early and
Often
Proactively disseminating the information is my second
recommendation. Additional effort must be taken to translate and
circulate it to an audience that may understand little about higher
education offerings, pricing, financial aid, or quality. Therefore, the
Federal Government should actively reach out to potential students
where they live, study, and work rather than putting the responsibility
on the individual to seek out the information on their own. This should
be done through a series of partnerships with educational, social
services, and employment organizations along with other government
agencies. For instance, the government should work with college access
programs and youth organizations to reach students.
One specific idea would be to send students and their families
information about possible aid eligibility as early as elementary
school. Using information from tax returns, an estimate could be made,
and these reports could be similar to old Social Security projected
benefits letters that working adults received. A related idea would be
to summarize financial aid eligibility in a table with family income on
one side and family size on the other. Research suggests those two
variables give a very good estimate of aid eligibility (Dynarski and
Scott-Clayton, 2006), and such simple, early information could help
combat misperceptions about college costs and the availability of aid.
(3) Use and Enable Multiple Pathways for Families to Complete the Aid
Application Process
As noted above, while there have been improvements to FAFSA on the
Web, students without access to a private computer with high-speed
Internet access are not able to use the tool. Moreover, awareness of
the FAFSA remains low. Therefore, I encourage maintaining the paper
FAFSA as a submission method while also enabling community-based
organizations, which help students and families complete the FAFSA
free-of-charge, to submit batches of FAFSA once receiving consent from
families. This would increase the opportunities for interacting with
the form and help the many organizations working in the field to
streamline their FAFSA assistance by interacting directly with the
Department of Education (rather than having to take each individual
family through the FAFSA on the Web or paper form). In my FAFSA
project, having electronic submission directly from the tax site to the
Department of Education reduced the amount of time and effort needed on
both the part of the family and the tax professional.
(4) Minimize the Burden on Families when Completing the FAFSA
The FAFSA is a significant barrier to accessing college financial
aid, or even just determining eligibility level. The barrier is so
large that even informing families of $4,000 of grant eligibility was
not enough to have them overcome the burden of navigating through the
aid application process. Therefore, as much as possible, the process
should limit the amount of work a family needs to do to complete the
form.
Most importantly, we should eliminate steps that could be
accomplished other ways. For instance, families should not be required
to supply information available elsewhere. To some degree, this is the
purpose of having IRS data populated into the FAFSA on the Web.
However, another step forward would be to have this match happen behind
the scenes automatically. As we have demonstrated, for most families,
one could complete approximately two-thirds of the FAFSA using tax
information. As a result, it took less than 10 minutes to complete the
rest of the form (Bettinger, et al., 2012). If a family wanted to opt
out of the system or question the validity of their matched data, they
could do so, but for the vast majority of families, they would be able
to skip a burdensome step, especially for those who are not able to use
FAFSA on the Web. Information on family background and income is also
available from other sources, including the Free and Reduced-Price
Lunch system and other government programs, and these sources could
also be used to determine family aid eligibility.
Making a shorter form (simplification) would likely increase FAFSA
submissions. Moreover, such a change would make it easier to develop
programs that could help families to fill out and submit the form. By
streamlining the form and process, community-based organizations would
be able to serve students more easily as fewer pieces of information
would be required, and their outreach and assistance could be more
effective.
We should also limit the number of interactions and steps needed to
complete the FAFSA. In my research on the effects of simplifying the
FAFSA process, we found the largest effects associated with individuals
who used both simplification to complete the form and then took
advantage of automatic filing or assistance in filing. These
individuals for whom assistance and simplification were most prominent
(and the FAFSA was completed in the office) appear to be the ones most
affected by the treatment.
(5) Improve How Aid and College Information is Reported
Information is a major barrier, and the challenges do not end with
the completion of the FAFSA and college applications. The information
reported to students can take many forms, and often it is not clear
what is a grant versus a loan. When comparing institutions, it can be
very difficult to make an apples-to-apples comparison. Therefore, I
recommend standardizing a significant part of aid award letters so that
it is clear to students how to interpret their aid packages. Pell
grants and other grants should be clearly delineated while the terms of
loans and work study funds should be treated separately. However, given
the great diversity of institutions and students, colleges and
universities should be given the freedom to customize their messaging
after the required standard language about the aid package.
This recommendation is just one step toward helping students and
their families sort through important information to help with their
choices and so that they can avoid unrealistic debt and low performing
schools and majors. While I recommend providing clear, simplified
information, it is clear that we need to think much more carefully how
information is provided. There are other tools geared toward serving
potential students, such as the online College Navigator from the
Department of Education. However, the families most in need of these
types of resources have little awareness about the existence of these
tools and limited online access. Moreover, these tools are overwhelming
by offering hundreds of pieces of information on one page as if they
are all equally important. Such tools are also missing key pieces of
information relevant to college enrollment decisions, such as
employment and earnings outcomes. While earnings are not a complete
picture of the return to a college degree, schools with similar
resources, student bodies, and admissions standards can have vastly
different returns (Carey, 2004; Hess, et al., 2009).
(6) Pilot an Expansion of the Work Study Program at Colleges Serving
Many Low-Income Students
Due to rising costs and declining affordability, most students have
to work while attending college. There are major concerns that such
activities detract from their academic pursuits. According to the
National Survey of Student Engagement (2012), 60 percent of college
students working 20 hours or more a week believe that work interferes
with their school work, but the majority of these students also report
asking employers about increasing their work hours in order to pay
tuition and living expenses. However, it is also possible that labor
market experience may help students prepare for future jobs and
careers. It is possible that working a reasonable number of hours gives
students skills that make them more competitive and capable when they
enter the labor market after college, and on-the-job training is an
important way to increase one's human capital. Furthermore, it is
possible that off-campus and on-campus employment have different
effects on students' academic performance and persistence, as Work
Study jobs recognize the individual's primary function is to be a
student.
The Federal Government spends over $1 billion on the work-study
program to subsidize the wages of college students. Recent research
suggests receipt of work-study funds has a positive effect on the
number of credits completed during the first year (Soliz and Long,
2013). While much more research is needed to fully understand the
program, funds are limited at many of the colleges that serve
significant numbers of low-income, eligible student. As working while
in college is necessary for most students, it is worthwhile to explore
how the Federal Government could support this work in a way that still
enables a student to make progress toward a degree or credential.
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Soliz, Adela and Bridget Terry Long. (2013) ``The Causal Effect of
Federal Work-Study on Student Outcomes in the Ohio Public
University System.'' Harvard University mimeo.
U.S. Census Bureau, Population Division, National Population Estimates
by Age, Sex, and Race: 1900 to 1979. Retrieved from http://
www.census.gov/popest/data/national/asrh/pre-1980/PE-11.html.
U.S. Census Bureau, Population Division, Population Estimates Program,
U.S. Population Estimates by Age, Sex, Race, and Hispanic Origin.
Retrieved from http://www.census.gov/popest/index.html.
U.S. Census Bureau, Current Population Survey, 1947 to 2010. Table A-6.
``Age Distribution of College Students 14 Years Old and Over, by
Sex: October 1947 to 2010.'' Retrieved from http://www.census.gov/
hhes/school/data/cps/historical/index.html.
U.S. Department of Commerce, Census Bureau, Current Population Survey.
2012. Current population survey data on educational attainment.
Retrieved from http://www.census.gov/hhes/socdemo/education/data/
cps/1960/cp60pcs1-20/tables.html.
Venegas, Kristan M. ``Low-income urban high school students' use of the
internet to access financial aid,'' NASFAA Journal of Student
Financial Aid, 36 (2006) 4-15.
The Chairman. Thank you, Dr. Long.
Ms. Cook, please proceed.
STATEMENT OF KIM COOK, EXECUTIVE DIRECTOR, NATIONAL COLLEGE
ACCESS NETWORK, WASHINGTON, DC
Ms. Cook. Mr. Chairman, Ranking Member Alexander, and
members of the committee, thank you for this opportunity to
testify on this important issue to the National College Access
Network. I am particularly honored to offer this testimony as a
Pell grant recipient myself.
The National College Access Network and its over 400
members and affiliates work in communities across the country
to help students to and through college. Committee members may
know some of these, including the Iowa College Access Network,
Tennessee Achieves, the College Success Foundation in
Washington State, and uAspire in Massachusetts.
Most of our students are low-income and the first in their
families to attend college. As a Nation, we've made great
progress over the past 20 years with more students pursuing
higher education. But, as Dr. Long indicated, when we scratch
the surface of the data, attainment gaps remain, particularly
by income and race.
According to the National Center for Education Statistics,
52 percent of 2011 high school graduates from low-income
families enroll in college immediately after high school, a
figure 30 percentage points lower than their high-income peers.
This is the first generation of Americans less likely to
achieve a college degree than their parents, a disarming detour
from our belief in the American Dream that every generation
succeeds more than the previous one.
Access to college relies on three factors: academic
preparation, awareness through advising, and affordability and
financial aid--the three ``As'' of access, if you will. I will
focus on awareness and affordability issues in these remarks.
First generation students need support, often described as
one arm around one child to build awareness and aspirations,
and then navigate the steps needed to enroll in and complete
college, including the 68-page instructions of the FAFSA. Our
field is challenged to scale these labor intensive efforts to
provide this necessary intrusive advising to every needy
student.
Students also need the right information to help them make
decisions to attend a school that best matches their academic
qualifications and provides the best environment to support
completion. Currently, students are not able to answer the
simple question: How likely is a student like me to complete at
this college?
Vital elements are not reported, including Pell grant
recipient graduation rates, status of part-time and transfer
students, and outcomes in the labor market. Further, our
primary database, the Integrated Postsecondary Education Data
System, IPEDS, that provides most of the information that we do
know tracks only first-time full-time students that account for
barely half of today's college enrollment.
We need to broaden that data set to more accurately reflect
all students, including today's student that is more likely
part-time, delaying entry, and/or attending multiple
institutions through his or her academic career. We also
encourage the department to use this as an opportunity to
evaluate current regulatory burden and to streamline data
collection and regulations to those that are most relevant to
students.
As we look to affordability and the future of financial
aid, we urge you to maintain your commitment to need-based aid
that is core to the Pell grant and to incentivize States and
institutions who share that commitment.
Mr. Chairman, to answer your early awareness issue, the
financial aid process should be simplified by giving students
information about their Federal student aid eligibility earlier
in the process. Today's student applies for admission to
institutions before fully knowing his or her eligibility for
aid, a consumer piece that would be unheard of for other major
purchases like a mortgage or car, where you go in knowing your
approval rate, your loan rate, and what you can expect to
spend.
Using income data from 2 years prior would allow us to
reverse these steps in the process, giving students and
families the information in a timely manner when it is most
needed for decisionmaking.
Last, we must acknowledge the changing demographic and
profile of today's student. We must adapt student aid to serve
this new profile of student, who is increasingly older,
working, attending part-time, and transferring among multiple
institutions. We must respond with more flexible disbursements
of the Pell grant to allow for continuous year-round enrollment
and more flexible repayment options for student loans that many
students take.
In closing, we believe in a continued strong role of the
Federal Government to ensure college access. NCAN and its
members' programs offer assistance and best practices to inform
your considerations. We thank you for having this important
discussion today and for your ongoing commitment to college
access.
[The prepared statement of Ms. Cook follows:]
Prepared Statement of Kim Cook
summary
The National College Access Network (NCAN) and its over 400
affiliates work in communities across the country to help students to
and through college. Most of our students are low-income and the first
in their families to attend college.
As a nation, we have made progress over the past 20 years with more
students pursuing higher education, but when we scratch the surface of
the data, attainment gaps remain. According to the National Center for
Education Statistics, 52 percent of 2011 high school graduates from
low-income families enrolled in college immediately after high school,
a figure 30 percentage points lower than their high-income peers.
Access to college relies on three factors: academic preparation,
awareness through advising, and affordability/financial aid, the three
A's of access. First-generation college students need information and
translators for that information, often described as ``one arm around
one child'' to help build awareness, aspirations and then navigate the
steps needed to enroll in and complete college. Our field is challenged
to scale these efforts to provide this necessary ``intrusive'' advising
to every needy student.
Today's students are in need of the right information to help them
make decisions to attend a school that best matches their academic
qualifications and provides the best environment to support ultimate
completion. We are encouraged that a conversation is widening on the
topic of information available to students. Currently, vital elements
are missing: particularly Pell grant recipient graduation rates, status
of part-time and transfer students, and outcomes in the labor market.
These data are crucial to helping students select the institution where
they are most likely to graduate.
As we look to the future of Federal student aid, we urge you to
maintain your commitment to need-based aid that is core to the Pell
grant program and to incentivize States and institutions that share
that commitment. Also, consider how to strengthen the Pell grant
Program in the future so it continues to serve students in need. The
financial aid process could be simplified by continuing the data-
matching and streamlining of the FAFSA form and by giving students
information about Federal student aid eligibility earlier than current
process allows so have it before, rather than after, they apply to
college.
Last, we must acknowledge the changing demographics and profile of
today's student. Our next frontier will be a reinvention of Federal
student aid to serve this new profile of student that is increasingly
older, attending part-time, and transferring among multiple
institutions. We must respond with more flexible disbursements of the
Pell grant to allow for continuous enrollment and more flexible
repayment options for student loans.
In closing, we believe in a continued strong role of the Federal
Government to ensure college access for today's student and beyond.
NCAN and its member programs offer our assistance and best practices to
inform your considerations of the next reauthorization of that Higher
Education Act. We thank you for having this important discussion today
and for your ongoing commitment to college access.
______
Mr. Chairman, Ranking Member Alexander, and members of the
committee, thank you for this opportunity to testify on ``Ensuring
Access to Higher Education: Simplifying Federal Student Aid for Today's
College Student.'' I am particularly honored to offer this testimony as
a Pell grant recipient myself. My organization, the National College
Access Network (NCAN), and its over 400 members and affiliates work in
communities across the country to help students to and through college.
Our students are mostly low-income and the first in their families to
attend college. Those local programs include:
The Iowa College Access Network works statewide to provide
community outreach and one-on-one advising to Iowans. Currently, ICAN
has Student Success Centers in eight communities across Iowa, made
possible through partnerships with institutions of higher education.
TnAchieves, an NCAN member with programs in 27 Tennessee
counties, provides the opportunity for public high school students to
attend community or technical college for free. The program provides
mentors to students and has a 75 percent retention rate from fall to
fall.
The College Success Foundation, serving Washington State,
in addition to its college access services for middle and high
schoolers, has a unique partnership with the State of Washington and
Washington-based corporations. CSF manages the Washington State
Opportunity Scholarship, which encourages Washington youth to pursue
STEM fields and to work in Washington after college.
uAspire, with three locations in Massachusetts, awarded
over $5 million in last dollar scholarships, helped its students
receive $220 million in financial aid in the last 5 years, and its
uAspire scholars have a re-enrollment rate of 84 percent, compared to
66 percent nationally.
As a nation, we have made progress over the past 20 years with more
students pursuing higher education. However, when we scratch the
surface of the data, persistent access and attainment gaps persist for
low-income and minority students. Low-income students have made gains
over time in the percentage of students enrolling and graduating, but
these gains have been far outweighed by the gains of students from
high-income families.\1\ High school graduates from low-income families
enroll in college immediately after high school at a rate of 52
percent, whereas their high-income peers enroll at rates 30 percentage
points higher.\2\
---------------------------------------------------------------------------
\1\ Laurie Belsie, ``Changing Inequality in College Entry and
Completion,'' National Bureau of Economic Research (December 2011),
retrieved from: http://www.nber.org/digest/may12/w17633.html.
\2\ ``Immediate Transition to College,'' National Center for
Education Statistics (2013) Accessed November 12, 2013, Retrieved from:
http://nces.ed.gov/fastfacts/display.asp?id=51.
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This achievement gap has significant impacts on the efforts that
once again make the United States the first in college-completion
worldwide. The United States ranks 14th among industrialized nations in
college-completion for 24-35-year-olds, and worse, according to the
OECD, ``the odds that a young person in the U.S. will be in higher
education if his or her parents do not have [a post] secondary
education are just 29 percent''--one of the lowest levels for developed
countries.\3\ Perhaps most alarming: this is the first generation of
Americans less likely to achieve a college degree than their parents,
an unsettling detour from our belief in the American dream where
successive generations attain more than the previous ones.
---------------------------------------------------------------------------
\3\ ``OECD Indicators 2012: United States,'' Organization for
Economic Cooperation and Development, (September 2011) retrieved from:
http://www.oecd.org/education/CN%20-%20United
%20States.pdf.
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Only 54 percent of today's first-time, full-time students complete
a 4-year degree within 6 years after enrolling.\4\ For this reason,
college access work has evolved into a continuum spanning access,
persistence and completion. College access and success have become
intertwined goals as we fight this war on two fronts--enrollment and
completion, both of which require comprehensive strategies to address.
This testimony will focus on the barriers to access that low-income
students' face and how simplification of the Federal student aid
process can address those barriers.
---------------------------------------------------------------------------
\4\ Shapiro, Doug, et al., ``Completing College: A National View of
Student Attainment Rates'' National Student Clearinghouse Research
Center. 15 November 2012. Retrieved from: http://nscresearchcenter.org/
wp-content/uploads/NSC_Signature_Report_4.pdf.
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ensuring access
Under-represented students face barriers to awareness and
affordability on the pathway to college and graduation. Students who do
not come from families and/or schools with a college going culture may
not see college as a realistic possibility for themselves. Furthermore,
without information about financial options, students may discount the
college opportunity on perceptions of cost alone. Students must know
college is an option, and once they have decided to go, they need
assistance knowing what steps to take to get there.
Access to college relies on three factors: academic preparation,
awareness through advising, and affordability/financial aid, the three
A's of access if you will. To help build awareness, aspirations and
then navigate the steps needed to enroll in and complete college,
first-generation college students need information and translators for
that information, often described as ``one arm around one child.'' A
recent study of College Possible Twin Cities, with similar programs in
Minnesota, Wisconsin, Nebraska, and Oregon, provided results that this
intrusive advising of high school students results in low-income
students attending 4-year colleges at higher rates.\5\
---------------------------------------------------------------------------
\5\ Christopher Avery, ``Evaluation of the College Possible
Program: Results from a Randomized Controlled Trial,'' National Bureau
of Economic Research (October 2013), retrieved from: http://
www.nber.org/papers/
w19562?utm_campaign=ntw&utm_medium=email&utm_source=ntw.
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I cannot emphasize enough the important role having a trained adult
work alongside a student throughout the college advising process. This
includes NCAN member program advisors, many of whom, like the 14 State
chapters of National College Advising Corps based in North Carolina,
employ AmeriCorps volunteers. It also includes school counselors who
frequently must do this work at challenging student to counselor ratios
upwards of 800:1, and staff of federally funded outreach programs, such
as TRIO and GEAR UP. These professionals all serve potential first-
generation college students. Our field is challenged to scale these
efforts to provide this necessary ``intrusive'' personal advising to
every needy student.
Today's students are in need of the right information to help them
make decisions about attending a school that best matches their
academic qualifications and provides the best environment to support
ultimate completion. Students, who do not enroll at the best academic
match, are less likely to graduate.\6\ Our members across the country,
such as programs like College Tracks and College Bound, both in
Montgomery County, Maryland, work with students to help them find their
best possible academic match as well as social and financial fit.
---------------------------------------------------------------------------
\6\ Caroline M. Hoxby and Christopher Avery, ``The Missing ``One-
Offs'': The Hidden Supply of High-Achieving, Low Income Students,''
National Bureau of Economic Research (December 2012), retrieved from:
http://www.nber.org/papers/w18586.
---------------------------------------------------------------------------
In order to provide this guidance, professionals need to help a
student choose a school that best matches their academic qualifications
and provides the best environment to support ultimate completion.
Currently, the most beneficial information to this conversation is not
available. Students are not able to answer the simple question: ``how
likely is a student like me to succeed at this college? '' Students do
not know the following:
How many part-time students graduate?
How many Pell grant (low-income) students graduate?
How many adult students graduate?
How many military students graduate?
Do students who transfer to another school eventually
graduate?
Do students get a job after they graduate?
We are encouraged that a conversation is beginning on this topic of
the information available to students. The data just mentioned are
necessary elements for students and also for the proposed ratings
system from the Obama administration. But in order to liberate these
data, this committee must work with institutions to report this data
publicly.
After using this information to decide where to apply, students
must decide where to enroll. Comparing financial aid packages is a
significant part of this decision. Unfortunately, the variety of
information, formatting, and definitions in these packages creates a
barrier to students considering affordability in their college choice.
Award notifications vary widely, and frequently there are not
delineations between grant aid and self-help aid such as loans and
work-study. We applaud the over 500 institutions that have already
adopted the Federal shopping sheet. But this is fewer than 10 percent
of institutions nationwide. Award notifications should at the least
include common definitions and an agreement to clearly separate grant
and loan aid.
For students who elect to attend institutions where they will need
to take out loans, it is important that they receive entrance loan
counseling as currently required by law. Unfortunately, current student
loan entrance and exit counseling does not achieve its intended goal.
In fact, many students do not even consider it counseling, reporting in
surveys that they never received it.\7\ Opportunities for improvement
include: implementing the latest online-learning theories, ensuring
that the guidance is memorable, and removing the ``guess until
correct'' current structure.
---------------------------------------------------------------------------
\7\ O'Sullivan, Rory, and Healey C. Whitsett. ``Lost without a Map:
A Survey about Students' Experiences Navigating the Financial Aid
Process.'' NERA Economic Consulting. 11 October 2012. http://
www.nera.com/nera-files/PUB_Student_Loan_Borrowers_1012.pdf. Accessed:
1 August 2013.
---------------------------------------------------------------------------
This counseling is part of a broader conversation on financial
literacy for college planning and success in the early years and
throughout the postsecondary education years. These services can best
be provided by experts from the field. Students should be required to
take a financial literacy seminar (or series of) during secondary
school. This course should focus on real-life money management for the
medium term with a focus on planning for college, how to fund college,
and the benefits of this investment. Students should have access to
robust financial literacy training and experience while pursuing
postsecondary education to ensure that they are much better informed
about student loan indebtedness, developing and living within a budget,
and minimizing credit card and consumer debt. The Federal Government
should support the provision of financial literacy training and
materials at all levels of education.
affordability through simplifying financial aid
The final ``A'' of access is affordability. Some progress has been
made. We strongly support the current Federal investment in student aid
that awards over $150 billion per year in Pell grants, campus-based
aid, and student loans. We similarly applaud the great strides we have
made in simplifying the Free Application for Federal Student Aid
(FAFSA) through the online application data-sharing with the Internal
Revenue Service and use of technology, like skip logic, to tailor the
form to only questions applicable to that student. These are great
strides forward; however, we note that the FAFSA EZ, as proposed in
section 438 of HEOA 2008, has yet to come to fruition. Even with these
strides forward, barriers still exist.
Low-income students aspire to go to college at the same rate as
other students but state that financial aid is an important factor at
much higher rates.\8\ Even though we know the importance of financial
aid to students, the sad truth is that 2.3 million students who would
have qualified for Federal student aid still do not file the FAFSA.\9\
\10\
---------------------------------------------------------------------------
\8\ ``Complexity in College Admission: The Barriers between
Aspiration and Enrollment for Lower-Income Students.'' College Board
Advocacy and Policy Center. October 2011. Page 5. http://
advocacy.collegeboard.org/sites/default/files/11b-
4062_AdmissComplex_web.pdf. Accessed: 1 August 2013.
\9\ Heather Novak and Lyle McKinney, ``The consequences of leaving
money on the table: Examining persistence among students,'' The Journal
on Student Financial Aid. Volume 41, Issue 3 (2011): 6-23. Accessed
November 8, 2012, retrieved from http://publications.nasfaa.org/jsfa/
vol41/iss3/1/.
\10\ Ryan D. Hahn and Derek Price, Ph.D., ``Promise Lost: College-
Qualified Students Who Don't Enroll in College,'' Institute for Higher
Education Policy (November 2008). Accessed from http://www.ihep.org/
assets/files/publications/m-r/promiselostcollegequalrpt.pdf.
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The financial aid process should be simplified by giving students
information about their Federal student aid eligibility earlier than
the current process allows. Today's student applies for admission to
institutions before fully knowing his or her eligibility for Federal,
State and institutional aid. These steps in the process should be
reversed. Taking advantage of current legislative authority in the 2008
Higher Education Opportunity Act, such as using income data from
earlier years instead of only the prior year, would allow students to
know their Federal aid eligibility and approximate awards before they
are applying to colleges--the time at which such information would be
of most benefit to students and families. In section 438 of HEOA 2008,
a demonstration project, to be reviewed by the Advisory Committee on
Student Financial Aid, on using 2 years prior, or prior year tax data,
to determine when aid status was to be conducted. This has not yet
happened.
Those students who do apply are often discouraged later in the
process by burdensome verification requirements to produce tax
transcripts and other supplemental applications for State and
institutional aid where those parties request more information than
collected on the FAFSA. We encourage exploration of further inter-
agency cooperation that would allow enhanced data-sharing to meet these
needs in one financial aid application. Using income data from earlier
years would also negate the need to estimate on the FAFSA, one of the
biggest triggers to put students in the verification process.
The FAFSA form is used to determine a family's Expected Family
Contribution, or EFC. Since the last reauthorization of the higher
education act, the income threshold used to determine at what level a
family should have financial obligation for higher education has
fluctuated from $20,000 to up to $31,000, and is now set at $23,000.
This inconsistency is a disservice to families as the cost-of-living
grows. Setting the income level based on the poverty level, rather than
a congressionally determined number that continually needs to be
reviewed, will ensure that the neediest families are eligible for a
full Pell grant without having to take additional actions to prove
their need. Our recommendation is to set the income threshold used to
determine an automatic $0 contribution to 200 percent of the poverty
level and adjusted annually for inflation.
As we look to further simplifying Federal student aid, we suggest
consideration of a comprehensive Federal college financing system that
also crosses into the jurisdiction of the Finance Committee to re-
examine tax credits and deductions. These benefits should serve needy
students first, instead of primarily upper-income beneficiaries of the
current system. In a time of fiscal constraints, these dollars could be
redirected in a more equitable manner to truly provide college access
to those students in danger of not attending at all.
We urge you to maintain your commitment to need-based aid with the
Pell grant program as its core and to incentivize and reward States and
institutions that share that commitment. HEOA 2008 (20 U.S.C. 28,
Subchapter IV, Part A) authorizes a Pell grant that will reach a
maximum of $6,100 in 2017 and stay at that level moving forward. The
Pell grant award must be indexed. The Pell grant has lost much of its
purchasing power \11\ and is continually the center of political
discussions or policy changes based on budgetary math rather than on
how to best serve needy students. During the reauthorization
discussion, Congress should examine the decreasing purchasing power of
the Pell grant and consider restoring the purchasing power by increases
greater than the rate of inflation.
---------------------------------------------------------------------------
\11\ ``Pell Grants Help Keep College Affordable for Millions of
Americans,'' The Institute for College Access and Success, (15 February
2012). Accessed: November 12, 2013, Retrieved from http://
www.ticas.org/files/pub/Overall_Pell_1-pager_2-15-12.pdf.
---------------------------------------------------------------------------
In order to support the success of Pell grant recipients, a change
should be made to support continuous enrollment and completion.
Institutions should have the flexibility for additional disbursements
of the Pell grant to allow students to take courses year-round as
continuous education increases the likelihood of graduation.\12\
Disbursements would still be limited to 150 percent of program time.
---------------------------------------------------------------------------
\12\ ``Time is the Enemy,'' Complete College America (September
2011): Page 12. Accessed 12 November 2013, Retrieved from: http://
www.completecollege.org/docs/Time_Is_the_Enemy
_Summary.pdf.
---------------------------------------------------------------------------
The Pell grant program is a large and vitally important investment.
For this reason, the Higher Education Opportunity Act of 2008 required
the ability to compare Pell grant recipient graduation rates with those
of non-grant recipients. As mentioned previously, this information is
still not available. Some Pell grant recipient graduation rates are
available using the Beginning Postsecondary Study, but this is only a
snapshot every few years. Annual information can be derived from the
National Student Loan Data base, but because it does not include non-
aid recipients, a comparison with non-grant recipients is not possible.
This provision from section 438 should be enforced, and the graduation
rates should be additionally available by institution, so that students
know where they will be most likely to succeed.
today's student
Last, we must acknowledge the changing demographics and profile of
today's student. The time-honored concept of an 18-year-old high school
graduate heading directly to a 4-year institution, living on campus,
with primarily parental financial support, and graduating in 4 years is
no longer a reality. Of the over 29 million postsecondary students
nationwide, only 15 percent of the current enrollment are first-time,
full-time students. Today's college student is increasingly older, non-
white, delaying entry to college, beginning at a community college,
transferring perhaps multiple times, working full-time and perhaps
caring for dependents.
Just as college access programs were challenged to evolve to tackle
completion issues in recent years, our next frontier will be a
reinvention to serve this evolving profile of the 21st Century
student--a profile defined by differences rather than similarities. Our
current Federal student aid programs must respond with more flexible
disbursements such as reinstituting the year-round Pell grant and
flexible repayment options for student loans. It also must provide
information earlier on the qualification for financial aid to aid
students of all ages, and consider how the traditional timeline does
not help adult students. And finally, outcomes must be available for
all types of students, not just the 15 percent who are enrolling in
college for the first time as full-time students.
In closing, we believe in a continued strong role of the Federal
Government to ensure college access for the students of today and
tomorrow, dating back to the Morrill Act of 1862 that first created
land-grant colleges. The upcoming reauthorizations of legislation such
as the Elementary and Secondary Education Act and Higher Education Act
afford us many opportunities to continue to support the goals of the
original Higher Education Act of 1965 as then-President Johnson
remarked,
``[The Higher Education Act of 1965] means that a high school
senior anywhere in this great land of ours can apply to any
college or any university in any of the 50 States and not be
turned away because his family is poor.''
NCAN and its member programs offer our assistance and best
practices to inform your considerations of the next reauthorization of
that Higher Education Act. We thank you for having this important
discussion today and for your ongoing commitment to college access.
Thank you.
The Chairman. Thank you very much, Ms. Cook.
Dr. Scott-Clayton, welcome and please proceed.
STATEMENT OF JUDITH SCOTT-CLAYTON, Ph.D., B.A., ASSISTANT
PROFESSOR OF ECONOMICS, COLUMBIA UNIVERSITY, NEW YORK, NY
Ms. Scott-Clayton. Mr. Chairman, Senator Alexander, and
distinguished members of the committee, thank you for this
opportunity to testify today about Federal student aid and
college access. My comments are going to echo those made by my
colleagues here on this panel, because there's a lot of
consensus about what needs to change.
Before getting to my specific recommendations, I want to
raise a perennial question that always comes up in discussions
about college access, and that's the question: Is college worth
it? This question persists, seemingly regardless of the
mountains of economic evidence that consistently answer with a
resounding yes.
I think the persistence of this question can be traced to a
couple of common misperceptions about college access. First,
those who question the value of college often say, ``We don't
need more students going to college. We need more students
getting real-world applied career and technical education,''
not realizing that, in fact, this type of training occurs in
community and technical colleges all around the Nation. This is
college. This is part of college.
It might not be the traditional baccalaureate education
that some people think of when they hear the word. But, in
fact, more than half of Federal Pell grant recipients are in
certificate or 2-year associate degree programs, often in these
types of applied fields.
Second, most people think college is actually much more
expensive than it typically is. They see stories in the news
media about elite private colleges charging $50,000 for
tuition, and they hear about unemployed graduates with
astounding amounts of student debt.
But most people, in fact, pay much less. After accounting
for grants, the average net price of a public 4-year
institution is only about $3,000 per year. At the typical
community college, a student who receives a Pell grant is
likely to pay nothing at all and, in fact, to receive some
money back in order to pay for books, supplies, and other basic
living expenses.
Only 2 percent of college entrants accumulate more than
$50,000 in student loans. Two-thirds borrow less than $10,000
over the course of their studies. These misconceptions
illustrate what I see as a major remaining barrier to student
access, and that's the complexity of the college decision
process itself, both in terms of how to choose the right
program and institution, as well as figuring out how to pay for
it.
And, unfortunately, the burden of this complexity is worse
among precisely those students that Federal student aid is
trying to assist. These students are much less likely to have a
family member or friend who has been through college, or to
have reliable access to a high school guidance counselor who
can help them through the process.
Far too many students fall off the path to college, not
because they decide they don't want to go, but because, like
most of us, they put off decisions that are overwhelming. They
might muster the persistence to surmount 5, 10 or 15 little
hurdles that come up along the way. But then they hit one more,
and they get stuck. They procrastinate, they miss a deadline,
and they let that one last hurdle make the decision for them.
The research evidence I cite in my written testimony
supports this. Financial aid can and does have a substantial
impact on college access. But complicated eligibility rules and
application procedures can undermine its effectiveness by
screening out the very students whose behavior we're trying to
influence.
So what can be done to address this? First, Congress should
simplify the Federal aid eligibility application and renewal
process. While some progress has been made on this in the past
few years, we have not come close to solving this problem.
A second key change I recommend is that Congress should
augment Pell grants, augment the financial aspect with basic
navigation support services for program participants. Evidence
is mounting that simple, low-cost, personalized college
guidance, which could be provided by a text message or even
over the phone, could have substantial effects on enrollment
and persistence.
One simple and low-cost reform would be to use phone
numbers and email addresses to send automatic messages with
timely information and connections to additional resources.
More sophisticated services could be contracted out to
independent organizations.
Third, I recommend that Congress align program rules to
support college success, not just access. Specifically,
Congress should prorate Pell grants based on course load so
that students can progress at their own pace. Currently, awards
max out when students take just 12 credits per term, which is
not enough to complete a degree on time.
My final recommendation is that Congress restructure how
student loans are repaid. This is an issue for college access.
Students dislike loans because they're scary. They're confusing
and risky. But if students knew before enrolling in college
that they could take a loan without having to worry about
crippling repayments, student loans might be a much more
effective tool for promoting access than they currently are.
Thank you again for putting this important issue on the
Nation's agenda, and I look forward to our conversation.
[The prepared statement of Dr. Scott-Clayton follows:]
Prepared Statement of Judith Scott-Clayton, Ph.D., B.A.,
overview
Chairman Harkin, Senator Alexander, and members of the committee,
my name is Judith Scott-Clayton. I am an assistant professor of
economics and education at Teachers College, Columbia University, as
well as a research fellow of the National Bureau of Economic Research
and a senior research associate at the Community College Research
Center. Over the past decade, I have conducted my own research on the
impacts of financial aid policy, reviewed the evidence from others
doing work in the field, and participated in policy working groups
examining financial aid at both the State and Federal level. Thank you
for the opportunity to testify about the current landscape of college
access and the role of Federal financial aid, and to suggest promising
directions for reform.
Key Facts About the Landscape of College Access
Several facts help motivate the importance of the topic at hand:
The value of a college degree, or even some college
experience, remains near historic highs.
While college enrollment rates have increased, gaps by
family income are growing larger.
While financial aid used to apply to only a small minority
of students, it is now the norm; 36 percent of enrollees receive Pell
grants; two-thirds of students receive some kind of grant aid.
For most families, the net price of college (tuition and
fees after grant aid) will be substantially lower than the sticker
price, but students and families are clearly confused about how much
college will cost for them.
What Do We Know About the Effectiveness of Federal Financial Aid in
Promoting College Access?
I draw four lessons from the available research:
Money matters for college access.
Program complexity undermines aid effectiveness.
Students need more than just information, they need help
navigating the college decision.
Access does not guarantee success; program design should
support both.
While loans are unpopular they may still be an important
tool for access.
What Are the Highest-Priority Directions for Reform?
I suggest four main directions for reform:
Simplify the eligibility calculation, as well as the
application and renewal process.
Augment Pell grants with basic ``navigation'' support
services for program participants.
Align program rules to support college success, not just
access.
Restructure student loan repayments so loans make the
enrollment decision easier, not harder.
Attached please find my complete testimony with additional
background and details of these proposals. I look forward to joining
the committee on Thursday.
______
Chairman Harkin, Senator Alexander, and members of the committee,
my name is Judith Scott-Clayton. I am an assistant professor of
economics and education at Teachers College, Columbia University, as
well as a research fellow of the National Bureau of Economic Research
and a senior research associate at the Community College Research
Center. Over the past decade, I have conducted my own research on the
impacts of financial aid policy, reviewed the evidence from others
doing work in the field, and participated in policy working groups
examining financial aid at both the State and Federal level. Thank you
for the opportunity to testify about the current landscape of college
access and the role of Federal financial aid, and to suggest promising
directions for reform.
i. the current landscape of college access
Nearly half a century ago, upon signing the Higher Education Act of
1965, President Lyndon Johnson stated his intent that the Act ensure
that ``the path of knowledge is open to all that have the determination
to walk it.'' \1\ Since then, great progress has been made in
increasing college enrollment rates for qualified students across the
income spectrum. Yet significant inequities remain, and while the
levels of college enrollment are higher across the board, the gaps in
enrollment between high- and low-income families are actually greater
for recent cohorts than for those born in the early 1960s (Bailey &
Dynarski, 2011).\2\ Income inequality in college degree completion is
even higher than for college entry, and these gaps cannot be completely
explained away by differences in preparation.
---------------------------------------------------------------------------
\1\ Lyndon Baines Johnson, ``Remarks at Southwest Texas State
College Upon Signing the Higher Education Act of 1965,'' November 8,
1965. Archived online by Gerhard Peters and John T. Woolley, The
American Presidency Project (www.presidency.ucsb.edu/ws/?pid=27356).
\2\ The gap in college enrollment rates between the top and bottom
quartiles of family income for cohorts born in the early 1960s was 39
percentage points, rising to 51 percentage points for cohorts born in
the early 1980s. Controlling for differences in test scores reduces the
gap to 14 percentage points in the earlier cohorts and 26 percentage
points in the more recent cohorts.
---------------------------------------------------------------------------
These gaps are troubling because of the compelling evidence
regarding the value of postsecondary education. Not only is the
earnings premium for a college degree near historically high levels,
but those with a college degree also have substantially higher
employment rates--even in this soft economy--and also receive better
benefits, are less likely to smoke, and are more likely to vote. The
median college graduate also pays $5,000 per year more in taxes than
the median high school graduate (Baum, Ma, & Payea, 2013).
Maintaining access to postsecondary education is thus a key
ingredient in economic mobility. And while a bachelor's degree appears
to offer the most substantial payoffs, it is important to note that 2-
year degrees, often in highly applied fields, also confer significant
benefits, and even those who enter college but drop out without any
degree do better than those who never enroll at all. So whenever we
talk about access to college we should keep in mind the full spectrum
of postsecondary experiences, from shorter career/technical programs to
traditional baccalaureate degree programs.
At the Federal, State, and institutional level, substantial amount
of aid are available to help students finance a college education. Over
a third of students receive Pell grants, and two-thirds will receive
some kind of grant assistance. In 2012-13, full-time undergraduates
received an average of over $13,000 in aid, including over $7,190 in
grants, nearly $5,000 in Federal loans, and $1,280 in other assistance
including education tax credits and Federal Work-Study (College Board,
2013b). For needy students, the current maximum Pell grant covers
almost two-thirds of average tuition and fees at a public 4-year
institution, and a $3,500 Stafford loan would more than cover the
remaining average tuition and fees (College Board, 2013a; using current
Pell maximum of $5,536 and average public 4-year tuition and fees of
$8,722). For the 40 percent of Pell grant recipients attending
community colleges, the maximum Pell will more than cover tuition and
fees, enabling students at the typical community college to use the
remaining amount to cover books, supplies, transportation, or basic
living expenses (College Board, 2013b).
Despite the large amount of aid available, there is strong evidence
that qualified students are leaving money on the table--failing to
apply for aid that might help them persist to a degree, and in some
cases failing to apply for college at all because they assume they
cannot afford it. The college application decision is complicated
enough even for those who don't need financial aid--but for low-income
and first generation college students, it can be overwhelming. And in
all too many cases, students have little idea of what assistance they
might receive until after they have been applied and accepted to
college. This is like a car salesman only revealing a substantial
discount after a customer has committed to buying the car--the result
is that the discounts flow largely to those who were going to buy
regardless, while those for whom the aid would matter most walk away
before even learning the discounted price (Dynarski & Scott-Clayton,
2006).
Given the large amount of aid available, and the rapid increases in
Federal expenditures on Pell grants in recent years, it is reasonable
to ask what effects all of this aid has on college access, as well as
how programs can be modified to work better. I would advocate strongly
against efforts to reduce Federal financial aid; now is hardly the time
to reduce our investments in education as the United States falls
behind other countries on measures of educational attainment and social
mobility and leaps ahead on measures of inequality. But whatever the
level of funding for Federal aid, the stakes have never been higher to
ensure that every dollar spent has the maximum impact--not just for the
sake of taxpayers, but for the sake of students themselves, who make
the biggest investments of all.
ii. what do we know about the effectiveness of federal financial aid?
\3\
I draw five lessons from the available research on the effects of
financial aid:
---------------------------------------------------------------------------
\3\ This section of the testimony draws heavily upon a review of
the literature I coauthored with Susan Dynarski of the University of
Michigan, entitled, ``Financial Aid Policy: Lessons from Research,''
and published in The Future of Children, vol. 23, no. 1 (Spring 2013),
Princeton, NJ: The Trustees of Princeton University.
Money matters for college access.
Program complexity undermines aid effectiveness.
Students need more than just information, they need
individualized help.
Every program has incentives, and these incentives affect
outcomes.
While loans are unpopular they may still be an important
tool for access.
Lesson 1: Money Matters for College Access
The first and most fundamental lesson, grounded in more than 30
years of research, is that providing students with more money for
college does improve college access. As predicted by economic theory,
when students know that they will receive a discount, enrollment rates
increase. In 1988, Larry Leslie and Paul Brinkman reviewed several
dozen non-experimental studies and concluded that a $1,000 decrease in
net price was associated with a 3- to 5-percentage-point increase in
college attendance. Subsequent research using more rigorous empirical
methods and across several different contexts have found effects of a
similar magnitude, increasing our confidence that these effects are
truly causal and not just describing statistical correlations. The
grant programs that have been studied and found to have positive
effects include the Social Security Survivors Benefit (which in some
years, continued benefits for children beyond the age of 18 if they
enrolled full-time in college), some State merit-aid programs,
Washington, DC's Tuition Assistance Program, and the mid-century G.I.
bills. Evidence on the impact of Federal tax benefits is less
conclusive, but one recent study suggests that the enrollment effects
of tax-based aid may be of a similar magnitude. For more detailed
reviews of this literature, see Long (2008), Deming & Dynarski (2009),
and Dynarski & Scott-Clayton (2013).
Lesson 2: Program Complexity Undermines Aid Effectiveness
While financial aid clearly can influence college enrollment, this
does not imply that all aid programs are equally effective. For
example, the programs discussed above that have clearly demonstrated
positive impacts on college enrollment tend to have simple, easy-to-
understand eligibility rules and application procedures. The
eligibility and application rules for Pell grants--the Nation's largest
grant program--are comparatively complex, requiring students to submit
to the lengthy and burdensome Free Application for Federal Student Aid
(FAFSA) process for determining their eligibility. Though recent
efforts at simplification have reduced the number of questions on the
FAFSA from 127 to 116, the application remains longer than an income
tax form for the majority of U.S. households, and the eligibility
calculation remains opaque. Research by myself and co-authors has shown
that most of the data items in the aid application have little effect
on the distribution of aid, and that aid amounts can be replicated with
great accuracy using only a few pieces of information (such as adjusted
gross earnings and family size) that are readily available from IRS
records (Dynarski & Scott-Clayton, 2006; Dynarski, Scott-Clayton, &
Wiederspan, 2013).
A recent experimental study by Bettinger, Long, Oreopoulos, and
Sanbonmatsu (2012) provides dramatic evidence that the complexity of
the financial aid application process can itself become a significant
barrier to college access. In the experiment, some low-income families
who visited a tax-preparation center were randomly assigned to receive
personal assistance with completing and submitting the FAFSA. This
intervention, which took less than 10 minutes and cost less than $100
per participant, increased immediate college entry rates by 8
percentage points (24 percent) for high school seniors and 1.5
percentage points (16 percent) among independent participants with no
previous college experience. After 3 years, participants in the full-
treatment group had accumulated significantly more time in college than
the control group. They also were much more likely to have received a
Pell grant.
This experimental evidence, which demonstrates the importance of
program design and delivery, may help explain why studies have found
somewhat mixed evidence regarding the enrollment impact of Pell grants.
Studies by Hansen (1983) and Kane (1996) finding little effect overall,
while Seftor & Turner (2002) find positive impacts for adult students
and Bettinger (2004) finds some evidence of positive effects on
persistence for students who are already enrolled. While this evidence
is not conclusive, complexity and confusion surrounding the Pell
eligibility and application process may obscure its benefits and dampen
its impact among the individuals who need it most--those who are on the
fence about college for financial reasons.
Lesson 3: Students Need More Than Just Information, They Need
Individualized Help
An interesting aspect of the FAFSA experiment described above is
that it also randomized some individuals to receive an ``information-
only'' intervention instead of the full FAFSA application assistance,
but this information-only group experienced no increases in college
enrollment relative to the control group. This suggests that students
need more than information alone--they need assistance walking through
the application process. But many high schools and colleges,
particularly public institutions, are insufficiently staffed to provide
such support, with student-to-counselor ratios at public colleges as
high as 1,500 to 1 (Bettinger, Boatman, and Long 2013).
This lack of guidance has consequences for students' decisions
about whether and where to enroll. A substantial fraction of college-
intending students--high school seniors who graduate on time, are
accepted to college, and apply for financial aid--nonetheless fail to
matriculate in the fall, a phenomenon known as ``summer melt''
(Castleman & Page, 2013). Among the prospective students likely to
attend community colleges and for-profit colleges, evidence suggests
institutional choices are made haphazardly and many students fail to
investigate more than one option (Rosenbaum, Deil-Amen, and Person
2006). Studies have also found worrisome evidence of undermatching, in
which high school students from low- and middle-income families often
do not even apply to the most selective institutions for which they
academically qualify (Avery and Turner 2009; Bowen, Chingos, and
McPherson 2009; Hoxby and Avery 2012; Hoxby and Turner 2013; Roderick,
Nagaoka, Coca, and Moeller 2009).
Evidence is mounting that simple, low-to-modest-cost coaching
interventions that reach out to students during the summer after high
school and throughout the first year of college can have substantial
effects on enrollment and persistence. For example, in a series of
randomized experiments, Castleman, Page, and Schooley (2013) found that
text messaging, peer mentoring, and proactive outreach were all
successful at reducing summer melt, with costs of no more than $200 per
student served. In the Expanding College Opportunities (ECO) project,
Hoxby and Turner (2013) use data on SAT scores from the College Board
to target information packets and application fee waivers to a random
sample of high achieving, low-income students. Despite an average cost
of just $6 per participant, the intervention had substantial impacts on
the number of applications submitted and on the quality of institutions
actually attended (in terms of instructional spending and peer
achievement). Finally, a randomized study of a student coaching service
provided by InsideTrack (a for-profit company that contracts with
individual institutions) via phone, email, text message, and social
media interactions found significant impacts on persistence for a cost
of approximately $500 per student per semester (Bettinger and Baker
2011).
In addition to their modest cost, because these interventions are
largely based on phone calls and/or text messages rather than relying
on in-person meetings with a counselor they are more accessible for
students and potentially easier to scale up.
Lesson 4: Every Program Has Incentives, and These Incentives Affect
Outcomes
The available research gives reason to believe that students
respond to the incentives embedded in program rules. One example
includes a study I conducted of West Virginia's PROMISE scholarship,
which at the time provided free tuition and fees for up to 4 years to
academically eligible students as long as they maintained a minimum GPA
and completed 30 credits per year while in college. Interestingly, I
found that prior to the scholarship's implementation, a substantial
proportion of enrollees--even those near the top of the high school
achievement distribution--were taking only 12 credits per semester (24
credits per year), which corresponds to the Federal definition of
``full-time'' status but does not enable students to graduate on-time.
After implementation, the PROMISE scholarship increased 5-year
graduation rates by 4 percentage points and on-time graduation rates by
nearly 7 percentage points. Moreover, the achievement incentives were
an important mechanism driving these increases. The scholarship
increased credits completed in the first 3 years of college, but in the
fourth and final year of the scholarship--while students were still
receiving the money but no longer faced the course load requirements--
the program's effect disappeared.
These findings do not suggest that Pell should be a merit-based
program like the West Virginia PROMISE. In fact, the success of some
merit-based programs relies in part on the existence of a wholly need-
based program like Pell that serves as the foundation of financial
support. The fundamental mission of Pell grants has been and should
remain to provide financial access to higher education for
disadvantaged students, not to reward achievement.
Nevertheless, the Pell grant program should not--and cannot--avoid
incorporating incentives in its design and these incentives should be
structured to align with program goals. The current design actually
provides disincentives for timely completion by providing more
assistance for the same number of credits to students who take longer
to finish, essentially penalizing those who would prefer to finish
faster. This occurs because students are considered full-time,
qualifying for a full Pell grant, if they enroll for at least 12 credit
hours credits a semester. Those who enroll for 15 credit hours--the
average number necessary to complete an associate degree in 2 years or
a bachelor's degree in 4 years--do not receive additional funding. A
student who takes an average of 12 credits a semester over 5 years of
full-time study to complete 120 credit hours credits receives five full
Pell grants. A similar student who graduates in 4 years by taking 15
credit hours credits per semester receives only four full Pell grants.
Lesson 5: While Loans Are Unpopular, They May Still Be An Important
Tool For Access
A final lesson is that even though loans are unpopular, they are a
critical element in college financing, and their design might be
significantly improved to minimize students' repayment risks and better
communicate both risks and protections upfront. Very little rigorous
research has examined how the availability of student loans affects
college enrollment, performance, or completion. Susan Dynarski (2005)
found suggestive, but ultimately inconclusive evidence that student
loan expansions in the United States in the early 1990s led to
increased college attendance. Donald Heller (2008) reviewed the non-
experimental literature on whether loans increase college access and
concluded that college enrollments are not as sensitive to loans as to
grants. This is unsurprising, given that loans are not worth as much to
students. Nonetheless, since they also cost the government only a few
cents on the dollar to provide, it remains an open question whether
loans provide bigger, smaller, or the same ``bang for the buck'' as
grant aid does.
Debt aversion may be one important explanation for why loans do not
appear to affect access as much as grants do: some students simply
dislike being in debt, even when that debt enables an investment with
high average returns (Field, 2009). Given the widespread reliance on
student loans, a more interesting question than whether they increase
college enrollment and completion at all is whether some types of loans
are more effective than others. Are there ways to make loans more
attractive and less risky for students, without drastically increasing
costs? This is an open question, but unless it is answered, student
loans may remain primarily a financing tool for students who have
already decided to go to college, rather than a tool to promote college
access for students who are on the fence.
iii. high priority directions for reform \4\
I suggest four main directions for reform:
---------------------------------------------------------------------------
\4\ The first three proposals in this section draw heavily from a
recent white paper I co-authored with Sandy Baum, ``Redesigning the
Pell Grant Program for the Twenty-First Century,'' Hamilton Project
Discussion Paper 2013-04 (October 2013), Washington, DC: The Brookings
Institution.
Simplify the eligibility calculation, as well as the
application and renewal process.
Augment Pell grants with basic ``navigation'' support
services for program participants.
Align program rules to support college success, not just
access.
Restructure student loan repayments to make the enrollment
decision easier, not harder.
Proposal 1: Simplify the eligibility calculation, as well as the
application and renewal process
Pell awards for most students should be based on two data
elements that are available from the IRS: adjusted gross income and
family size, so that aid is easily predictable.
Pell eligibility should be automatically determined using
tax data, eliminating the need for a separate application.
Pell eligibility should be fixed for several years,
eliminating the need to reapply each year during a course of study.
Research cited above demonstrates that the complexity of the
Federal aid application process has significant costs, while providing
few benefits in terms of the targeting of aid. All of the complex
calculations that go into the determination of Pell grant awards are
unnecessary--research has shown that award sizes can be accurately
predicted using only a few pieces of information already available from
tax data. Thus, for most students, Pell awards should be based only on
adjusted gross income and family size, as measured by number of
Federal-income tax exemptions. Neither students' income and assets nor
the timing of siblings' enrollment in college would affect the amount
of aid awarded.
Simplifying the aid formula would enable the system to take
advantage of IRS data that the Federal Government already has,
eliminating the need for most students to submit a separate
application. I would further recommend basing eligibility on 3 years of
prior income data, rather than on just 1 year. Using average income
over a 3-year period serves two purposes: it provides a more reliable
estimate of a household's financial strength, and it limits the scope
for gaming by shifting income from 1 year to another. Finally, fixing
students' Pell eligibility for multiple years would greatly reduce the
financial uncertainty students face when beginning a postsecondary
program. It also eliminates the problem that many students simply fail
to reapply for aid each year.
How could all of this work? Dynarski & Scott-Clayton (2007), Baum &
Scott-Clayton (2013), and other groups have provided possible roadmaps
for simplification along these lines. For example, when young people
reach the age of 17, Pell grant eligibility could be automatically
calculated based on their parents' tax returns for the prior 3 years.
This automatic calculation and notification could be authorized by
including a check-off box on income tax return forms that would give
the IRS permission to forward the relevant tax information to the U.S.
Department of Education (ED). This would enable families to be informed
of Pell grant eligibility approximately a year before students graduate
from high school.
The Pell eligibility set at age 17 would be valid until the student
automatically becomes an independent student at the age of 24. An
appeals process would allow the program to adjust awards based on
unusual changes in family circumstances. Young independents--those who
are 23 or younger but classified as independent, most commonly because
they have children or are married--would under this proposal
automatically retain any eligibility they would have as dependent
students until age 24, but could choose to apply instead as independent
students.
Students enrolling at age 24 or older would submit a brief
application allowing the IRS to forward data to determine eligibility.
Students would be eligible if their average income over the past 3
years was lower than an amount set in relation to the poverty level. If
eligible, they could receive adequate funding to complete their degrees
for 5 years or until they left school and/or completed the program in
which they enrolled, whichever comes first.
Those not required to file taxes would provide simple income
information to ED on a 1-page form to show eligibility when they are
ready to apply to a postsecondary institution.
Proposal 2: Augment Pell Grants With Basic ``Navigation'' Support
Services for Program Participants
Provide dependent Pell grant recipients with a basic
college coaching service from the time of initial FAFSA application
through the first year of enrollment.
Encourage, and eventually require independent Pell grant
recipients to meet with a third-party ``navigator'' before enrolling in
a program.
Experiment with voluntary pilot programs before scaling
up.
The evidence discussed above demonstrates that students need more
than just better information about financial aid and the college
application process more generally: they need pro-active and
personalized assistance. Providing information about college quality
and costs on a Web site is insufficient because many students will
never visit it, and those that do may be unable to interpret how
generalized information applies to their specific case.
The importance of providing program participants with access to
``navigators'' is already recognized by other complex Federal programs.
For example, several States run State Health Insurance Assistance
Programs (SHIPs) to provide personalized guidance to Medicare
beneficiaries to ensure that they receive ``accurate, understandable,
and objective information, counseling, and assistance--on a wide range
of health insurance issues'' (HAPNetwork.org, 2010).\5\ More recently,
the Centers for Medicare & Medicaid Services (CMS) awarded $65 million
in ``navigator cooperative agreements'' to entities that will help
consumers in new Federal and State health insurance marketplaces
``prepare electronic and paper applications--provide outreach and
education to raise awareness--and refer consumers to health insurance
ombudsman and consumer assistance programs when necessary'' (CMS,
2013).\6\ Deciding where to go to college and how to pay for it are
equally complex decisions, and Pell grant recipients should not be left
on their own to figure it all out.
---------------------------------------------------------------------------
\5\ http://www.hapnetwork.org/about/about-ships.html.
\6\ http://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-
Insurance-Marketplaces/assistance.html.
---------------------------------------------------------------------------
A recent proposal coauthored with Sandy Baum (Baum & Scott-Clayton,
2013) recommends using a portion of the funding for the Pell grant
program to fund proactive outreach and basic guidance services for Pell
grant recipients. An investment on the order of 5-10 percent of current
Pell funding ($2 billion-$4 billion) could support meaningful and
effective additional services for new recipients. Research evidence
described above has found that relatively low-cost outreach and
coaching services, ranging from $200 to $1,000 per student, can have
substantial impacts on the actual enrollment of students who apply to
college, as well as persistence through the first year.
What might these services look like? I suggest some options here,
but it is essential that the Federal Government support the evaluation
of test programs and sites before implementing detailed program
provisions. One simple and low-cost reform would be to use the phone
numbers and email addresses provided on the simplified Pell application
form to send automatic messages with timely information and links to
additional sources of support. The simplified Pell form could include
an opt-out box for individuals who decline these communications. Since
eligibility would be determined automatically at age 17 and fixed until
age 24, ED could reach out even earlier by mail to individuals to
notify them of their eligibility (much as the Social Security
Administration periodically mails estimates of Social Security
payments), and to remind them of this eligibility periodically if they
decline to enroll immediately.
Services that are more sophisticated and personalized could be
contracted out by ED. Adult students, for example, are harder to easily
reach out to in advance because they often do not apply for financial
aid until at or even after the point of enrollment; unlike younger
students they may not be able to rely upon family or high school
support staff for advice. They may have the most to gain from talking
with a third-party guidance counselor one-on-one, either on the phone
or in person, before and after the enrollment decision. Baum & Scott-
Clayton (2013) suggest that existing One-Stop Career Centers might be a
place to provide such services. But a number of private organizations,
both nonprofit and for-profit, have also emerged nationwide to provide
similar services either directly to students or through contracts with
institutions; these organizations could apply to provide services to
Pell recipients.
Proposal 3: Align Program Rules To Support College Success, Not Just
Access
Extend the prorating of Pell grants so that ``more-than-
full time'' students receive larger grants, allowing students to
progress at their own pace and to be funded for more than two full-time
terms over an academic year.
Cap the number of credits that can be covered over the
lifetime, instead of capping the years of full-time funding provided.
While the focus of the current hearing is on college access, it is
difficult to separate issues of access and success, and it is clear
that achieving the former goal may not always guarantee the latter.
Supporting student success does not mean changing the fundamental
nature or purpose of Pell as a need-based rather than merit-based
grant. It simply means we need to acknowledge that program rules always
create incentives of one kind or another, so we ought to ensure at a
minimum that those incentives don't work against important program
goals.
Along with Sandy Baum, I have proposed that Pell grants for all
recipients should be based on the number of credits attempted (Baum &
Scott-Clayton, 2013) rather than fixing the maximum award for students
completing 12 or more credits per term. Pell grants are already
prorated according to credit load for students attending less than
full-time (fewer than 12 credits per semester) but not for students
attending more than ``full-time'' (more than 12 credits), even though
the Federal definition of full-time does not enable students to
graduate on time. This aspect of Pell design essentially penalizes
students who would like to complete a bachelor's degree in 4 years or
an associate degree in 2 years. For example, a student who completes 24
credits per year could receive five full Pell grants to cover their
college degree, while a similar student who completes 30 credits per
year and thus graduates in 4 years will receive only four full Pell
grants.
A system that funds students according to the number of credits for
which they are enrolled would provide additional dollars to students
whose schedules are designed with this goal in mind. Moreover, this
proposal would reinstate the benefits of the short-lived summer Pell--
which was introduced in 2010 and then discontinued in 2012 due to
Federal budget constraints and the notion that students were
``overloading'' on courses and ballooning program costs--with an
important additional protection against overuse. Capping lifetime Pell
awards at a fixed number of credits means that students who accelerate
will have fewer credits available in future years, so there is no
incentive for institutions to simply inflate credits or for students to
take more credits than are necessary for the degree.
Proposal 4: Restructure student loan repayments to make the enrollment
decision easier, not harder
Remove repayment risk by defaulting all students who take
loans into an income-contingent loan repayment plan.
Ensure that students understand the loan repayment process
upfront, so that they are not afraid to take advantage of this
important tool for access.
The focus of today's committee hearing is on the ``front end'' of
college access, and we often think of student loans as being an issue
at the other end of the process, as students leave college with
increasing levels of debt. But this is precisely the problem with
student loans--too many students (and policymakers) view them as a
burden to be dealt with on the back end rather than as a potentially
powerful tool for increasing access at the front end. Indeed, to many
students, loans hardly feel like a form of college aid at all; counter-
intuitively, a loan which is meant to help students afford college may
instead feel like a disincentive to enrollment.
Students' discomfort with student loans, as they are currently
designed, is understandable. As Dynarski and Kreisman (2013) point out,
the default loan repayment plan asks students to pay back their student
debt over a 10-year period right after college, when earnings are
lowest and most variable, creating non-trivial repayment risk.
Moreover, the current provisions intended to protect students against
default (including loan deferment, forbearance, and existing income-
based, income-contingent, and extended loan repayment plans) are
themselves so complex that many students at risk fail to take advantage
of them before they get into repayment trouble.
Dynarski and Kreisman (2013) have proposed defaulting all student
borrowers into an income-contingent repayment system that would collect
repayments as a proportion of income automatically through the tax
system. The repayment period would extend up to 30 years, or until the
loan is paid off, whichever comes first. If students knew before
enrolling in college that they could take a student loan without having
to worry about crippling loan payments after graduation, student loans
might be a much more effective tool for promoting access than they
currently are.
iv. conclusion
Federal student aid, particularly the Pell grant program, are at
the foundation of our Nation's efforts to increase college enrollment
and attainment. Given the stakes involved--for both students and
taxpayers--it is essential that every dollar of student aid be used as
effectively as possible. The reforms suggested above are research-based
and have the potential to substantially improve the impact of Federal
investments in postsecondary education. Thank you again for the
opportunity to provide these comments to the committee. I look forward
to your questions.
References
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torrent_ssq_final_manuscript_-_02-06-13.pdf.
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Forgotten Summer: Does the Offer of College Counseling the Summer
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page_schooley_-_the_forgotten_summer_-_july_2013.pdf.
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Policy: Lessons from Research.'' In Future of Children vol. 23, no.
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``Simplifying Tax Incentives and Aid for College: Progress and
Prospects,'' in Tax Policy and the Economy, Volume 27, University
of Chicago Press.
Hansen, Lee W. 1983. ``The Impact of Student Financial Aid on Access.''
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Heller, D.E. (2008) ``The impact of loans on student access,'' in Baum,
S., McPherson, M., & Steele, P. (eds.), The effectiveness of
student aid policies: What the research tells us (pp. 39-68), New
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Hoxby, Caroline, and Christopher Avery. 2012. ``The missing ``one-
offs'': The Hidden Supply of High-Achieving, Low Income Students.''
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Discussion Paper No. 12-014. Stanford University, Stanford, CA.
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Ever: Two Decades of Experience with Pell Grants.'' In Who Chooses?
Who Loses? Culture, Institutions and the Unequal Effects of School
Choice, edited by Bruce Fuller, Richard F. Elmore, and Gary
Orfield. New York: Teachers College Press.
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Admission: From College Access to College Success. New York:
Russell Sage.
Scott-Clayton, Judith. 2011. ``On Money and Motivation: A Quasi-
Experimental Analysis of Financial Incentives for College
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Seftor, Neil, and Sarah Turner. (2002). ``Back to School: Federal
Student Aid Policy and Adult College Enrollment.'' Journal of Human
Resources 37 (2): 336-52.
The Chairman. Thank you very much.
Now we'll turn to Ms. Conklin. Please proceed.
STATEMENT OF KRISTIN CONKLIN, FOUNDING PARTNER,
HCM STRATEGISTS, WASHINGTON, DC
Ms. Conklin. Thank you, Chairman Harkin, Ranking Member
Alexander, and members of the committee, for this opportunity
to discuss how simplifying Federal aid can help more students
access college and earn the credential they need. My name is
Kristin Conklin. I am a Pell grant recipient and a first
generation college graduate.
Because of the education I received, I am the first in my
family to start a business and create jobs. I am here to share
the work led by HCM Strategists, a public policy and advocacy
consulting firm.
For millions of students, financial aid clears a path to
the American Dream. If I can leave you with one point, it is
that simpler is better. Simpler is the best way to increase
student access and completion and more efficiently spend the
billions of dollars we invest in financial aid.
Simpler requires a holistic look at all programs. This can
be accomplished with a blank slate approach to reauthorizing
the Higher Education Act next year. After decades of tinkering,
we have four different grant programs and five different loan
programs, each with different eligibility criteria, different
lengths of time a student can receive funds, and different
repayment terms.
The average student completing the FAFSA answers 61
questions. No wonder nearly 2 million students who are eligible
for Federal financial aid never even apply. We can do better.
This January, HCM released the American Dream 2.0 report.
The report is a product of a diverse coalition of leaders,
including Mark Morial of the National Urban League; former
Governor Mitch Daniels of Indiana; Robert Reischauer, former
head of the Congressional Budget Office; President Eduardo
Padron of Miami-Dade College; and my fellow witness, Kim Cook
of NCAN.
The report received coverage from the New York Times and
over 280 media outlets due to three overarching
recommendations: No. 1, make the aid process simpler and more
transparent; No. 2, spur innovations in higher education that
can lower costs and better meet the needs of today's students;
and, No. 3, ask institutions, students, and States to share in
the responsibility for producing more graduates.
The technical panel of experts HCM led went a step further
by offering specific recommendations needed to deliver on the
coalition's recommendations. Its report, Doing Better for More
Students, includes the most comprehensive modeling of options
and impacts of any recent Federal financial aid report. Our
principal recommendations: students, families, and taxpayers
would be better served with one grant, one loan, and one tax
benefit.
Through pilot testing over the last few years, we know it
is possible to give students an instant notification of their
award level with a simple smart phone app. But Congress will
need to radically simplify the needs analysis in order to make
this vision a reality.
We propose reducing needs analysis to four variables.
First, if you receive Federal means-tested financial
assistance, you are automatically eligible for a Federal
financial award. Two other variables, adjusted gross family
income and family size, would be retrieved from the IRS.
A final variable would apply to students with more complex
financial situations. Information could be automatically
retrieved from the IRS schedules that their family submits.
According to the Urban-Brookings modeling HCM commissioned,
these commonsense changes can save between $37 billion and $73
billion over 10 years.
We also call for a single loan program with higher annual
aggregate and borrowing limits for students--for
undergraduates, $8,750 a year and $35,000 total; for graduate
students, $30,000 a year and $90,000 total. Savings from this
simplification are projected to be $38 billion over 10 years.
For both the single grant and loan programs, we recommend
shared responsibility for college completion. To get a maximum
annual grant or loan, students should complete 30 credit hours
or the equivalent, enough to finish a bachelor's degree in 4
years or an associate's degree in 2 years. For colleges, we
recommend adding measures of equity and success to
institutional title IV eligibility. Ten year savings are
projected to be $39 billion.
Public opinion supports an emphasis on completion and
simplification. Last year, HCM commissioned Hart Research
Associates and the Winston Group to survey voters. They found
84 percent of voters agree that earning a degree or credential
is very important. Ninety-five percent of African-American
parents and 97 percent of Hispanic parents agree. More than
three in five voters think that streamlining is a good
approach.
What can we expect from these changes? More students will
see that college is possible. Under matching can be reduced by
giving students an actual award amount when they apply for aid
and by steering them away from institutions that fail to meet
minimum performance expectations.
Lifting the 24 credit cap per year on financial aid will
mean more students can progress faster and pay less tuition.
Savings can be found to increase investments in the Pell grant.
Thank you for allowing me to speak on this important topic.
I appreciate this committee's leadership, and I look forward to
your questions.
[The prepared statement of Ms. Conklin follows:]
Prepared Statement of Kristin D. Conklin
summary
Kristin Conklin will address her work with The American Dream 2.0
Coalition and a technical panel HCM convened, which recommended ways to
put student success at the center of Federal financial aid investments.
Her testimony will call for one grant, one loan, and one tax benefit
program, with new incentives to promote innovation and student success.
With over 60 questions on the FAFSA, four different grant programs
and five different loan programs, as many as 2 million students never
even apply for student aid. Conklin will testify to the following
recommendations:
Create one grant, one loan, one tax benefit--Simplify
financial aid with a single Federal grant program and a single loan
program. The current system has four different grant programs and five
different loan programs--each with their own criteria, standards,
lengths of time, and repayment terms. Consolidate all household-based
tuition and fee tax credits and deductions into one Lifetime Learning
Credit.
Promote shared responsibility for completion--For
students, this means making college more affordable by removing the 12-
credit per term cap that currently is on maximum Federal aid awards and
prevents lower-income students from completing their credentials on-
time. For institutions, this means maintaining minimum levels of
student access and success with a set of balanced metrics.
Fund demonstration programs--The Federal Government should
invest in demonstration programs that spur innovation and
experimentation.
The American Dream 2.0 coalition included such diverse national
leaders as Mark Morial of the National Urban League, Robert Reischauer,
former director of the Congressional Budget Office and president of the
Urban Institute, Eduardo Padron of Miami Dade College and Purdue
University president Mitch Daniels, former Governor of Indiana.
HCM's technical panel report, Doing Better for More Students,
includes the most comprehensive modeling of impacts and options of any
financial aid report, led by technical panel member Dr. Kim Rueben of
the Urban Institute. These reports, as well as others supported by
grants from the Bill & Melinda Gates Foundation to 14 other
organizations, can be found at americandream2-0.com.
Today, the economy places a premium on postsecondary credentials
and the skills these degrees represent. By 2018, 45 percent of all jobs
will require some type of college degree. Unfortunately, nearly half of
all students that start college fail to earn a degree within 6 years.
These changes will mean more students progress faster, requiring
fewer total years of support--and will have a higher likelihood of
completing a degree. Financial aid counselors will spend less time on
regulatory compliance and more time helping students succeed, and
savings can be found to continue support for the Pell grant for another
decade.
______
Thank you Chairman Harkin, Ranking Member Alexander and members of
the committee for the opportunity to discuss how simplifying Federal
financial aid can help more students access college and attain the
postsecondary credential they need today.
My name is Kristin Conklin and I sit before you today as a Pell
grant recipient and a first generation college graduate. Because of the
education I received, I am also the first in my family to start a
business and create jobs. I am here to share work led by HCM
Strategists, a public policy consulting and advocacy firm.
For millions of students, financial aid clears the path to the
American Dream. If I can leave with you one point, it is that simpler
is better. Simpler is the best way to increase student access and
completion and more efficiently spend the billions of aid dollars
currently invested.
Simpler requires a holistic look at all programs. This can be
accomplished with a ``blank slate'' approach to reauthorizing the
Higher Education Act next year. After decades of tinkering, we now have
four different grant programs and five different loan programs--each
with different eligibility criteria, different standards for
maintaining awards, differing lengths of time a student can receive
funds and different repayment terms. The average student completing the
FAFSA faces 61 questions. No wonder nearly 2 million qualified students
never bother to apply for aid.
We can do better. This January, HCM released the American Dream 2.0
report. The report is a product of a coalition of diverse leaders such
as Mark Morial of the National Urban League, Purdue University
President and former Indiana Governor Mitch Daniels, former CBO
director and Urban Institute CEO Robert Reishchauer and Eduardo Padron
of Miami-Dade College.
The report received coverage by the New York Times and 280 other
media outlets, due to the three overarching recommendations: (1) make
the aid process simpler and more transparent; (2) spur innovations in
higher education that can lower costs and better meet the needs of
today's students; and (3) ask institutions, States and students to
share responsibility for producing more graduates.
The technical panel of experts HCM led went a step further by
offering specific changes needed to deliver on the coalition's
recommendations. Its report, Doing Better for More Students, includes
the most comprehensive modeling of impacts and options of any recent
financial aid report.
Our principle recommendation: students, families and taxpayers
would be much better served with one grant, one loan and one tax
benefit.
Through pilot testing in the last few years, we know it is possible
to give students, parents and counselors a reliable, instant lookup
table powered by such commonplace technology as a smart phone app.
Congress, however, will need to radically simplify the needs analysis
to make this vision a reality.
We propose reducing needs analysis to four variables. The first
variable: If you receive Federal means--tested benefits, you are
automatically eligible for Federal student aid. Two other variables--
adjusted gross family income and family size--would be auto-loaded from
the IRS. A final variable would apply to students with more complex
financial situations; information regarding their assets can be
obtained automatically from IRS supplementary tax schedules. According
to the Urban-Brookings modeling HCM commissioned, these commonsense
changes can save between $37 and $73 billion over 10 years.
We also call for a single loan program with higher annual and
aggregate borrowing limits that students receive: for undergraduates,
$8,750 a year and $35,000 total; for graduate students, $30,000 a year
and $90,000 total. Savings from this simplification are projected to be
$38 billion over 10 years.
For both the single grant and single loan programs, we recommend
shared responsibility for college completion. To get a maximum annual
grant or loan, students should complete 30 credits (or the equivalent)
in a calendar year--enough to finish a bachelor's degree in 4 years or
an associate's degree in 2. For colleges, we recommend adding measures
of equity and success to institutional title IV eligibility. Ten-year
savings are projected to be $39 billion.
Public opinion supports an emphasis on completion and
simplification. Last year, HCM commissioned Hart Research Associates
and the Winston Group to survey voters. They found 84 percent of voters
agree that earning a degree or credential is very important. Ninety-
five percent of African-American parents and 97 percent of Hispanic
parents agree. More than three in five voters think streamlining is a
good approach.
What can we expect from these changes? More students will see that
college is possible. Undermatching can be reduced by giving students an
actual award amount when they apply for aid and by steering them away
from institutions that fail to meet minimum performance expectations.
Redefining full-time status for financial aid will mean more students
progress faster, requiring fewer total years of support--and a higher
likelihood of completing a degree. Financial aid counselors will spend
less time on regulatory compliance and more time helping students
succeed. Savings can be found to increase investments in the Pell
grant.
Thank you for allowing me to speak on this important topic. I
appreciate this committee's leadership and look forward to your
questions.
______
HCM--Attachment
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
doing better for more students--issue brief
In July 2012, HCM convened a small group of financial aid, tax and
higher education policy experts. The technical panel was charged with
examining the overall financial aid system and developing innovative
policy ideas that respond to the fiscal, economic and demographic
realities the Nation faces today. This brief summarizes the results of
their collaboration.
why does this matter?
The nation's financial aid system was built for a different age. In
1965, when the first significant Federal financial aid program began,
23 percent of Americans had a college degree. This attainment level was
sufficient to support a vibrant middle class. That economy and those
times are no more.
Today, the economy places a premium on postsecondary credentials
and the skills these degrees represent. By 2018, 45 percent of all jobs
will require some type of college degree, including certificates.
Unfortunately, nearly half of all students start college but fail to
earn any credential within 6 years; the outcomes are much worse for
African-Americans and Hispanics.
The financial aid system--its collective $226 billion in
investment--needs to be seen as part of the solution for a nation that
needs many more skilled graduates, a stronger middle class and greater
opportunity.
In size and scope, student financial aid is more important than
ever. Nearly half of all undergraduates receive a Pell grant. Revenues
from Pell grants pay almost $.20 on every $1.00 received by a college
or university in this country, ranging from 43 percent at 2-year public
colleges to 7 percent at 4-year private colleges. If current trends
continue with public colleges in several States, the percentage share
that Federal financial aid pays of total operating costs soon will
exceed what States pay.
It is time to modernize the financial aid system and align it with
today's economic and fiscal realities. The level of aid matters, but so
does its design and delivery, according to research. Known barriers in
how financial aid dollars are distributed hinder innovation and the
expansion of more cost-effective approaches to a quality postsecondary
education. A new survey of engaged voters confirms Americans are ready
for reform and open to conversations about ways financial aid can serve
more students, better.
Our Nation is Facing a Growing Crisis
Forty-six percent of college students do not earn any
credential within 6 years.
Sixty-three percent of African-American students do not
graduate within 6 years.
Fifty-eight percent of Hispanic students do not graduate
within 6 years.
a simpler, more effective federal aid system: one grant, one loan, one
tax benefit
FIRST, simplify financial aid with a single Federal grant program
and a single loan program accessed by means of a simpler application. A
new grant program would consolidate Federal support into a grant
designed to provide an open financial door to higher education and
focus on applicants with genuine need. A simplified loan program, with
universal income-based repayment, would be available for middle-income
students who do not qualify for grants, as well as to supplement grant
resources for low-income recipients.
For most students, application data for both the grant and loan
program would be directly imported from Federal-income tax data,
simplifying the process, making the total financial aid package and
terms of repayment more transparent, and reducing opportunity for error
or fraud.
One Grant Program
Make the enduring commitment to affordable access with a
simpler needs analysis and application process for all Federal
financial aid. Projected 10-Year Savings: between $37 billion and $73
billion.\1\
---------------------------------------------------------------------------
\1\ This assumes current take up rates, we eliminate campus-based
aid programs and it includes closing the current $44 billion current
projected shortfall. Our simplified formula saves $37 billion even if
we assume full take-up rate of eligible students.
Simplify the FAFSA, replacing much of the interface
with a pre-filled interface so low-income students can qualify
for the aid they need.
Offer a simple look-up table based on income and
family size so students can plan early and choose wisely.
Eliminate Federal campus-based aid.
One Loan Program
Streamlining the loan programs and reduce the complexity
in loan terms and repayment rates. Projected 10-Year Net Savings: $39
billion.
Create common annual and aggregate loan limits for
undergraduates and for graduates. Help mitigate price
insensitivity by setting these levels at a mid-point between
current levels for dependent and independent students.
Use a market-based interest rate.
Eliminate the subsidized loan program, which pays
interest that accrues during school, and move that subsidy to a
reformed income-contingent loan repayment that all students
participate in.
SECOND, simplify Federal tax benefits for higher education. The
single grant and loan program, as proposed, provides generous but
better-targeted financial benefits to all students. Making these
changes reduces significantly the need for the current tax benefits for
college tuition and fees. Further, there is little evidence that tax
credits and deductions have significantly affected higher education
outcomes, but their effectiveness could improve if they were better
targeted, better timed and better integrated into financial aid policy.
A single Lifetime Learning Credit, available for education and
including training that happens outside of a formal program (for
example, an assessment for credit for prior learning or proficiency in
a Massive Open Online Course, or MOOC), replaces the existing credits
and deductions.
One Tax Benefit
Consolidate all household-based tuition and fee tax
credits and deductions into one Lifetime Learning Credit. Projected 10-
Year Net Savings: $97 billion.\2\
---------------------------------------------------------------------------
\2\ The technical panel proposes eliminating the AOTC and moving
savings into an expanded grant program. For example, the savings from
consolidating the tax credits could be used to expand the size of the
maximum grant to $7,000. If a tax credit aimed at undergraduate
education is deemed essential, it should be non-refundable and be
structured more like the Hope credit, which was replaced by the AOTC.
Make any tax benefits permanent to better serve
---------------------------------------------------------------------------
students and families.
THIRD, promote shared responsibility for completion. For students,
this means making smart choices about schools to attend and upgrading
the definition of satisfactory academic progress--or what is required
to receive and keep a maximum award. Promoting intensive enrollment for
all students improves the odds of completion and focuses the size and
scope of the Federal aid investment in structured and accelerated
pathways that can work better for students who juggle work, family and
other commitments while attending school.
A set of balanced metrics can be used to create stronger
eligibility criteria for institutions receiving Federal aid. An
``Institutional Effectiveness Index'' can integrate measures of access
and equity, loan repayment and risk-adjusted completion rates.
Institutions would not need to perform strongly on all components of
the index to have a passing score. In fact, it would be unlikely that
they could do well on all. But they also could not get by with weak
performance in all or most components.
FOURTH, spend a portion of the Federal aid budget on demonstration
programs that spur innovation and experimentation.
This could include pilot programs such as: (1) a ``Pell-ready Grant
Demonstration'' in which students with family incomes within 250
percent of the poverty level who need remediation would receive a flat
award, for use at either traditional or nontraditional providers, with
incentives to both the student and institution for timely completion;
(2) a ``Competency-based Demonstration'' that would support students
and institutions pursuing competency-based (as opposed to seat-time- or
credit-hour-based) models of higher education; (3) a ``Performance
Contract Demonstration'' that would maintain Federal needs analysis and
a guaranteed Federal student award, but give institutions discretion
over how to allocate their Federal aid dollars in exchange for
successfully graduating higher numbers of low-income students.
Incentives for On-time Completion
Limit the number of credits borrowers can accumulate
before aid eligibility ends.
Provide incentives for students to make progress toward
completion within 100 percent of the time.
Increase the number of credits a student must take
per semester or year to qualify for the maximum, full-time
award. Projected 10-Year Net Savings: $39 billion.\3\
---------------------------------------------------------------------------
\3\ This assumes using existing FAFSA aid system and that \1/4\ of
students taking 12 credits will increase their courseload. The savings
are higher and more targeted to lower income students if the simplified
application is used.
---------------------------------------------------------------------------
OR
Give students a $7,000 maximum grant if they complete
at least 27 credit hours in a 12-month academic year. Projected
10-Year Net Cost: $86 billion.\4\
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\4\ This assumes using existing FAFSA aid system and that \1/4\ of
students taking 12 credits will increase their courseload. If the
simplified application is used, the expanded grant will save about $42
billion. Alternatively, it would cost $11 billion if eligibility is
expanded to 250 percent of poverty rate.
Work to define a set of metrics that can be phased in over
time to help determine institutional eligibility for Federal financial
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aid. A sample institutional Effectiveness Index could include:
a measure of access and equity;
loan repayment; and
input-adjusted completion rate.
Eliminate Parent PLUS and Grad PLUS loans, which have no
time or borrowing limit.
ending the paralysis: statement of the technical panel
The time for policymakers to consider fundamental improvements to
the Federal financial aid program is now. Forty-nine percent of engaged
voters believe the higher education system needs major changes or a
complete overhaul. When presented with arguments for and against
providing financial aid based on completion, 73 percent of engaged
voters surveyed believed this was a good idea.\5\
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\5\ Hart Research Associates in collaboration with HCM Strategists
and contributing partner The Winston Group. 2013. College Is Worth It.
http://hcmstrategists.com/americandream2-0/report/
FINALHartPublicOpinionResearch.pdf.
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At the same time, statutory provisions that offer important
benefits to borrowers and taxpayers will expire this year or shortly
thereafter.\6\ Most of the program authorities provided by the Higher
Education Act expire within 2 years.\7\ Policymakers must not let this
opportunity pass.
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\6\ Higher Education Opportunity Act of 2008 authorizes the
programs for 5 years (P.L. 110-315).
\7\ Some programs authorized through HEA can continue to receive
funds and operate 1 additional year after authorities expire through
the authorities provided in the General Education Provisions Act. 20
U.S.C. 1226a (P.L. 112-123).
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Our knowledge of how financial aid works and how it affects higher
education outcomes is imperfect, and the system as it stands has
largely evolved based on politics, ideology and available budgets
rather than evidence. The solutions we have outlined work from what
imperfect information we have, while remaining open to continued
improvement as our understanding advances. For that advance to occur,
we support improvements in descriptive data collection about aid
recipients and their results, as well as expanded experimentation with
a portion of the Federal aid budget to increase the knowledge base that
policymakers can draw upon in future reforms.
Forty-nine percent of engaged voters believe the higher education
system needs major changes or a complete overhaul.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The new College Score Card can help students, colleges and the
public make better, informed decisions. It can be improved if all
institutions receiving Federal financial aid collect and publicly
report for all students:
enrollment data, including full-time and various measures
of part-time and transfer;
tuition prices and other costs of attendance;
completion and graduate data, including student mobility-
adjusted persistence rates, graduation rates that consider
institutional mission, and time to degree by field of study; and
financial and data from State, institutional and third-
party sources.
hcm strategists' expert technical panel \8\
Dr. Steven E. Brooks, North Carolina State Education Assistance
Authority; Kevin Carey, New America Foundation; Kristin Conklin, HCM
Strategists (chair); Jason Delisle, Federal Education Budget Project,
New America Foundation; Dr. Tom Kane, Harvard University; Andrew Kelly,
American Enterprise Institute; Daniel Madzelan, retired, U.S.
Department of Education, Office of Postsecondary Education; and Dr. Kim
Rueben, The Urban Institute and the Urban-Brookings Tax Policy Center.
---------------------------------------------------------------------------
\8\ The work of this Technical Panel was supported by a grant from
the Bill & Melinda Gates Foundation to HCM Strategists (HCM) and the
analysis, advice and management of Lauren Davies, Terrell Halaska, Dr.
Kim Hunter-Reed and Dr. Nate Johnson.
The Chairman. Thank you all very much. Those were all very
stimulating statements, and your entire statements were also
very stimulating. We'll just start a round of 5-minute
questions now.
I'll start with Dr. Long about the barriers that remain
when it comes to accessing higher education. Again, as I've
repeated--and you sort of helped if you touched on this--high
achieving, low-income students are not enrolling at the same
level as their high-income peers. Many of those who do enroll
are under matching or attending institutions of lower quality.
Also, none of you mentioned this, but isn't this also a
problem with what we've revealed in our investigations on the
for-profit schools, where they go out and get a lot of young
people. It's easier to sign up. They can stay at home. They
don't have to pay all the costs of going to a college. But the
quality of the education they're getting is not very good, and
many of them drop out.
So have you thought about this issue in terms of how we
look at the for-profit sector out there of schools in terms of
access and quality?
Ms. Long. Absolutely. I think, as one of my other panelists
said, it's very important that we do weed out the schools that
are not serving students and not giving them a credential of
value. I think there are concerns, not just with the for-
profits, but with all institutions that when they present to
students what financial aid they're able to receive, it's not
clear. There's a lot of confusion about what's a grant and
what's a loan and what they are responsible for paying back. So
that is a concern, I think, for all institutions.
But something that we can learn that many of the for-
profits have been doing in reaching out to low-income students
is the fact that they do give assistance with things like the
FAFSA. They will try to give early estimates on eligibility and
invite students in, saying, ``We will make it affordable, and
we will help you over the barrier of filling out the form.''
I think this is a much larger issue than just the for-
profits. But it says that students do want training. They do
want to be able to improve their opportunities through
education if they receive assistance. Just like I talked about
briefly with my own research, when we provided assistance with
the form, we saw a huge increase in college access, and these
were students who were persisting.
It's not that they were unable to succeed in college. They
were not able to get over that barrier. And given the
complexity of the process and the lack of clear information, it
has very negative effects on where they're going and whether
they're going at all.
The Chairman. To all of you, the president has proposed a
college rating system initiative. Are you all familiar with
that? Could you please provide your perspective on how that
kind of increased transparency will help ensure access for
students, very succinctly, if you could?
Dr. Long.
Ms. Long. I think clear information about institutions that
are not giving credentials of value, as well as when it would
be inappropriate to take out large sums of money because of an
institution or the area of study, is absolutely important. We
need to send clear signals to help students make better choices
and avoid bad choices.
The Chairman. Ms. Cook.
Ms. Cook. Yes. We were pleased to be part of the open forum
on this very question yesterday. One of the things we brought
up was this consumer level information and the need for
students to answer some questions that are currently
unanswerable, like what are the outcomes for Pell grant
recipients. So we would encourage this system to look at the
information that's available to students and give them what's
most relevant for outcomes, particularly, as well as looking at
commitment to need-based aid for students.
The Chairman. Dr. Scott-Clayton.
Ms. Scott-Clayton. Yes. I think the idea of providing
students with more information is excellent. But the logic of
then taking that information and having the Federal Government
combine it into a single rating, I think, is misguided, because
the school that's best for one student is not necessarily the
school that's best for another. It's hard for even experts to
figure out how we should weight these different measures.
And, second, I would note that just providing the
information is no guarantee that students are going to know
where to find the Web site or know how to interpret it. So we
really need to have some of the more proactive outreach and
guidance services that are individualized and not assume that a
single rating is going to work for all students.
The Chairman. Ms. Conklin.
Ms. Conklin. Mr. Chairman, thank you for the question. When
I reflect back on the American Dream coalition, they endorsed
the idea of transparency. At the same time, they regretted that
the data we have is not sufficiently robust, measuring all
students. So they called for better data, and then they called
for testing before fully implementing an approach that would
use metrics to award financial aid.
The technical panel went one step further. They actually
proposed an institutional effectiveness index that would look
at three metrics--maintenance of equity, loan repayment, and
graduation rates--each of these were input adjusted. Again,
they noted that the data weren't currently available, and they
recommended this be phased in over many years, much like we
phased in the cohort default rate.
The Chairman. Thank you all very much. My time has expired.
Senator Alexander.
Senator Alexander. Thanks, Mr. Chairman. I have a point of
view on this, but it's not an ideological point of view. My
experience is that sometimes a consensus develops out there,
and the Congress, if it listens carefully, will sometimes
stumble upon the consensus and actually do it. And I think I
hear--well, let me see if I can go back to this.
Dr. Long, you were saying that with some help, the number
of students who need financial aid the most going to college
might increase by about 30 percent. Is that what you said?
Ms. Long. We were dealing with very low-income students in
Ohio and giving them----
Senator Alexander. But is it 30 percent?
Ms. Long. Yes, for the high school graduates that we
served----
Senator Alexander. And these are people who would be
eligible for the Pell grant. Well, we have 9 million Pell
grants, so that's 2 million or 3 million students. Is that
right?
Ms. Long. If we were to put it over the entire population,
I don't know that the effect would be 30 percent for everyone.
But for these very low-income students who were prepared for
college, that was----
Senator Alexander. Are we talking about hundreds of
thousands of students?
Ms. Long. Possibly, yes.
Senator Alexander. So we're talking about a large number.
Ms. Long. Also, out of that study, we realized we have
students who are in college who are leaving money on the table.
Senator Alexander. Well, let me keep going.
Ms. Cook, you said, if I understand you right, that if we
just reverse it, and if a student could find out first how much
money he or she could get, and then go to college, that would
help a lot in terms of students.
Ms. Cook. It would certainly support decisionmaking about
affordability.
Senator Alexander. Typically, now, you get admitted, and
then you go into some office, and they go through this
procedure, and you fill this out and all that.
Ms. Cook. Yes.
Senator Alexander. And there's a consensus about that,
isn't there, among most of you? That's two things. So one is,
with some help, a lot more students would go. And two is if we
reverse that process--now, a third consensus I think I saw was
that about all you need to know in a Pell grant is family
income and family size. Is that correct? Do all four of you
agree with that?
[Nonverbal Response.]
Senator Alexander. So then why do you need this? I mean, I
think that's what you're telling us, that almost every one who
qualifies for a Pell grant gets the full amount of $5,645. Is
that about right--most?
Ms. Cook. There are partial Pell grants, Senator, so it's
indexed, yes.
Senator Alexander. Right. But most people who are eligible
for a Pell grant end up getting the whole amount, don't they?
Ms. Cook. I would have to get back to you on that.
Senator Alexander. One of you wrote that in the New York
Times.
Ms. Cook. Yes.
Senator Alexander. That's not right.
Ms. Scott-Clayton. Many get the full amount, but I'm not
sure it's most.
Senator Alexander. Isn't the Pell grant worth about as much
at Harvard as it is at Nashville's Auto Diesel College?
Ms. Cook. The total amount? Your eligibility is the same at
whatever institution you may attend.
Senator Alexander. But if the community college costs less,
you can still get the money for room and board, and you end up
getting about the same.
Ms. Long. Yes, Senator, you are correct. Wherever you
attend, you get the same amount of Pell grant money.
Senator Alexander. And then you do have this issue about
assets. So if I'm a great grandson of a billionaire, and I'm no
count, and there's a worry that I might get a Pell grant--
didn't I read that some of you wrote that is not much of a
problem to deal with?
Ms. Conklin. In our report, sir, we recommended that you do
look at assets for people with complicated financial
situations. But, really, what you do is say, ``Did you file an
IRS schedule?'' That's a proxy for, ``Yes, I have a complicated
situation.'' The IRS can automatically retrieve that. It's not
an extra 60 questions.
Senator Alexander. So, basically, if you reverse the
process and say, ``We'll tell you earlier how much money you
can get, and then you can pick the college,'' and if you help a
student, particularly the lowest income students who we're
trying to help, and if you simplify all this process, a lot
more students will go to college.
And then you have some pretty remarkable numbers, Ms.
Conklin. The savings that you indicated with your one grant,
one loan proposals--you're talking about savings in the area of
$30 billion or something like that. And we only spend $35
billion a year on Pell grants. So we're talking about, just
with these four or five simple ideas, if I'm hearing it right,
pretty much of a consensus about ways to get a lot more
students into college, particularly those who need the most
help, and a way to save money so that we can pay for it.
I have one last question. I think we're going to spend over
the next few years about $41 billion to maintain the interest
subsidy for subsidized student loans.
Dr. Scott-Clayton, 80 percent of the students who have a
subsidized loan also have an unsubsidized loan. So my question
is would that $41 billion be better spent adding to the amount
of money available for Pell grants or lowering the interest
rate for all students who qualify for student loans?
Ms. Scott-Clayton. I would suggest that there be no
distinction between subsidized and unsubsidized loans, that
those subsidies do nothing to support college access. They
don't make college any cheaper for students at the front end.
They only affect loan repayments at the back end. So that's not
an effective use of those Federal dollars. Instead, that
savings could be rolled over into supporting grants at the
front end.
As far as the interest rate, there's a proposal on the
table by my colleague, Susan Dynarski, and Daniel Kreisman of
the University of Michigan which provides a very compelling
argument for how loan repayments could be reformed so that
loans are really a tool for college access and not something
that students see as a disincentive to enroll.
Senator Alexander. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Alexander. I hope we'll
have another round.
I have listed here Senator Murray, Senator Bennet, Senator
Murphy, Senator Casey, Senator Baldwin, Senator Franken.
Statement of Senator Murray
Senator Murray. Thank you very much, Mr. Chairman, and
thank you to our panel for a really interesting discussion.
I wanted to ask you about a topic near and dear to my
heart. Several years ago, I had a really outstanding student
from Seattle Pacific University. Her name was Brandy Sincyr.
She interned in my office. She didn't have her own bed until
she enrolled in college and lived on a campus. And I'm really
concerned about our homeless and foster youth and some of the
barriers that they face to accessing financial aid and
graduating from college.
These homeless and foster kids often struggle just to meet
basic needs, like getting a bed or finding food. They really
lack any parental care or adult support as they go through this
process. But we all know higher education is the best hope for
a better life.
Are any of you aware of any really good successful efforts
to improve college access and retention of these kinds of
vulnerable youth?
Ms. Conklin. Senator Murray, I can start with that. Thank
you for your question and for your interest in this population.
That's actually a population that's near and dear to the heart
of me and my partners at HCM Strategists.
We support Greater Expectations, an initiative of the
Virginia Community College system that identifies foster youth,
helps them apply for financial aid, helps them enroll, and then
provides them the guidance counseling they need so that they
stay enrolled. They get the support they need while they're in
school to help them try and complete a credential.
Programs like that really wrap full support services around
a very needy population. It's so important that we support it
personally. What I would say, though, is in this simplified
needs analysis that I've proposed, she should have immediately
been eligible for Federal aid. She shouldn't have had to fill
out a single form to get an EFC, to wait until she applied, to
wait to get a financial aid package. She should have known
immediately that she was eligible for a maximum. We owe her
that.
Senator Murray. Ms. Cook, did you want to respond?
Ms. Cook. Yes. I would add that this is obviously a
population of great concern with completion rates hovering
around 2 percent. We understand that and take that to heart.
Many of our programs do offer wrap-around social service
type supports that could seem small--but not small to these
students--that provide housing between semesters, helping them
buy a bedspread for their dorm, or even driving them to campus
to start the semester. So more and more of our programs realize
there are basic needs that need to be met in addition to the
financial aid navigation and more logistical pieces and are
providing those wraparound services.
One that I would mention, in particular, is an NCAN member
program in Syracuse, NY, called the On Point for College. I'd
be happy to followup with more information about their
services.
Senator Murray. Yes. I'd really like to hear about that.
I think this is a population that tends to get lost if we
don't really focus on it. I know too many parents who are
helping their kids fill out forms. These kids don't have a
parent to help them fill out the form. So I'd love to hear more
from any of you in followup.
I wanted to ask about summer Pell. Back in 2008, Congress
established the summer Pell as a way to help increase
completion. And, unfortunately, Congress eliminated that
benefit a few years later because of the higher cost than was
expected of that.
But that higher cost really said to me that it was needed
and people were accessing it. I've heard from a lot of colleges
in my State about students who are now failing to complete
their program because they work in the summer and those
dynamics that they run into.
Ms. Conklin, actually, you recommended the 12 credit-per-
term cap on Pell grants be removed. Under that proposal, would
students have the flexibility to get aid for additional credits
taken at any point during the year?
Ms. Conklin. Yes, ma'am, absolutely. They would have more
aid for more credits earned and actually be able to use that
grant throughout the year, a full year, 12-month calendar.
Senator Murray. Right. Does anybody else want to comment on
that?
Dr. Scott-Clayton.
Ms. Scott-Clayton. Yes. I also have a proposal with my
colleague, Sandy Baum, to do this as well. And it would enable
students to take up to 45 credits per year, year-round. Just
set the Pell amount on a per credit basis and let students
decide.
As far as the summer Pell being more expensive than
anticipated, we're going to be following that up to see what
the effect of that was. Maybe it saved some money a few years
down the line because those students were actually able to
finish their programs faster.
Senator Murray. So you'll be getting that information back
to us?
Ms. Scott-Clayton. It's ongoing research, so it's not going
to be immediate.
Senator Murray. All right. Good.
I have one other quick question. I know the administration
is trying to get some feedback now on their college rating
system where colleges would be judged on the value that they
provide. I have heard some concerns from my State that a rating
system could harm institutions that serve a large percentage of
disadvantaged students, like our community colleges.
Can anybody comment on how that rating system might affect
those institutions?
Ms. Long. I think one part of the rating system is going to
have to take into account peer institutions with similar
amounts of resources and student backgrounds to have some sense
of what is possible, given there are multiple challenges those
institutions are facing. We might also have a part of the
rating system actually exemplify and highlight institutions
that are able to serve low-income students and do well with
them.
Senator Murray. But that rating system needs to reflect
that value.
Ms. Long. Yes.
Senator Murray. I am out of time, but I really appreciate
it. Thank you.
Thank you, Mr. Chairman.
The Chairman. Senator Bennet.
Statement of Senator Bennet
Senator Bennet. Thank you, Mr. Chairman. First, I'd like to
say to the committee that we've had some experience along the
lines of what Dr. Long has said. In Denver Public Schools, we
created something called the Denver Scholarship Foundation, and
we put in every high school something called a Future Center,
which was designed solely to provide young people with
knowledge of other scholarships and to help them fill out the
FAFSA form. And we've seen the 30 percent increase that you're
talking about over the last several years, and it really has
made a material difference.
Following up on what Senator Alexander was asking, given
what you guys all said about the information that's required,
do we even need a FAFSA form, do you think? I mean, could we
get rid of it all together?
Ms. Conklin. Absolutely.
Senator Bennet. Is that the view of everybody on the panel?
Ms. Scott-Clayton. Yes.
Ms. Cook. Yes.
Ms. Long. Pretty much.
Senator Bennet. Senator Alexander asked the question, but
he didn't get an answer. So there's an answer. There's another
consensus. And I think it would be a worthy project for this
committee if we were able to actually get rid of that document.
Here's a second question for you about consensus. Ms.
Conklin talked about one grant, one loan, one tax credit. Is
that a shared view, too, or do others have a different opinion?
Ms. Long. I agree.
Ms. Cook. We believe as long as the resources are all
intact, that that doesn't take away from the total. We would
agree with that. We would add one nuance that we should
address, the tax credits, and look at the equity issues and how
they serve low-income versus high-income students.
Ms. Scott-Clayton. Yes, I think if you could do it, that
would be great.
Senator Bennet. So there's another great consensus--one
loan, one grant, one tax credit, but redesigned for the 21st
century. We had a panel a couple of weeks ago that was talking
about how the delivery of higher education needed to change and
how much innovation was required in the 21st century because it
was designed deep in the last century, maybe even the century
before that. And that's certainly true with respect to
financial aid.
Dr. Scott-Clayton talked about the importance of
acknowledging the fact, for instance, that people that are
going to college actually would like to go year-round, and
maybe our Federal aid program should recognize that. What other
things should we think about if we got to a place where we had
that simplification--one grant, one loan, one tax credit? What
other kinds of things would we want to reflect?
We've heard about credit hours today, I think, lifting the
cap. We've heard about summer, year-round school. What other
kinds of flexibility would you like to see?
Ms. Long. I think part of the issue is the mismatch, not
only in how education is delivered but the type of student
that's there. A lot of our aid system is built on the idea of
an 18-year-old who just graduated high school and is dependent
on their parents, when the majority of our students are older.
They may have dependents of their own.
We have veterans. We have students who are working full-
time while they're in college, and the need analysis does not
reflect that. It assumes that the income that you have now is
the income you're going to have while you're in college, while
we would actually prefer for the student to focus and finish
their credential as fast as possible.
Ms. Conklin. Senator Bennet, one of the ideas for
innovation that our technical panel recommended was something
called super waiver authority for States and systems. And here
is where you could have significantly more waiver authority
granted to States and systems that agree to a performance
contract with the U.S. Department of Education, much more than
they currently have under experimental sites authority.
It's really, frankly, the tool you'd need to build and
deliver on the promise that Governor Haslam in Tennessee wants
to be able to make to his citizens, that he made when he was
mayor of Knoxville, which is if you grow up in our State and
you're low-income, you can go to community college for free.
But to be able to do that, you need to be able to package aid
differently. And they'd like that flexibility to do it in
exchange for maintaining access and success.
Senator Bennet. So help me understand what that looks like.
Also, I think Dr. Scott-Clayton talked about changing the way
repayment is done, or one of you talked about that, and I would
assume that would be part of this, too.
In Denver, for example, when we created, through the
generosity of a couple there, the Denver Scholarship
Foundation, one of the things we said to students was in order
to be eligible for our grant, we need to see you apply for two
other scholarships, which leveraged huge amounts of money that
was going untouched by the students in Denver until we had that
incentive in there. So can you describe what that would look
like?
Ms. Conklin. It's as you described. It's trying to get the
State aid, institutional aid, and Federal aid working together
to put together a full package for low-income students so they
can go full-time and make that progress toward their
credential. It's putting power in the hands of the
institutional financial aid administrators who know the need of
the students best and letting them make those decisions.
But it's actually harnessing the power of your investment
in financial aid for R&D, because each of these States or
systems that get granted super waiver authority should
participate in a rigorous third-party evaluation so we can see
what the impacts are of the choices they make, and are there
lessons that we can then apply to the broader system.
Senator Bennet. Thank you, Mr. Chairman. My time is out.
I'm just very, very grateful for your holding this hearing.
The Chairman. Thank you, Senator Bennet.
Senator Casey.
Statement of Senator Casey
Senator Casey. Thank you, Mr. Chairman. Thanks for having
this hearing. We appreciate our witnesses' testimony and the
expertise and experience they bring to bear on these difficult
issues. I really wanted to focus on guidance and help along the
way, and I'm looking first at Dr. Scott-Clayton.
In your testimony, I'm looking at Lesson 3 entitled
``Students Need More Than Just Information, They Need
Individualized Help.'' And you say in that part of your
testimony, in a pertinent part, that, and I'm quoting, ``They
need assistance walking through the application process.'' And
then you go on to say,
``Many high schools and colleges, particularly public
institutions, are insufficiently staffed to provide
such support with student to counselor ratios at public
colleges as high as 1,500 to one.''
We, unfortunately, had an example of that in Philadelphia,
where at Central High School, because of cutbacks, they're down
to about 2,400 students having access to just two guidance
counselors. I just want to have you speak to that fundamental
part of the process.
Ms. Scott-Clayton. Thank you. I think Dr. Long's research
evidence on the importance of walking people through the FAFSA
is one thing. But it's not just the complexity of the financial
aid process. It's the whole process of choosing a school and
getting through all of the requirements to apply to that school
or program, not just financial aid.
I think there's a consensus that students need that
additional kind of one-on-one personalized help, and there are
a lot of organizations now that are trying to do that. But I
think the question is--there are so many studies now
demonstrating really shockingly large impacts of these very
low-cost--some low-cost, some moderate-cost--interventions. And
the question is how can we leverage the Federal financial aid
system to scale up those low- and moderate-cost guidance and
support services.
We have 9 million Pell recipients every year. We've got a
lot of organizations doing work on the ground. But how can we
help those organizations scale up to reach all Pell recipients
and potential Pell recipients.
Senator Casey. I was struck by, on the next page, where you
say, ``because these interventions are largely based on phone
calls and/or text messages than relying upon in-person
meetings.'' In other words, I guess some of the studies show
very low cost per student positive impact, even with something
as simple as a text message. Is that correct?
Ms. Scott-Clayton. That is true. There's a study of the so-
called summer melt phenomenon, which is when college attending,
college-qualified high school seniors have applied to college,
they've applied for financial aid, they've been accepted, and
they don't show up in the fall. There are interventions using
text messages and phone calls over the summer to reach out and
make sure students are following up and doing the things that
they need to do.
There are other services that might be more intensive that
would involve a one-on-one meeting. But I think the idea is
that there are many complex Federal programs that have already
recognized the need for this sort of guidance. Why are we just
kind of dropping Pell students with just a voucher and saying
that that's enough? They need more than that.
Senator Casey. Dr. Long.
Ms. Long. Yes, if I may. With simplification, if we made
the form easier and families didn't have to supply that
information, then all the community-based organizations working
in this area's job could be refunneled, retargeted on
understanding, sorting through the information, making better
choices rather than just getting over this form that we could
easily replicate with existing data behind the scenes in a much
easier way.
Simplification not only buys us students filling out the
form, but also makes it much easier to provide assistance and
counseling and help students to make better choices, because
then college access organizations don't have to sit down with
tax forms and spend all this time filling out 10 pages. They
can spend it on much more personalized counseling.
Senator Casey. Ms. Conklin, I know you said you were the
first in your family to go to college. Do you have any personal
insight into this or by way of your own research?
Ms. Conklin. You can see there's a fair amount of simpatico
among my colleagues here. But there's a colleague of Dr. Scott-
Clayton at Columbia, Kevin Dougherty, who has looked at States
that have adopted outcomes-based funding that puts student
success at the center of how the States spend their funding.
There's phenomenal and promising research out of Senator
Alexander's State of Tennessee that, basically, we see the
leadership, creativity, and innovation of faculty and provosts
to organize graduation pathways and use data analytics to be
able to provide the kind of counseling in college, not on the
side, but part of the academic experience. And their graduation
rates are climbing, but that's because 100 percent of the money
Tennessee spends is focused on student success.
Senator Casey. I'm out of time, but I'll submit a question
for the record as to what the Federal Government might do to
help. I realize it's not always the best way to go, to ask for
a Federal solution. But if we can be helpful, we'll submit that
question. Thank you.
The Chairman. Thank you, Senator Casey.
Senator Baldwin.
Statement of Senator Baldwin
Senator Baldwin. Thank you, Mr. Chairman and Ranking
Member, for holding this hearing and all of you for your
testimony. I want to focus in on the needs of nontraditional
students.
As we turn to access issues, I think it's even more
important that we're talking about how--older students,
returning adult students, and those who are very focused on a
trade or occupational certificate--these folks are faring in
the system.
Ms. Conklin, you mentioned--and you have statistics in your
report that you're sharing with the committee--that part-time
students now make up 38 percent of enrollment in higher
education, that only 15 percent of undergraduate students live
on campus, that 3 in 10 undergraduates work full-time, and 1
out of 4 have children. So I think we all know how these
nontraditional students have different needs in the system.
But I'm not sure that we're all clear on what in the
current system may not be working and what should be improved
for folks who are working full time and raising families and
want to complete a certificate or a degree in higher education
and be able to move ahead. I would love to hear all of our
witnesses' thoughts on two specific questions that I've heard a
lot of at home from stakeholders in my State.
The first is the aid-ability of certain vocational or
shorter term certificate programs. Just one quick example of
how current regulations aren't working for nontraditional
students is that students in short-term welding certificate
programs, who might only be taking a few credit hours--aid is
not available for them.
Those welding certificate programs certainly have--
certainly that occupation is in very high demand in my heavily
manufacturing State, and they're really able to help mid-career
Wisconsinites gain access to better jobs. What are your
thoughts on the lack of financial aid for students in these
programs, and how can we address that problem?
Ms. Long. I think the key issue here is going back to the
first principle of why we have financial aid. We're trying to
enable students to get education or training that is going to
be valuable to them, not only in the labor force, but for the
opportunities their families are going to have available to
them.
So in the example that you just gave, it's rethinking how
we define a credential or a set of courses or credits which may
not be a full degree granting program. How can we support those
kinds of investments that are valuable for the individual as
well as for the public?
Senator Baldwin. Any other comments?
Ms. Conklin. Senator Baldwin, thank you for the question.
HCM has had the privilege to work with your very strong
technical and community college system over this last year on
your outcomes-based funding formula. We've seen firsthand some
of the challenges they face as they try to help their
nontraditional student population succeed.
A couple of thoughts. The first is with radical
simplification, we're going to do away with terms that are very
confusing to nontraditional students--expected family
contribution. Even the distinction between independent and
dependent students, as you just identified with your stats,
isn't meaningful anymore--undergraduates, graduates. Trying to
get the terms exactly the same between those is very important.
We do propose--and this would help very much the short-term
training that you spoke about. Our one tax credit, basically,
is modeled on the lifetime learning tax credit. So up to
$10,000 is what we propose of expenses for short-term training
that could be used--it's a refundable credit--and it would be
able to pay for such things as prior learning assessment for
prior military service or work experience, for assessments if
you've taken a move, and also for these short-term training
programs. So that's one feature of our one credit proposal.
Ms. Scott-Clayton. I would just add on the guidance piece,
if we think about older, independent students who are no longer
connected to a high school, who may not have parents who can
help them with this decision, they desperately need access to
third-party, independent advice before they choose a program.
And right now, we can see that for-profits are helping to fill
that void. So in one of my proposals, this outreach and third-
party guidance would be available to those students before they
make their decision.
Ms. Cook. Senator, I would just briefly add that this is a
good example of where we see an intersection among different
areas of Federal policy that really are impacting college
enrollment. So we need to look at the convergence of workforce
issues and other acts that are similar but with the new economy
really coming together and becoming more interrelated.
Senator Baldwin. I see I'm out of time. Thanks.
The Chairman. Thank you very much, Senator Baldwin.
Senator Franken.
Statement of Senator Franken
Senator Franken. Thank you, Mr. Chairman, for this very
important hearing.
I apologize that I wasn't here for your testimony. I've had
two other committee hearings--one was a meeting--to be at. And
there's so much to talk about here.
Dr. Long, I read your testimony. You talk about going
through the process of financial aid, and you talk about the
early process and understanding the FAFSA application, et
cetera, and that's very, very important. You note that the
challenges do not end with the completion of FAFSA and college
applications, and you go on to talk about how difficult it is
for families to make apples to apples comparisons.
You just talked when I was here a little earlier about the
confusion between what's a grant and what's a loan. I have a
piece of legislation called Understanding the True Cost of
College Act. It's bipartisan with Senator Grassley and Senator
Rubio on it.
All it is saying is that there should be a uniform
financial aid letter where they use the same terminology. They
use the same terms so that a subsidized Stafford loan is called
a subsidized Stafford loan and not called an SS8107 so that you
actually know the difference between a loan and a grant so that
you can read that.
I've gotten reaction, not just from parents, but from
counselors. So how important do you think this is? Why do you
think this is important, or do you think it is? And anyone else
can chime in.
Ms. Long. I absolutely believe it is important. Thank you,
Senator. It is confusing when you get those letters. Just as an
anecdote, my babysitter got her financial aid letter, didn't
understand it, and brought it to me. I've been studying these
issues for over a decade, and I couldn't decipher what was a
grant and what was a loan. That's problematic, and it's not
just Federal aid. It's also State aid programs.
Senator Franken. And you're Dr. Long.
Ms. Long. I am. But I also knew to make some phone calls
and start asking some really hard questions. But you can
imagine that a first generation college student sees this as
confusing and doesn't feel empowered to try to find out this
information. It should be much more simple.
It should be a standardized letter that is very clear about
Federal, State, and institutional aid--what is a grant and what
is a loan. And then perhaps the institution could use the
bottom part of the letter to customize according to their
particular institution. But we do have to have understanding.
Otherwise, we can have the best programs in the world, but if
no one understands them, they're not going to be effective.
Senator Franken. Yes.
Ms. Cook. Senator, we were pleased to sign on as a
supporter of that legislation and fully support any efforts in
this financial aid shopping sheet or uniform financial aid
award letter. Students really need to be able to understand
what the offers are, (a), so that they can make their
affordability decisions, and, (b), as they might compare
different colleges and decide which one is most affordable to
them.
Senator Franken. Well, I think it's a very simple,
straightforward thing to do, to just make a uniform letter. I
like maybe what you're saying, Dr. Long, that they can
customize part of the letter at the end or something, but just
so they're using the same terms.
When you're hearing from college counselors and guidance
counselors at high schools, saying, ``Please do this,'' can you
imagine the parents having to go through--OK. Thank you. I got
that.
Also, I think it's really important that we have--you were
talking about personally walking through students on FAFSA and
on other stuff. That's why guidance counselors are so
important. And when you have a school that has one counselor
for every 800 kids, that's not fair to those kids, and those
happen to be those schools where they probably need it the
most.
Because of my time, I'm just going to ask an open-ended
question so it won't sound like I ate up the time. It'll sound
like you ate up the time, because that will be what happened.
[Laughter.]
But say we were to construct something like a competitive
grant program to States--Ms. Conklin, you talked about
Tennessee--States that are trying to design better outcomes.
That's the focus. The focus is better outcomes in terms of kids
getting into postsecondary education, making it as productive
as possible. The best outcomes is what you were talking about.
If you were to design a competitive grant program where
States would have to apply for it and say, ``This is what we're
going to do,'' what would be the criteria that you would look
for if you were going to write a--let's say someone who was--I
don't know--a member of the Senate wanted to write a piece of
legislation saying,
``We're going to do this, and we're going to have
some Federal funding for States, and they're going to
compete to get this funding to create a program to make
better outcomes in their State,''
like Tennessee is doing. How would you design that?
Ms. Conklin. Thank you, Senator Franken.
Senator Franken. And this is for everyone, and take your
time.
[Laughter.]
Mr. Chairman, I apologize.
Ms. Conklin. Mr. Chairman, is that all right?
The Chairman. Yes.
Ms. Conklin. Thank you.
Senator, what I would say is that I commend that you're
talking about putting student access to success at the center
of the Federal financial aid policies. I think you can use your
existing investments in Pell to accomplish what you're doing. I
don't think you need to create a whole new grant program. I
think it's about flexibility within the current Pell program,
accompanied by performance metrics and rigorous evaluation.
We lay out what that would look like in our technical
report, sir, and I'll followup with the exact pages with some
ideas.
But it's modeled on some of the work that's happened in the
U.K., where they've done some performance contracting,
something akin to social impact bonds. But, again, the idea is
don't create a brand new program. Use your existing Pell
authority, but create really kind of almost super waivers.
Ms. Cook. Senator, I'm happy to followup with more detail.
But I would ask that that program, obviously, have a commitment
to need-based aid that some States do not right now. That would
be a core piece for me.
Ms. Long. I agree with my co-panelists.
Senator Franken. Thank you.
The Chairman. That didn't take as long as I thought.
Senator Franken. Thank you for your indulgence, Mr.
Chairman.
The Chairman. If we have time, I'd like to go to another
round if we might.
Ms. Cook, in your written testimony, you stated that in
order to provide guidance to students about what school to
choose and how to look at schools--you have a whole list of
things here. You say students do not know the following: how
many part-time students graduate, how many Pell grant students
graduate, how many adult students graduate, how many military
students graduate, do students who transfer from another school
eventually graduate, do students get a job after they graduate.
I don't know if that is a comprehensive list or if you are
just suggesting that as part of it. But, again, the
administration has come out with a sort of suggested college
rating kind of system. Have you looked at that, and how does
that correspond with what you are suggesting?
Ms. Cook. We certainly have, Mr. Chairman. In fact, we
testified to that yesterday at the Department of Education
forum on the rating system. Unfortunately, that list that I
presented in my testimony is not exhaustive. They were just the
top questions that our members identified as issues of concern,
as students really struggle to say, ``How does a student like
me--what is my likelihood of succeeding at this college,''
which is the ultimate reason that we go to college, ``so we
need some more instruction and some more information
disaggregated for students like me.''
Unfortunately, many on that list are not even collected
right now. It's not even a question of we have the data, and
we're not making it available, and a rating system could. We're
really calling for reinvention of the data that's relevant to
students in this decisionmaking.
The Chairman. I guess what I'm concerned about is that as
we do away with FAFSA and get it down to one page, now we're
going to have a whole new form of information about college, a
whole laundry list of things a student or a family would have
to look at to decide whether or not they should go to a certain
college. I'm just wondering, again, if we are overloading a
system here where students and their families would just be
confused.
Ms. Cook. Mr. Chairman, I don't believe they would be
confused. I think it would be much appreciated. I think we know
from our experiences that college choice matters. Where a
student chooses to attend can have wide-ranging results and
completion rates for very similar institutions with the same
resources, the same enrollments, and the same profile of
students. We think it's very important that students and their
families, as well as older independent students, know what the
outcomes are at those colleges before they enroll.
The Chairman. Again, I want to ask this question also. You
pointed out, I think--one of you pointed out that only 15
percent of present students are first-time, full-time students.
Is that right, 15 percent?
Ms. Cook. Fifteen percent are full-time residing on campus.
About 50 percent are first-time, full-time.
The Chairman. Fifteen percent of students are living on
campus. About 50 percent are full-time. I don't know how many
people really know that data.
But I'm just wondering--you talk about these new students
that are older. They come in later on. That begs the question:
Is that because they didn't get access to college right away
when they graduated from high school? They weren't informed?
They didn't have the proper support system? So, therefore, they
went out, got a job, got married, and now, later on, they
realize that their horizons are limited because they didn't go
to college, and now they're applying to college.
Should we fix our access system to correspond more to the
reality that a lot of the students today are older? Maybe they
dropped out of college, or maybe they took a correspondence
course or something like that, and they want to get back in. Or
do we put more emphasis on just making sure that those students
who are in secondary school now have access to a college
education when they get out of high school so that we don't
have this present situation later on?
Ms. Cook. I understand. Briefly--and I'd like to yield some
time to my co-panelists--ideally, the answer would be both. But
right now, I think the most efficient way is to catch those
students when we have them in secondary school so that they
make that immediate transition.
Ms. Scott-Clayton. I would say that both of those are
absolutely essential priorities for Federal student aid.
However, one suggestion for simplification would be that Pell
eligibility could be fixed for younger students around the time
that they turn 17 based on their family income. That amount
could just be fixed for a period of 5 or 6 years so that if
they don't enroll immediately, they know that that aid is still
there, and we still have a good measure of who is low-income
and who is not. So students can know, even if they delay for a
year, that they can come back and that aid is still there for
them.
Ms. Long. And, Mr. Chairman, if I could interject, I think
we do want to change the emphasis from getting over a form and
filling out 10 pages to an emphasis on looking at actual
information to make choices. We are always going to have older
students who are going to decide they need additional training
and maybe they weren't ready at 18.
But also realizing those high school seniors--if you are a
low-
income student right now, looking at the figures for a first-
time student may not capture your potential experience. You
would want to see how this institution serves low-income
students, Pell recipients, other kinds of profiles. So we need
to broaden what information is being reported, because even for
many of our 18-year-olds, they don't see the kinds of data and
outcome that might be helpful to help them make their
decisions.
The Chairman. Thank you.
Do you have something to add, Ms. Conklin?
Ms. Conklin. Senator Harkin, maybe this again goes back to
my personal experience being a Pell grant recipient. But what
we do at the Federal level in investing in a need-based grant
that's portable is beautiful and works.
So we've suggested ways to simplify how you apply for it
and how you're eligible for it. And we're proposing some real
flexibility so that providers can change and respond to today's
student. I don't know if the grant itself needs to change. It's
that we want our providers to adapt.
We want them to be doing more competency-based education
for adults that rewards their military service and their work
experience, that let's them do self-paced learning, even at
home after the kids have gone to bed. We need to have more
flexibility on that and encourage that kind of innovation.
The Chairman. Thank you all.
Senator Alexander.
Senator Alexander. Well, I want to thank the chairman for
really assembling some folks who know what they're talking
about. I think this is very, very helpful to us as we look at
this.
To make sure that I understand this, we're really talking
about two different decisions here. The first decision is how
much money can I get, and the second decision is where do I
spend it in college. Isn't that right?
And the four of you are saying that the way our system is
set up, it's backward, and that there are a number of things we
can do to make students eligible earlier, to know how much
they've got in their pocket, and then they can choose a
college. So we don't want to get mixed up, I don't think, with
all these issues about what a college has to tell you, because
that doesn't necessarily have anything to do with how much
money I've got to spend, because I can spend it at the Diesel
College, or I can spend it at Harvard, or I can spend it at the
University of Minnesota or Tennessee.
So the question is: How much money can I get? How much are
you going to give me, and how much can I borrow? We operate
here, when we operate, by consensus. And we've done a pretty
good job of that on this committee. I'm going to ask you in a
letter following this if you will take the testimony that
you've given today and that you've written and answer two
questions. And I'm not looking for a long thing. I'm really
looking for a short list.
One is to identify the items about which you think there is
a consensus about the changes that need to be made in Federal
student aid. That's one. And then the second question is: Are
there any things that you think ought to be done about which
there's not a consensus? There may be some things that you
think are right that others think are wrong, and I think we'd
like to know both.
But the four of you have such a broad background and view
of Federal student aid that if you can identify the four or
five things about which there is a consensus, I think that
would be very helpful to us here, because that might mean we
could find one. It'll come from Senator Harkin and I, that's
the way it'll come.
You've suggested such things as reverse the process so we
know before, first, how much money and, second, before we are
admitted to college. You've suggested that there may be a
consensus that all we need to know from most students may be
family income and the size of the family for a grant. You seem
to suggest that maybe one grant, one loan, one tax credit might
save a lot of money.
You seem to suggest that allowing students to spend their
money for 15 hours rather than just 12 makes sense. At the
University of Tennessee, for example, in order to follow the
new State requirement that it's outcome-based, in other words,
you need to graduate in 4 years instead of going every football
season, which is what some people like to do, the University of
Tennessee at Knoxville is saying you're going to pay for 15
hours even if you take 12. That's their way of getting you
through in 4 years or 5 years.
Well, if that's the case, then our Federal aid ought to
reflect that State decision to try to encourage outcomes. We've
had testimony that--the summer Pell grant--Senator Clinton and
I worked on that. We all did, and it went away.
But that doesn't make any sense not to let the Pell grant
be available year-round, because that would save money. It's
been testified that Dartmouth saves $10 million a year just by
requiring its undergraduate students to go one full summer. And
we all know that if university facilities were used more, that
could save other dollars, maybe not Federal dollars. So there
is another example of that.
And then the other area I want to go into is--and I'll go
back to Ms. Conklin--I want to make sure I understand the size
of the savings that you're talking about. You're talking about
a lot of money if we make these changes. We started out talking
about if we help students with the process, a lot more students
would go, so that raises the question of how we pay for it.
But you're talking about $37 billion to $73 billion over 10
years from one change, $38 billion from a single loan program,
$39 billion for another change. There's $41 billion that we
spend on subsidizing student loans that if we didn't spend it
on that, we could use it for something else, like reducing
interest rates or Pell grants.
Am I exaggerating the size of the savings here, Ms.
Conklin, or--I mean, we spend only $35 billion a year on Pell
grants. You're talking about savings that, cumulatively, might
add up to, the way I read it, $80 billion to $100 billion over
10 years. Am I misreading this?
Ms. Conklin. Those are estimates prepared for us by Urban-
Brookings and the New America Foundation. The New America
Foundation's loan estimates, for instance, are derived from
CBO. So we have a relative amount of confidence in those
estimates. What we do is we lay out in our table a number of
ways to reinvest, as Congress would choose.
We suggest that there's a larger Pell max for students who
take more credits. We suggest higher loan limits for
undergraduates and graduates who pay into a program where the
subsidies are on the back end. By and large, the most savings
are derived, indeed, sir, on the tax side. But simplifying the
tax benefits is a source of significant savings.
Senator Alexander. Well, thank you. So you'll be getting a
letter, which I hope isn't an imposition. And--to reiterate,
Mr. Chairman--what I'm thinking is that question one will be to
just list--you don't have to explain them all--the areas about
which you think there is a consensus about reforming Federal
student aid. And question two is: Are there any other things
you think ought to be done, in your view, but about which there
may not be a consensus?
Then I guess we can come to the decision ourselves about
whether we still need this kind of form, or whether we can
start from scratch and create a different system and do a
better job of achieving our shared objective.
Thank you.
The Chairman. Fair enough. Again, on the full-time Pell, I
know we went through this a couple of years ago, 3 years ago,
or something like that.
Senator Alexander. More than that.
The Chairman. It was just a couple of years ago. And the
fact is, under our unique scoring system by the Congressional
Budget Office, cutting out summer Pell saved us a lot of money.
I've been trying to get it back in, but it costs money, and we
don't have that in our budget. So that's a problem we face.
Senator Alexander. Well, she's suggesting lots of ways to
find some money.
Ms. Conklin. We found you some money, sir.
The Chairman. If you know how to get around CBO scoring,
please let me know, because it's been very frustrating for me.
Senator Franken.
Senator Franken. I want to throw out a question about the
role of community and technical colleges in college
affordability. It seems to me that I've noticed that in this
country, we have something of a skills gap. That's a term of
art for, basically, jobs that could be filled like that if
there was someone with the right skills. And the estimates are
about 3.5 million jobs.
I've seen partnerships between businesses and community and
technical colleges to train people--sometimes it's a
credential--and train people up for these jobs and fulfill a
number of needs. And then I've seen these businesses take
someone who has just got a credential course--not just, but has
gotten a credential course--to start to work for them, and
they're really good, so they send them back to get their
associate's degree.
And then they're really good, and they come back to work,
and they send them back to the University of Minnesota to get
their bachelor's degree while they're working. And at the end
of the whole thing, they've got a couple of degrees, they've
got a good paying job, and they have no college debt.
That seems to me like it could be an important piece of
addressing a number of things. No. 1, it gets people jobs. And
No. 2, it gets American businesses, especially manufacturing,
IT, healthcare--it fills the skills gap. It gets them skilled
employees that they need in order to compete and compete
globally. So it feels like it's kind of a win-win-win
situation, and I just want to hear any thoughts about where the
role of community and technical colleges--what role that plays
in college affordability.
There seems to be a bias among some parents in this country
that a 2-year education is a ceiling, whereas in other nations,
it's more seen as a platform that you're going to be getting
continuous education during your 40 or 50 years in the
workforce anyway. Technology is accelerating so fast that the
idea that you won't be having to go back to school or that
you'll be doing the same sort of task for the next 50 years of
your career is kind of a silly notion.
Do you have thoughts on the role of community and technical
colleges toward college affordability?
Ms. Scott-Clayton. I will jump in on that. They're
absolutely essential. You're right. And a lot of people have no
idea how affordable they really are. The average price of a
community and technical college, after accounting for grants,
is negative, meaning that, on average, students pay nothing for
a college education at one of these institutions. They get
money back to be able to help pay for books and supplies and
other expenses.
On the other hand, I think it's also important to note that
these institutions are struggling with resource constraints
right now. And I think the partnerships that you talk about
with local businesses are a great way to help expand the
capacity of these institutions. But it's also kind of a sign
that they really are supply constrained, and those partnerships
are likely to spring up in fields where there is kind of an
obvious return to that industry in the local area.
But it may work less well for industries where there's a
great social payoff but not as high of a private payoff.
Nursing programs in many places face huge waiting lists for
students to be able to get access to those programs, even
though we know----
Senator Franken. Healthcare is an area where this is also
the case. There is a skills gap.
Ms. Scott-Clayton. So I think it's a critical piece, and we
need to help those institutions be able to expand their
capacity.
Ms. Long. I also very much agree that these are important
institutions and students would benefit from them. Not to
repeat what my co-panelist said, I think an issue is for older
adults who might really benefit from these programs, they don't
know that they exist. There is an information problem here, and
they don't have high school guidance counselors they can go to.
So doing more to produce the information and highlight
what's available through these institutions--this is oftentimes
why we see students going to for-profits who have commercials
and marketing and everything everywhere. But these technical
institutions don't necessarily have the resources to do that.
But I think we also have to be much more proactive in
reaching out to potential adult students where they work, where
they live, rather than expecting if we build a Web site,
they're going to come to us and figure this out. Going out into
communities and in our work, working with the FAFSA, we met
families as they were trying to get their taxes done, and many
of them weren't expecting that they were going to get their
financial aid done and were so glad that this happened to be
convenient and where they were working rather than a come-to-us
model.
Senator Franken. And we still have a long-term unemployment
problem. So many of those adults that we're talking about could
actually find a way into a job if they knew that a community
and technical college could provide that path.
Ms. Conklin. Senator Franken, I can applaud community
college system leadership that are actually trying to make
community college an even more affordable path than what we've
described today. We believe community colleges are essential to
rebuilding America's middle class. The president of Ivy Tech
Community College in Indiana has a phenomenal 1-year,
competency-based, accelerated degree so you can get your
associate's degree and save 50 percent on your education. That
innovation in competency-based education is to be complimented.
North Carolina is reaching into the high schools and
flipping it, doing the same thing. In high school, take one
more year and we'll give you an associate's degree. And that
community college system's partnerships with the high schools
on early college high schools is really bearing fruit in terms
of reducing achievement gaps, again, cutting the price of
college in half.
Senator Franken. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Franken.
I don't mean to carry this on any longer, but, Dr. Scott-
Clayton, you just said some things that my mind rebels at, and
that is that there's a negative cost of going to a local
community college. You know, things cost money.
I guess what that leads me to ask is how do we get students
more aware of the cost? We've sort of weaved around that issue
here today. But how do we make them more aware of the cost of
this? I mean, all of you--how do we make them more aware, the
students and their families?
Ms. Scott-Clayton. I think it needs to be individualized,
personalized, one-on-one guidance. The statistics are out
there.
The Chairman. That costs money.
Ms. Scott-Clayton. It does, but it doesn't need to cost a
lot. Again, simplifying the system would help a great deal.
The Chairman. Well, we can simplify the system. I think
there's great consensus on that. But I'm not certain that
really gives them an awareness of the cost. This simplifies the
system for them: getting money, the loans, the grants--things
like that. But what's the cost going to be in that college?
Ms. Long. If I could interject, in my project where we were
helping families fill out the FAFSA, we had a separate part
where we were reaching out to students who were just sophomores
and juniors in high school. We took the information that they
had on their tax form and didn't ask any additional questions.
We were able to come up with an estimate of how much they
were eligible to receive in a Pell grant, in a State grant, as
well as putting information on there of four likely colleges
and what they actually cost, and once you subtract aid, what
the net price would be.
Anecdotally, we heard that students were running into their
guidance counselors' offices with these letters, saying, ``What
do I have to do to get this money? What academic courses do I
need to take? How do I prepare?''
Now, information alone is not enough. But that was a first
important step in increasing awareness and having them
understand that Ohio State doesn't cost $50,000. The local
community college, particularly after you have a Pell grant,
has a cost of zero. You just need to academically prepare and
get ready to go to that institution. So there are lots of
things we can do with existing information to come up with
these estimates and send them out to families.
Ms. Scott-Clayton. To put some specific numbers on the
cost, if we thought about reaching out to all new Pell
recipients--a one-time cost per Pell recipient. If we spend
$500 per student, which would be a pretty significant amount
compared to the cost of some of these interventions that have
been experimented with, that would be less than a couple of
billion dollars a year.
Ms. Cook. I would add that if we are able to move on one of
our consensus points about earlier notification, that would be
a great opportunity to weave in some of these examples and
scenarios and net price calculators so students know----
The Chairman. How much earlier? You're talking about
secondary school, right?
Ms. Cook. I'm talking about telling students, for example,
high school students in the spring of their junior year, that
they were eligible for a Pell grant. And then the further piece
in that eligibility notice could also outline what that Pell
grant can do for them at local institutions for cost.
The Chairman. Thank you.
Senator Alexander. I know what you're thinking. But we're
part of the problem, because what happens is everybody goes out
on a political stump and says, ``You can't afford to go to
college, and you've borrowed too much money.'' Everybody thinks
that's true, and for most students, it's not true. I mean, you
can afford to go to college, and most students have not
borrowed too much money.
There are some students who do borrow too much money, and
we have to address that, and we will at another hearing. But I
think we've perpetuated this fiction that you can't afford to
go to college when, in fact, you can. I think that by changing
and simplifying the system, maybe the major value of it would
be to change that fiction so that people don't think it's too
hard and too expensive to go to college, at least for the first
2 years of college.
I mean, you can go to the University of Tennessee for
$8,000 a year if you get a Hope--you know, for tuition. I can
go into all the figures, but it doesn't cost you that much to
go there, if you need help from the various forms of aid that
are available.
It also seems to me, Mr. Chairman, that one way to change
this fiction would be to replace it with a fiction that says to
American students that community college is free. And I think
Ms. Conklin or any of you can talk to this.
But isn't it a fact that with some flexibility--let's just
take the State of Tennessee, where I know we've had communities
who get together, like in northeastern Tennessee, and they've
said to all their high school graduates, ``If you can qualify
to go to the community college, and if you have an income
problem, forget it. We'll take care of it.''
They're saying to them, ``You can afford to go to community
college.'' It costs them $100,000 a year. The businesses chip
in that amount of money when they add it to the Hope Grant
that's available, the Pell grant that's available, and they're
not even counting loans that are available.
So wouldn't it be true that a State like Tennessee--
Governor Haslam could, with some flexibility in the Pell grant
program, pretty easily be able to say to all Tennessee high
school graduates, ``If you're short of money, community college
for you is free.''
Ms. Conklin. I believe that's the case, sir, in at least
half of the States. Some of the States that have not invested
well enough in their public community colleges--they might have
to actually kick in some State need-based aid to cover that
difference. But I do believe----
Senator Alexander. Probably not very much, given the amount
of the budget.
Ms. Conklin. No, sir.
Senator Alexander. And just saying that----
Ms. Conklin. Is powerful.
Senator Alexander [continuing]. To students is powerful.
You may think this anecdote is not appropriate, but it
happened. I mean, Dolly Parton told all the students who
graduated from Sevier County High School, where she went, which
is in the mountains up near where I live, that if they
graduated, she'd pay for college.
The graduation rate doubled, just because students knew
that, and they thought--I think the real reason was because she
said so, it was important to them to do. And then the money
made it possible for them to do.
I think turning the fiction around by simplifying it and
maybe even working with States to encourage the idea of free
community college, if you need for it to be free, would do a
lot to increase the number of low-income students who go to
college. And it would also make it possible for States like
Tennessee, where they've completely, Mr. Chairman, turned
around the idea that--and I really made a mistake when I was
Governor, because we said there were too many students in
college who need remedial help, so we're not going to give you
any credit for that and made them get remedial help outside
college.
They've turned that around now and said, ``You can come on
in, but we're going to give you a lot of extra help, and you
have to graduate sooner. You have to graduate on time.'' So
they're experimenting with different ways to get people through
quicker. They're saving money, and they're making dramatic
increases in the number of students that are graduating in 4 or
5 years in a short period of time.
So I'd like to turn this fiction around. I think we're part
of the problem, because we're always running around saying,
``You can't afford to go to college,'' when, in fact, if we
give you accurate information about it, you could.
The Chairman. To followup on what you said, Senator
Alexander, we keep saying that college debt has now exceeded
credit card debt, and that just scares a lot of students. They
say, ``Oh, my gosh. I can't afford to do that.''
Senator Alexander. Well, I think we're going to have a
hearing on that, aren't we, in a little while?
The Chairman. Yes.
Senator Alexander. But part of that is for most students,
they don't have an unreasonable amount of debt, given the value
of their education. For some students, they do. And then
there's probably some changes we can make, such as allowing
colleges and community colleges--and I'd be real interested at
some future point in your comment on this--to have a little bit
of say about how much a student can borrow.
Right now, if a student goes in and asks for too much
money, they have to give it to them, and some students don't
spend that wisely. I mean, if you're 19 years old, and you can
get whatever you want, I'm not surprised at that. And make
colleges have a little skin in the game in some cases. That's
another interesting hearing we'll have at a later time.
The Chairman. I think you'll find a lot of compatibility on
that issue here.
Any last things that any of you want to offer or say that
didn't come up that you think you want to make a point on
before I close it down?
Ms. Conklin. I just want to bring you back to the point
that animated such a diverse coalition of students--civil
rights leaders, college presidents, foundation presidents,
Governors, business leaders. They organized around the
statistic that 46 percent of the students who start some
postsecondary education today never have a certificate, a
credential, or a degree 6 years later.
For African-Americans, that's 58 percent, and for Latinos,
that's 63 percent. So two-thirds of our Latinos who start have
nothing to show for it 6 years later. That's why we want to put
success at the center of our access commitment in our financial
aid. I'd feel remiss to not put that statistic out right in
front of us before we close.
The Chairman. Anything else?
I thank each of our witnesses for being here and sharing
your knowledge and views. Increasing access to college and
improving the effectiveness of the financial aid system is of
particular importance, as you can see, to this committee as we
begin our work on reauthorizing the Higher Education Act.
I thank all my colleagues for being here. I especially want
to thank Senator Alexander and his staff for their partnership
on setting up this hearing and others. I request that the
record remain open for 10 days for members to submit statements
and additional questions for the record.
The committee will stand adjourned. Thank you very much.
[Whereupon, at 11:50 a.m., the hearing was adjourned.]
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