[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

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions
                                
                                
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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                       TOM HARKIN, Iowa, Chairman

BARBARA A. MIKULSKI, Maryland			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

                              ----------                              


                      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\
---------------------------------------------------------------------------
    \1\ Note: The views expressed are those of the author and should 
not be attributed to Harvard University or the NBER.
---------------------------------------------------------------------------
                   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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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 
---------------------------------------------------------------------------
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).
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
               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).
---------------------------------------------------------------------------
    \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 
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
    \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 
---------------------------------------------------------------------------
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-
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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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Horn, Laura J., Xianglei Chen, and Chris Chapman. (2003). Getting Ready 
    to Pay for College: What Students and Their Parents Know About the 
    Cost of College Tuition and What They Are Doing to Find Out. 
    National Center for Education Statistics Report No. 2003030. 
    Washington, DC.: National Center for Education Statistics.
Kane, Thomas J. (2003) ``A quasi-experimental estimate of the impact of 
    financial aid on college-going.'' National Bureau of Economic 
    Research Working Paper 9703. Cambridge, MA: National Bureau of 
    Economic Research.
Kane, Thomas J. (2004) ``Evaluating the impact of the D.C. Tuition 
    Assistance Grant Program.'' National Bureau of Economic Research 
    Working Paper 10658. Cambridge, MA: National Bureau of Economic 
    Research.
Kane, Thomas J. and Christopher Avery. (2004). ``Student Perceptions of 
    College Opportunities: The Boston COACH Program'' in Caroline Hoxby 
    (ed.) College Decisions: The New Economics of Choosing, Attending 
    and Completing College. Chicago: University of Chicago Press.
King, Jacqueline E. (2004). ``Missed Opportunities: Students who do not 
    Apply for Financial Aid,'' American Council on Education Issue 
    Brief.
Long, Bridget Terry. (2007) ``The Contributions of Economics to the 
    Study of College Access and Success.'' Teachers College Record, 
    vol. 109, no. 10.
Long, Bridget Terry. (2013) ``Supporting Access to Higher Education.'' 
    Legacies of the War on Poverty. Martha Bailey and Sheldon Danziger, 
    Eds. The National Poverty Center Series on Poverty and Public 
    Policy. New York: Russell Sage Foundation.
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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
                            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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    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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Avery, C. & Kane, T.J. (2004) ``Student Perceptions of College 
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    torrent_ssq_final_manuscript_-_02-06-13.pdf.
Castleman, Benjamin, Lindsay Page, and Korynn Schooley. 2013. ``The 
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Deming, D., & Dynarski, S. (2009) ``Into college, out of poverty? 
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Dynarski, Susan M., and Judith Scott-Clayton. 2006. ``The Cost of 
    Complexity in Federal Student Aid: Lessons from Optimal Tax Theory 
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Dynarski, Susan M., and Judith Scott-Clayton. 2007. Pell Grants on a 
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Dynarski, Susan M., and Judith Scott-Clayton. 2013. ``Financial Aid 
    Policy: Lessons from Research.'' In Future of Children vol. 23, no. 
    1, edited by Cecilia Rouse, Lisa Barrow, and Thomas Brock, 
    Princeton, NJ: The Trustees of Princeton University.
Dynarski, S.M., Wiederspan, M., & Scott-Clayton, J. (2013) 
    ``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.'' 
    In The Crisis in Higher Education, edited by Joseph Froomkin, 84-
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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 
    York: The College Board.
Hoxby, Caroline, and Christopher Avery. 2012. ``The missing ``one-
    offs'': The Hidden Supply of High-Achieving, Low Income Students.'' 
    NBER Working Paper 18586. National Bureau of Economic Research, 
    Cambridge, MA. Available at http://www.nber.org/papers/w18586.pdf.
Hoxby, Caroline M., and Sarah Turner. (2013). ``Expanding College 
    Opportunities for High-Achieving, Low Income Students.'' SIEPR 
    Discussion Paper No. 12-014. Stanford University, Stanford, CA.
Kane, Thomas J. 1996. ``Lessons From the Largest School Voucher Program 
    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.
Long, B.T. (2008). ``What is known about the impact of financial aid? 
    Implications for policy,'' NCPR Working Paper, New York: National 
    Center for Postsecondary Research.
Roderick, Melissa, Jenny Nagaoka, Vanessa Coca, and Eliza Moeller. 
    2009. From High School to the Future: Making Hard Work Pay Off. 
    Chicago: Consortium on Chicago School Research.
Rosenbaum, James, Regina Deil-Amen, and Ann Person. 2006. After 
    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 
    Achievement.'' Journal of Human Resources 46 (3): 614-46.
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\
---------------------------------------------------------------------------
    \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 
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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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