[Senate Hearing 113-673]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 113-673
 
        THE CHALLENGE OF COLLEGE AFFORDABILITY: THE STUDENT LENS

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

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                                   ON

                    EXAMINING COLLEGE AFFORDABILITY

                               __________

                             APRIL 16, 2013

                               __________

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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                       TOM HARKIN, Iowa, Chairman

BARBARA A. MIKULSKI, Maryland       LAMAR ALEXANDER, Tennessee
PATTY MURRAY, Washington            MICHAEL B. ENZI, Wyoming
BERNARD SANDERS (I), Vermont        RICHARD BURR, North Carolina
ROBERT P. CASEY, JR., Pennsylvania  JOHNNY ISAKSON, Georgia
KAY R. HAGAN, North Carolina        RAND PAUL, Kentucky
AL FRANKEN, Minnesota               ORRIN G. HATCH, Utah
MICHAEL F. BENNET, Colorado         PAT ROBERTS, Kansas
SHELDON WHITEHOUSE, Rhode Island    LISA MURKOWSKI, Alaska
TAMMY BALDWIN, Wisconsin            MARK KIRK, Illinois
CHRISTOPHER S. MURPHY, Connecticut  TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts

                                     
        
                                     
                                     
                                    
                                       

                      Pamela Smith, Staff Director

        Lauren McFerran, Deputy Staff Director and Chief Counsel

               David P. Cleary, Republican Staff Director

                                  (ii)

  




                            C O N T E N T S

                               __________

                               STATEMENTS

                        TUESDAY, APRIL 16, 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
Murphy, Hon. Christopher, a U.S. Senator from the State of 
  Connecticut....................................................     4
Baldwin, Hon. Tammy, a U.S. Senator from the State of Wisconsin..     5
Murray, Hon. Patty, a U.S. Senator from the State of Washington..    36
Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode 
  Island.........................................................    38
Franken, Hon. Al, a U.S. Senator from the State of Minnesota.....    39

                               Witnesses

Senack, Ethan, Higher Education Associate, U.S. Public Interest 
  Research Group, Washington, DC.................................     6
    Prepared statement...........................................     7
Donelson Derrica, Student, Lipscomb University, Nashville, TN....    12
    Prepared statement...........................................    13
Goldrick-Rab, Sara, Ph.D., Associate Professor of Educational 
  Policy Studies and Sociology, University of Wisconsin-Madison, 
  Madison, WI....................................................    15
    Prepared statement...........................................    17
Brooks, Vivica, Student, Bowie State University, Bowie, MD.......    24
    Prepared statement...........................................    26

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Response to questions of Senator Bennet by:
        Sara Goldrick-Rab, Ph.D..................................    48
        Vivica Brooks............................................    49

                                 (iii)
                                 
                                 

  


        THE CHALLENGE OF COLLEGE AFFORDABILITY: THE STUDENT LENS

                              ----------                              


                        TUESDAY, APRIL 16, 2013

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:02 a.m., in 
room SD-430, Dirksen Senate Office Building, Hon. Tom Harkin, 
chairman of the committee, presiding.
    Present: Senators Harkin, Alexander, Baldwin, Murphy, 
Franken, Murray, and Whitehouse.

                  Opening Statement of Senator Harkin

    The Chairman. The Senate Committee on Health, Education, 
Labor, and Pensions will come to order. A little over a year 
ago, this committee launched a series of hearings to examine 
the challenge of college affordability. So far we've held three 
hearings. We've heard from the administration, from both 
traditional and online universities and community colleges, 
from State officials, higher education associations, think 
tanks and researchers, among others.
    Today, in our fourth and final hearing in this series, 
we'll examine this issue through the lens of students. We'll 
listen to their voices, their experiences, and their ideas. 
Since our last hearing in September, we have continued to be 
reminded of the enormous difficulties that students from lower 
income families face in their efforts to get a college 
education. In the fall, new data showed that two-thirds of 
college seniors who graduated in 2011 had an average student 
loan debt of $26,600, which was a 5 percent increase from the 
previous graduating class.
    This continuous upward trend has persisted despite the 
tripling of Federal grant aid and constant dollars over the 
past decade. Last month, a report by the State Higher Education 
Executive Officers warned that public higher education, which 
educates 70 percent of the students in this country, is about 
to cross an historic threshold. For the first time ever, 
students will pay a higher percentage of operating costs of 
public universities than State governments.
    In 2012, net tuition revenue made up 47 percent of public 
colleges' educational costs. By comparison, in 2001, tuition 
was 29 percent of the costs. We've learned that first student 
spending from State and local sources fell to less than $5,900 
in 2012, a 9 percent decrease just from the year before, and a 
quarter century low for the third consecutive year.
    The implications for affordability of this cost shifting is 
obvious: As States continue retrenching from their historic 
responsibility as primary supporters of public higher 
education, students and their families are asked to shoulder an 
ever-growing burden of cost. And where do they go for that? 
They go to loans and Pell grants, of course.
    Finally, I recently came across these shocking statistics: 
Students from wealthy families are seven times as likely to 
have earned a bachelor's degree by age 24 than those from poor 
families. And this disparity has grown over the last 40 years. 
Between 1970 and 2010, the proportion of 24-year-olds with a 
bachelor's degree who came from the lowest quartile of family 
income grew from 6 percent to 10 percent over 40 years, while 
in the wealthiest quartile the proportion grew from 40 percent 
to 71 percent.
    In addition, when one takes academic preparation into 
consideration, the disparity is even more striking: A high-
achieving student of limited means has the same chance of 
attending college as a low-achieving student from a more 
advantaged background. At the lowest achievement level, a 
wealthy student is about twice as likely to attend college as 
his low-income peer.
    It is estimated that over the past decade, 4.4 million 
college qualified low-income high school graduates did not 
attend 4-year colleges, and an additional 2 million did not 
attend colleges at all. What this tells me is that something 
needs to change and urgently if we want America's higher 
education system to be an engine of equal opportunity and not a 
system that perpetuates and actually broadens inequality.
    There is no bigger economic or educational failure than 
having a committed and prepared student who has to forego a 
postsecondary education because it's just too expensive. The 
upcoming reauthorization of the Higher Education Act will be an 
historic opportunity to get a handle on runaway costs, stop the 
shifting of costs onto students, and get our higher education 
back on track. And we'll continue to hold hearings on these 
issues as we move forward.
    I might just add, parenthetically, that one of the most 
important priorities right now in the next couple of months is 
to maintain the affordability of college loans. As you know, 
they are set to double from 3.4 to 6.8 percent again in June, 
as they were last year. We kept it low for a year, and we're 
doing everything we can to try to keep it low, down at 3.4 
percent. The President's budget prevents that from doubling, 
and there are other proposals. But, again, this is something 
that we cannot afford to do, to let that double at this point 
in time.
    I'm looking forward to hearing from our students. I read 
your testimonies last night. They're all very good. And with 
that, I invite Senator Alexander for any opening remarks.

                 Opening Statement of Senator Alexander

    Senator Alexander. Thanks, Mr. Chairman, and welcome to the 
witnesses today. I thank the chairman for his leadership on 
this issue. This is, as he said, the fourth hearing.
    Why is the cost of college going up? Insofar as public 
colleges and universities, which is where three out of four 
students attend, the first reason is the cost of Federal 
Medicaid mandates. The mandates force States to spend money on 
Medicaid that they would otherwise spend on public higher 
education. As a result, tuitions go up to make up the 
difference.
    For example, in the 1980s in Tennessee when I was the 
Governor, Medicaid took 8 percent of the State budget. Today, 
it's 26 percent of the State budget, soaking up money that 
could be used to reduce tuitions. Senator Harkin is correct. 
There has been a dramatic change in State support for public 
higher education.
    In the 1980s in Tennessee, the State paid 70 percent of the 
cost of your going to a public college or university. Today, it 
pays 30 percent, and the student pays 70 percent. So the first 
reason is because of Federal Medicaid mandates.
    The second reason is because of the inefficient use of 
campus facilities. The former president of George Washington 
University said that simply requiring one mandatory summer 
session for every student in 4 years, as Dartmouth does, would 
improve his institution's bottom line by $10 million to $15 
million a year. You could run two complete colleges, he said, 
with two complete faculties in the facilities now used half the 
year for one. Those savings could be used to reduce the cost of 
going to a college and to improve the quality of the college.
    To save money and reduce costs, some colleges are 
experimenting with 3-year degrees for appropriate students, and 
some States, like Tennessee, are allocating funds to colleges 
that do a better job of helping students graduate in 4 years. 
Obviously, you save money if you go and complete your work in 4 
years instead of 5 or 6.
    The third reason college costs are so much is because of an 
absurd barrage of well-intentioned Federal regulations. The 
Stanford University president said complying with them consumed 
7 percent of his budget. I voted against the last Higher 
Education Act because it authorized a new stack of regulations 
as tall as I am, and the existing stack was already that tall. 
Senators Mikulski, Burr, Bennet and I, with Chairman Harkin's 
encouragement, are going to go to work on this.
    The fourth reason college costs so much could be the huge 
amount of Federal money which follows students to the college 
of their choosing. The average Pell grant today, about $3,600, 
exceeds the cost of tuition at the average community college, 
$3,100. The average Federal undergraduate student loan is about 
$2,000 less than tuition at the average 4-year public 
university.
    These loans have become easy money. An undergraduate 
student who is still classified as a dependent on his or her 
parents' tax returns can borrow up to $31,000 in Federal loans 
at either the 6.8 percent interest rate on unsubsidized loans 
or the 3.4 percent rate on subsidized loans. The President has 
recommended--and I agree with his thinking--that we consider a 
form of variable rates so students can take advantage of the 
lower rates, for example, that exist today.
    If a student is independent from their parents, he or she 
can borrow up to $57,500 in Federal loans to pay for college. 
Some private banks will offer loans to students at rates 
between 5.75 and 13 percent. These loans may be easy to get, 
but they are hard to pay back. Many Americans find themselves 
unable to pay the loans back, and taxpayers find themselves 
holding worthless notes.
    Taxpayers as well as students have something at stake here. 
These grants and loans cost taxpayers quite a bit of money or 
add quite a bit to the Federal debt. Pell grants were $33 
billion last year. There were $105 billion in new Federal loans 
last year, all provided by the Federal taxpayer. The total of 
Federal student loans is approaching $1 trillion. About half 
our students at our 6,000 institutions have either a Federal 
grant or a Federal loan to help pay for college.
    I'd like to see Congress address all four of these 
contributors to the rising cost of college as well as look at 
ways we can help students make better decisions about how much 
money to borrow when they feel the need to borrow.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Alexander. Now, we'll turn 
to our introductions, and, first, I'll invite Senator Murphy to 
introduce our first witness.

                      Statement of Senator Murphy

    Senator Murphy. Thank you very much, Mr. Chairman. I'm so 
pleased to have with us today Ethan Senack. Ethan is a native 
of Torrington, CT, and a graduate of the University of 
Connecticut, where he studied political science and sociology. 
He is currently an advocate for students as the Higher 
Education Associate for U.S. PIRG.
    But when he was at the University of Connecticut, he was a 
true leader in bringing together student body presidents from 
across the State as well as students from all of our private 
and public universities to lobby at the State capitol on behalf 
of student aid issues and support for public universities. He 
was a real leader among students of all political persuasions 
in Connecticut's legislature and in our higher education 
system, and we are pleased to have him here this morning.
    The Chairman. Thank you very much. I'll turn to Senator 
Alexander for purposes of an introduction.
    Senator Alexander. Thanks, Mr. Chairman. I'm pleased to 
introduce Derrica Donelson, a student at Lipscomb College in 
Nashville. She's 23. She was born in Nashville, raised by a 
single working mother, and attended Martin Luther King Magnet 
School. She is scheduled to graduate in August with both a 
bachelor's and a master's degree in accounting. She is active 
in her community.
    We look forward to hearing from her about the informed 
choices that she made as she selected among colleges. She 
didn't go to the least expensive college she could have gone 
to. She made a decision about where she wanted to go, and she's 
been successful. I look forward to her testimony.
    The Chairman. Thank you.
    Senator Baldwin.

                      Statement of Senator Baldwin

    Senator Baldwin. Thank you, Mr. Chairman. It's my honor to 
introduce Dr. Sara Goldrick-Rab, an Associate Professor of 
Educational Policy Studies and Sociology at the University of 
Wisconsin-Madison. Dr. Goldrick-Rab traveled to Washington, DC, 
today with her grandfather, Isaac Youcha. Mr. Youcha enlisted 
to serve his country in June 1949. When the war ended, Mr. 
Youcha attended New York University on the GI bill, graduating 
in 1950 as the first person in his family to earn a college 
degree.
    As I think Dr. Goldrick-Rab will testify later this 
morning, her grandfather's pursuit of the American dream, 
access to a quality higher education, forever changed their 
entire family. I can only imagine how proud Mr. Youcha is today 
to be here and watch his granddaughter testify before our 
Senate committee, and with good reason. We're incredibly lucky 
to have her join us today.
    Dr. Goldrick-Rab is an affiliate of the La Follette School 
of Public Affairs, the Center on Financial Security, the 
Institute for Research on Poverty, and she serves as a senior 
scholar at the Wisconsin Center for the Advancement of Post-
Secondary Education. As a scholar, activist, and sociologist 
with a deep commitment to bringing research into policy and 
practice, Dr. Goldrick-Rab's research explores policy aimed at 
reducing socioeconomic and racial inequalities.
    She currently holds the William T. Grant Faculty Scholar 
Award, a 5-year grant facilitating her work on a project titled 
``Rethinking College Choice in America,'' and is co-author of 
Putting Poor People to Work: How the Work First Idea Eroded 
College Access for the Poor, which was a finalist for the C. 
Wright Mills Award. Her research has been published in numerous 
journals and has received support from several foundations. Dr. 
Goldrick-Rab holds a Ph.D. in sociology from the University of 
Pennsylvania, and we are delighted to have her on our panel 
today.
    The Chairman. Thank you very much, Senator Baldwin.
    Senator Mikulski also chairs another committee, a very 
important committee on appropriations, which she has to attend 
to this morning. So in her place, I will introduce Vivica 
Brooks, a Washington, DC, native, a senior at Bowie State 
University in Maryland, majoring in business with a 
concentration in marketing. Ms. Brooks has been a recipient of 
the Federal Pell grant and loans as well as scholarships. She 
is a mother and an active commuter student and student athlete. 
She resides in Bowie, MD, with her mother and son.
    Welcome, Ms. Brooks.
    Your statements will all be made a part of the record in 
their entirety. I would ask if you could sum up your statements 
in 5 minutes or so, we would appreciate it. And we'll go from 
left to right, and then when we finish, we'll open for 
questions.
    Mr. Senack, welcome and please proceed.

  STATEMENT OF ETHAN SENACK, HIGHER EDUCATION ASSOCIATE, U.S. 
         PUBLIC INTEREST RESEARCH GROUP, WASHINGTON, DC

    Mr. Senack. Thank you, Chairman Harkin, Ranking Member 
Alexander, and Senator Murphy for the introduction, as well as 
all the distinguished Senators here today. My name is Ethan 
Senack. I'm the Higher Education Associate for the U.S. Public 
Interest Research Group. U.S. PIRG is a federation of State-
based consumer groups, including 75 campus chapters in 20 
States across the country. On behalf of those students, our 
project works to promote affordable and accessible higher 
education.
    Less than a year ago, I was a student at the University of 
Connecticut. I thought I was destined for Husky basketball, but 
I ended up working with the student PIRG chapter on higher 
education at UConn instead. Add in that I'm a recent graduate, 
and college affordability is a very important and relevant 
topic to me.
    As Chairman Harkin said before, with two-thirds of my 
colleagues graduating with an average of $26,000 in debt, 
there's no question that the cost of higher education is a 
major issue for my generation. On April 25th, we'll note the 
first anniversary of our Nation hitting over $1 trillion in 
collective student loan debt. At the same time, States are 
spending an average of 28 percent less per student on higher 
education. While State investments have plunged, tuition has 
skyrocketed, causing students to rely more heavily on loans.
    Congress has taken serious steps to improve college 
affordability, raising the maximum Pell grant, maintaining low 
interest rates on student loans, and instituting mandatory loan 
counseling. But there is more work we can do to improve the 
system.
    Financial aid certainly played a major role in my decision 
to go to the University of Connecticut. Never having had debt, 
it was really hard to understand the repercussions of taking on 
$28,000 or $40,000 or $60,000 in debt. And I'm not alone in 
that. Over 76 percent of students express a desire for better 
training in personal finance before college.
    The financial aid shopping sheet, just one example of the 
Department of Education's efforts to improve financial 
literacy, is a great positive step forward. Right now, there is 
no standardized system for communicating financial aid offers, 
which can lead to issues for students. Some students feel they 
are led into higher levels of debt than necessary. Whether the 
package offers low costs but recommends large loans, or even 
just that loans are often listed under the award section, the 
fact remains that an already complicated process is made even 
more difficult.
    Senator Franken introduced the bipartisan Understanding the 
True Cost of College Act last year, which required colleges to 
conform their award letters to a standardized system. Just as 
important was the consumer testing to improve the shopping 
sheet's ability to present and communicate this data clearly.
    Once a student has signed the dotted line, it's critical to 
keep them aware of their options. Senator Harkin recently 
introduced the Smarter Borrowing Act to improve loan counseling 
requirements on Federal student loans, including annual 
notification of cumulative debt and remaining eligibility for 
loans and grants.
    Steps like these help students make the right financial 
decisions. Once students are at college and getting their 
degree for the right price, the next concern is that their debt 
stays low and is affordable in repayment.
    First and foremost, Pell grants are the cornerstone of the 
financial aid system, supporting over one-third of all college 
students across the country. Unfortunately, the program's 
impact is slowly eroding, covering the smallest portion of 
tuition costs in history, and cuts over the past few years have 
squeezed over 140,000 students out of the program.
    Students need a strong investment in grant aid. It's far 
better than loans and better targeted to those who need it. For 
those who do need loans, low interest rates are key to 
affordability. With the support of many of you, Congress passed 
a 1-year extension of the low interest rate last year. But that 
runs out in a few months, raising costs by over $1,000 for more 
than 7 million students across the country.
    I recognize the need for long-term reform, but it's just as 
critical to make sure interest rates don't double on students 
this July. With only 2 months before the deadline, I urge 
Congress to extend the low rate and give us the time to work 
out a comprehensive student-friendly policy.
    Income-based repayment could also use improvement. As a 
safety net to help struggling borrowers avoid default, far too 
few distressed borrowers are participating. There are only 1.1 
million students enrolled in IBR, but there are 5.4 million 
students currently late on their payments. Congress should 
simplify the process and ease transition into IBR, as well as 
improving emphasis on such fall-back programs in loan 
counseling.
    All of these changes will require strong political will. 
But I'm confident we can get there. I saw Congress and the 
President rise above political gridlock last year to keep 
student loan interest rates low. I'm seeing significant change 
on the college level. Over 600 colleges have voluntarily joined 
the movement to make their costs transparent. And students at 
colleges across the country are gearing up to make their voices 
heard on interest rates once more.
    Thank you, all of you, for your time, and I look forward to 
your questions.
    [The prepared statement of Mr. Senack follows:]
                   Prepared Statement of Ethan Senack
                                Summary
                               background
    College costs are rising. The national recession has led to weak 
State economies, which in turn have squeezed college budgets. While 
State investments in higher education have plunged, tuition costs have 
skyrocketed. In line with that, student loan debt has grown enormously. 
On April 25th, we'll note the first anniversary of when the country's 
collective student loan debt hit $1 trillion.
                            recommendations
    Improve Potential Students' Knowledge and Understanding: One of the 
most complicated decisions for students and families to make is where 
to go for college. Millions of Americans make the decision every year--
and a large portion say that financial cost weighs most heavily on 
their choice.

           Increase use of Financial Aid Shopping Sheet: Many 
        students and families have complained about the lack of 
        transparency in college pricing and financial aid packages, 
        which may lead them into higher debt levels than they 
        anticipate. The shopping sheet is a standardized method of 
        communicating award packages and allows comparing and 
        contrasting of college financial aid offers.
           Improve Loan Counseling: Right now, loan counseling 
        does not effectively communicate critical borrowing and 
        repayment options. Efforts to increase the depth and 
        comprehension of loan counseling can only help improve 
        financial literacy among students.

    Maintain Grant Aid: Pell grants are the cornerstone of the Federal 
financial aid program, supporting more the 9 million students pursuing 
their college degree. To meet workforce needs in years to come, we must 
maintain strong funding for the Pell grant program.
    Keep Debt Low and Repayment Manageable: Student debt levels are at 
record highs, as is the default rate on student loans. High loan debt 
has serious economic impacts on a graduate's ability to move forward in 
life, whether purchasing a home, starting a family, or continuing their 
education.

           Maintain Low Interest Rates on Student Loans: Unless 
        Congress and the President act decisively, the interest rate on 
        new subsidized Stafford student loans will double from 3.4 
        percent to 6.8 percent on July 1, 2013. That will drive up loan 
        costs by $1,000 per student, per loan, for over 7 million 
        students.
           Strengthen Income-Based Repayment: IBR is an 
        important safety net for borrowers struggling to make their 
        payments. Unfortunately, far too few distressed borrowers are 
        participating. Right now, there are only approximately 1.1 
        million students enrolled in IBR, while 5.4 million borrowers 
        are currently late on their payments.
                                 ______
                                 
    Thank you Chairman Harkin, Ranking Member Alexander, and other 
distinguished Senators for giving me this opportunity to speak about 
the student perspective on college affordability. My name is Ethan 
Senack, I am the Higher Education associate with the U.S. Public 
Interest Research Group (U.S. PIRG). Thank you for inviting me to 
speak. U.S. PIRG is a federation of State-based consumer protection 
groups, which has 75 campus chapters in 20 States across the country. 
On behalf of those student chapters, our project works to promote 
affordable and manageable student loan policy, to increase grant aid, 
and to protect student consumers on campus.
    Less than a year ago, I was a student at the University of 
Connecticut, so college affordability is a very important and relevant 
topic to me.
    As a member of our student PIRG chapter at UConn, I was part of the 
successful effort to keep the interest rate low on the subsidized 
Stafford student loan program. Thanks to the President and to Congress, 
in particular the Senators sitting here now from both sides of the 
chamber, a bipartisan agreement was reached to temporarily extend the 
low rate. To help make the point, the student PIRGs hosted 27 student 
watch parties, garnered over 800 press hits across the country and 
gathered 600,000 petition signatures to Congress.
    I care to organize around these issues because I just experienced 
and interacted with a number of the programs that fall under the topic 
of this hearing. I appreciate you giving me the opportunity to speak on 
behalf of students across the country and share my thoughts on keeping 
college within reach for all Americans.
                               background
    College costs are rising. The national recession has led to weak 
State economies, which in turn have squeezed college budgets. As a 
student leader, I led other students to the capitol in Connecticut to 
ask lawmakers to reprioritize higher education. The issue wasn't just 
the amount of money going to higher education; it was that the 
proportion of the budget going to higher education had shrunk.
    The same scenario is playing out across the country. States are 
spending 28 percent less per student on higher education; 11 States 
have cut funding by more than one-third per student, and two States 
have cut that spending per student in half.\1\ While State investments 
in higher education have plunged, tuition costs have skyrocketed.
---------------------------------------------------------------------------
    \1\ Report, Recent Deep State Higher Education Cuts May Harm 
Students and the Economy For Years To Come, Center for Budget and 
Policy Priorities, March 19, 2013.
---------------------------------------------------------------------------
    On top of that, student loan debt has grown enormously. On April 
25, we'll note the first anniversary of when the country's collective 
student loan debt hit $1 trillion dollars.\2\
---------------------------------------------------------------------------
    \2\ News story, Student Loan Debt Exceeds One Trillion Dollars, 
National Public Radio, April 24, 2012.
---------------------------------------------------------------------------
    Thankfully, I graduated with less debt than the national average 
but considering that \2/3\ of my colleagues graduated with debt at an 
average $26,600,\3\ that accomplishment seems hollow.
---------------------------------------------------------------------------
    \3\ Report, Student Loan Debt Climbs to $26,600 For Class of 2011, 
Then Institute For College Access and Success, October 18, 2012.
---------------------------------------------------------------------------
    For the millions of students like me that graduate with debt, the 
burden limits opportunity. Whether it's holding graduates back from 
building a family, buying a home, starting a business, or even 
continuing their education, high loan debt has serious impacts.
    Beyond its impact on the individual, student loan debt is bad for 
the country as a whole, contributing to the persistent economic 
stagnation we currently face. The Federal Reserve Bank of New York 
recently identified high student loan debt as a risk to economic 
growth.\4\
---------------------------------------------------------------------------
    \4\ Minutes, Minutes of the Federal Open Market Committee, The 
Federal Reserve, March 19-20, 2013.
---------------------------------------------------------------------------
                          recent steps forward
    To make college affordable, we need strong investment in higher 
education. At the Federal level, we have seen real progress. 
Specifically, the Pell grant program is the Nation's cornerstone 
student aid program, providing need-based, scholarship aid to nearly 10 
million students this year. In the big picture, the Pell grant program 
should ensure that all students who are qualified to attend college can 
do so without financial barriers. The Pell Grant supports nearly a 
third of all students attending college each year.
    It is absolutely critical that the Pell grant remain strong and 
fully funded--the more students can rely on higher amounts of grant aid 
to pay for college, the less they rely on student loans. In 2008, 
Federal lawmakers invested more than $40 billion in Pell grants, and 
put the maximum award on track to hit $5,975.\5\ The legislation also 
stabilized the program, which faced a severe budget shortfall due to 
the larger number of students and workers qualifying for the award. In 
2011, the program was exempted from the automatic cuts that are being 
imposed as of March of this year,\6\ enabling students to rely on their 
grant for college during this time of economic uncertainty. I'm sure 
the 3,500 students at UConn that rely on Pell grants appreciate your 
efforts, as well as millions of students across the country.
---------------------------------------------------------------------------
    \5\ Issue brief, The Health Care and Reconciliation Act, The White 
House, 2009.
    \6\ News story, Sequestration Presents Uncertain Outlook for 
Students, Researchers, Job-Seekers, The Chronicle of Higher Education, 
March 1, 2013.
---------------------------------------------------------------------------
    And of course, last year's extension of the low rate on subsidized 
Stafford loan demonstrated a real commitment from Congress and the 
President to help students manage their high cost loans.
    But even with all of these improvements, we still have a major 
affordability problem. I will walk through a variety of suggestions on 
both the front end, when students and families are shopping around for 
a college and signing on the dotted line, and on the back end, when 
student borrowers enter into repayment.
       improving potential students' knowledge and understanding
    One of the most complicated decisions for students and families to 
make is where to go for college. Millions of Americans make the 
decision every year--and a large portion say that financial cost weighs 
most heavily on their decision.\7\
---------------------------------------------------------------------------
    \7\ Survey, The American Freshman: National Norms Fall 2010, Higher 
Education Research Institute, January 2011.
---------------------------------------------------------------------------
    Financial aid certainly played a major role in my decision to 
attend the University of Connecticut. Never having had debt or 
initiated a major financial decision, I found it hard to entirely 
understand the magnitude of choosing to attend a school with tuition in 
the range of $40,000 or $50,000.
    The unfortunate reality is that, like me, most students feel 
unprepared to interpret the financial decisions they must make. Over 76 
percent of students expressed desire for increased training in personal 
finance before going to college.\8\ Because of this, we must continue 
to improve access and ease of understanding of financial information. 
Fortunately for students and families, there are some notable efforts 
underway already.
---------------------------------------------------------------------------
    \8\ Survey, New Survey by The Hartford Reveals Financial Education 
Gap, The Hartford Financial Services Group, Inc., February 2007.
---------------------------------------------------------------------------
Financial Aid Shopping Sheet
    Many students and families have complained about the lack of 
transparency in college pricing and financial aid packages, which may 
lead them into higher debt levels than they anticipate.
    When I received my financial aid package, I was faced with the 
choice between a private school offering enough financial aid to cover 
the full cost of attendance--over $20,000 in grants and an additional 
$20,000 in loans--and a public school offering enough grant aid and 
subsidized loans to cover the majority of costs but leaving a small 
amount unfilled. The private school letter showed a ``net cost'' of $0, 
and while the public school letter showed a ``net cost'' of a few 
thousand dollars. That alone is misleading, because the private school 
would have left me with $80,000 in debt, while I ended up graduating 
from the public school owing only $14,000.
    Even more confusing is that schools calculate costs differently. 
Some include tuition plus room and board. Other schools incorporate the 
cost of textbooks. Beyond that, there are manifold costs that may or 
may not be accounted for in the school's assessment: transportation or 
parking, school supplies, etc. Without a detailed breakdown or 
explanation, potential students and families may be slammed with higher 
costs than expected down the road.
    The U.S. Department of Education has developed and promoted a 
financial aid shopping sheet. The Department campaign is a voluntary 
effort through which colleges present their financing information in 
consistent and easy to understand format.\9\ Over 600 institutions have 
agreed to use the Department of Education's template in their letters 
this year \10\--creating a standardized way for students and families 
to compare and contrast different schools and aid awards. Last year, 
Senator Franken introduced a bipartisan bill, the Understanding the 
True Cost of College Act, which required all universities to conform 
their financial-aid award letters to a standard shopping sheet format. 
The bill also includes valuable consumer testing to improve the 
shopping sheet's ability to present and communicate the data clearly 
and effectively.\11\
---------------------------------------------------------------------------
    \9\ Issue Brief, Financial Aid Shopping Sheet, The U.S. Department 
of Education, 2012.
    \10\ Ibid.
    \11\ Press Release, Senator Franken Introduces Bipartisan Bill To 
Help Families and Students Understand the True Cost of College, Senator 
Al Franken, May 24, 2012.
---------------------------------------------------------------------------
    Fortunately, I ended up making the right choice, but we need to 
make sure there are strong systems in place to give guidance to all 
students and families.
Improving Loan Counseling
    Senator Harkin recently introduced the Smarter Borrowing Act to 
improve student loan counseling.\12\ This is another positive step in 
building financial literacy among students. The legislation strengthens 
and reforms the current mandatory entrance and exit loan counseling 
requirements for Federal student loans and notifies students annually 
of their cumulative debt, including their remaining eligibility for 
loans and grants. Efforts like this can only help students make the 
right education finance decisions as they complete their education.
---------------------------------------------------------------------------
    \12\ Mikulski, Harkin Introduce Bill to Improve Loan Counseling.
---------------------------------------------------------------------------
                         maintaining grant aid
    An enormous factor in deciding to attend college and where to go is 
how much scholarship aid a student receives. For as much progress that 
we've made recently to keep the Pell grant effective, the program's 
impact is eroding slowly, which is bad for college access. In 2011, as 
part of the Budget Control Act, Congress reached a bipartisan 
commitment to maintain a maximum Pell grant of $5,550 for low-income 
students and provided $17 billion in additional funding over 2 years 
for Pell grants.\13\ To maintain that maximum, Congress eliminated Pell 
grants for summer learning, limited the length of time a student can 
receive a Pell grant, made it more difficult for low-income students to 
automatically qualify for the maximum Pell award and eliminated Pell 
eligibility for students without a high school degree who demonstrate 
the ``ability to benefit'' from post-secondary education.\14\ Over 
140,000 students were squeezed out of the Pell grant program due to 
these cuts.\15\
---------------------------------------------------------------------------
    \13\ Blog, Understand Why Federal Budgets Matter to Students, US 
News and World Report, 1/18/12; brief, Debt Ceiling Law Provides $17 
Billion for Pell, National Association of Student Financial Aid 
Administrators, 8/3/11
    \14\ Issue Brief, Don't Double Our Rates, U.S. Public Interest 
Research Group, April 9. 2013.
    \15\ Release, 143,000 Students Lose Their Pell Grant Next Year, 
U.S. Public Interest Research Group, December 19, 2011.
---------------------------------------------------------------------------
               keeping debt low and repayment manageable
    Once students are at the right college for the right price, the 
next concern is that their student loans stay manageable and affordable 
in repayment. Two thirds of college students graduate with debt.\16\
---------------------------------------------------------------------------
    \16\ Issue Brief, Don't Double Our Rates, U.S. Public Interest 
Research Group, April 9. 2013.
---------------------------------------------------------------------------
Maintain Low Interest Rates on Student Loans
    Unless Congress and the President act decisively, the interest rate 
on new subsidized Stafford student loans will double from 3.4 percent 
to 6.8 percent on July 1, 2013.\17\ That will drive up loan costs by 
$1,000 per student, per loan, for over 7 million students.
---------------------------------------------------------------------------
    \17\ Ibid.
---------------------------------------------------------------------------
    I worked with students in Connecticut and all over America who 
couldn't afford to add to their debt burden. Students who stood up at 
press events, students who visited their legislators--and we heard 
stories from all of them about the crushing student debt our generation 
faces. The wave of outcry from students and the general public that 
built around the July 1st deadline shows that there is real consensus 
about investment in higher education. In the end, Congress echoed that 
call and passed a temporary extension of the 3.4 percent interest rate.
    I recognize that we need comprehensive student loan reform, but 
students and borrowers in repayment need more time to bring their case 
to Members of Congress. Forums like this help us shed light on the 
problems and concerns from our perspective--and allow us to work 
together with lawmakers to develop good long-term policy. I hope you 
will continue your efforts to reach out to students and young people on 
comprehensive reform as we move toward reauthorization of the Higher 
Education Act.
    That said, it is just as critical to prevent the subsidized 
Stafford interest rate from doubling on students this July. If we are 
unable to develop a long-term solution that benefits all student 
borrowers now, before July 1, then I urge Congress to extend the low-
interest rate for a short time, to give us the breathing room we need 
to work out a student-friendly and comprehensive policy.
Strengthen Income-Based Repayment
    Beyond interest rates, there are other methods of increasing 
affordability on the back end.
    Income Based Repayment (IBR) is another tool that could use 
improvement. IBR is designed as a safety net to help borrowers in 
financial distress avoid the dangers of student loan default. The 
program driving down their payments to a small percentage of what they 
earn.
    The problem with IBR is that far too few distressed borrowers are 
participating. Right now, there are only approximately 1.1 million 
students enrolled in IBR, while 5.4 million borrowers are currently 
late on their payments.\18\ Several of my former classmates and peers 
have expressed their frustration with the enrollment process, citing a 
complex process and lack of knowledge about the program details. 
Congress should act to simplify the process and increase ease of 
transition into IBR, as well as increasing the emphasis of such 
fallback programs during loan counseling.
---------------------------------------------------------------------------
    \18\ News story, Despite Student Debt Concern, Income-based 
Repayment Lags, Inside Higher Ed, October 23, 2012.
---------------------------------------------------------------------------
                             in conclusion
    All of these improvements will require a strong political will. But 
I'm confident we can get there. I saw Congress and the President rise 
above political gridlock last year to keep student loan rates 
affordable. And I'm seeing significant change at the college level. Six 
hundred colleges have joined the movement to make costs and aid 
transparent. At colleges across the country, students are gearing up to 
make their voices heard once more as July 1 approaches.
    I am excited to work with all of you as we undertake the daunting 
but achievable goal of keeping college within reach for millions of 
American students and families.

    The Chairman. Thank you very much, Mr. Senack.
    Now we'll move to Ms. Donelson.
    Please proceed.

 STATEMENT OF DERRICA DONELSON, STUDENT, LIPSCOMB UNIVERSITY, 
                         NASHVILLE, TN

    Ms. Donelson. First, allow me to express my deepest 
appreciation to Chairman and Hon. Senator Tom Harkin and the 
Honorable Senator Lamar Alexander from the great State of 
Tennessee for inviting me to testify in this meeting. There are 
few events in life that are as important and as life-shaping as 
graduating from college. Thank you for the Federal financial 
aid that has been made available to me and for the opportunity 
to achieve my dreams in life. While the path to graduation has 
not been simple or easy, it has been worth all the efforts.
    Like you said, my name is Derrica Donelson and I am 23 
years old. I will graduate in August 2013 with a Bachelor of 
Business Administration degree in accounting and a Master's 
degree in accounting from Lipscomb University. I graduated from 
Martin Luther King, Jr., Academic Magnet High School, and I am 
the first of the past two generations to graduate with a 
master's degree.
    Upon graduating high school, I had numerous conversations 
with my guidance counselor regarding future plans for college. 
She advised me to complete applications as early as possible. I 
submitted my application for Tennessee State University, Middle 
Tennessee State University, Austin Peay State University, and 
Trevecca Nazarene University. It was at a college fair held at 
my high school where I first learned of Lipscomb University. 
After talking with Lipscomb's representatives, I made the 
decision to submit my application.
    At that time, I had no knowledge of what it would cost to 
attend, but I knew that Lipscomb University was high on my 
list. Before graduating high school, I had an idea of what I 
wanted my major to be. It was my exposure to the accounting 
profession at the Tennessee Society of Certified Public 
Accountants' Accounting Academy that I learned of my real 
interest in accounting. Due to that interest, I researched the 
colleges where I submitted my application and narrowed my 
choices down to Middle Tennessee State University and Lipscomb 
University.
    When it came to making a decision on which school to 
attend, I had to consider many factors. One factor I considered 
was the tuition to attend each school. Lipscomb is a private 
school, and it was significantly more expensive to attend. But 
I did not want cost to be my deciding factor on which school to 
choose. It was extremely important to me to consider things 
such as my culture, and it was important to me to feel as if I 
belonged there.
    I visited both schools, and both schools had great 
accounting programs. However, Lipscomb had a joint BBA and MAcc 
program that allowed me to obtain my Master's degree in 5 
years. It was also closer to home. Lipscomb became my first 
choice, but finances could have created a problem.
    The summer prior to attending Lipscomb, I filled out many 
applications for scholarships and grants. I did not know how I 
was going to pay for school. During my first week at Lipscomb, 
one of the first faculty and staff members that I met was 
Tiffany Summers. She is the director of financial aid. It was 
that day when the concept of paying for college finally hit me. 
Instantly, I broke out crying. My mother was a single parent, 
working two jobs to support our family.
    After my break down, Tiffany was kind enough to sit down 
with me and my mother to help us determine how I was going to 
pay for college. She helped me understand how loans worked and 
the benefits of scholarships. I have received such aid as the 
Tennessee State grant, the Federal Pell grant, Federal Stafford 
subsidized loans, and Federal Stafford unsubsidized loans. I 
also qualified for parent PLUS loans.
    I would like to thank Senator Alexander for his support of 
education in the State of Tennessee. State grants from 
Tennessee have provided me more funding than the Federal 
grants. After my freshman year, I kept a part-time job 
throughout college, I was an officer of a student organization 
for 3 years, and I managed to maintain a grade point average 
above 3.0.
    I do realize that I am going to have some debt after 
obtaining my degree. However, I plan to use my education to 
excel in a career of accounting. Although Lipscomb's tuition 
was expensive, it was still obtainable. When negotiating my 
salary for a job offer, I was sure to include at least $300 a 
month for my loan payments. I feel as if my education would not 
have been possible without the financial aid that I received.
    Looking back, I would not have changed my decision to 
attend Lipscomb University, even with the debt I obtained. I 
would recommend to future college students to do their research 
on what resources are available to them and make an informed 
decision. Once that research is done, begin to utilize those 
resources. It is also important that the student talks to the 
financial aid office, file the FAFSA early, have a good ACT 
score, and maintain a good grade point average.
    The help is out there. It just depends on how determined 
the student is about receiving an education. In order for the 
committee to improve college access and success for all 
students, I would suggest starting at the high school level. 
Keeping the guidance counselors informed on the resources that 
are out there will give the guidance counselors the opportunity 
to pass that information on to the students. An increase in the 
Pell grants would also help make college more affordable for 
more students. Giving more opportunities to students for loan 
forgiveness could help ease the burden of debt.
    I would like to thank the committee for dedicating this 
time to do their research and for including the student's 
perspective in their work.
    [The prepared statement of Ms. Donelson follows:]
                 Prepared Statement of Derrica Donelson
                                summary
    My testimony will start off by first thanking the Senators for 
allowing me the opportunity to take part in this hearing.
    I am going to give a brief overview about who I am and about my 
education. In my senior year of high school, I filled out many 
applications to schools such as Tennessee State University and Middle 
Tennessee State University. I also filled out an application to 
Lipscomb University after attending a college fair. I had the idea that 
I was going to major in accounting, but it wasn't until after I 
attended the Tennessee Society of Certified Public Accountants' 
Accounting Academy when I became absolutely sure that I wanted to major 
in accounting. After doing my research, Lipscomb University became my 
first choice for college.
    Funding my college education was a problem for me, but I did not 
let that stop me from attending the school of my choice. My mother and 
I went to the financial aid's office to see what could be done. My 
mother was always very supportive and very active in the process of 
finding the funds to pay for college. The Director of Financial Aid at 
Lipscomb University was very helpful in the whole process. She was very 
informative and knowledgeable about what was available to the students. 
She gave us information on State grants, Federal grants, Federal loans, 
and parent plus loans.
    I plan to make monthly payments to repay my loans. I have 
calculated an amount in my budget to allocate to loans each month. I 
would suggest that students do the research and talk to the Financial 
Aid office of their desired school to see what is available to them.
                                 ______
                                 
    First, allow me to express my deepest appreciation to Chairman and 
Honorable Senator Tom Harkin and the Honorable Senator Lamar Alexander 
from the great State of Tennessee for inviting me to testify in this 
meeting. There are few events in life that are as important and as life 
shaping as graduating from college. Thank you for the Federal financial 
aid that has been made available to me and for the opportunity to 
achieve my dreams in life. While the path to graduation has not been 
simple or easy, it has been worth all the efforts.
    My name is Derrica Donelson. I am 23 years old. I was born and 
raised in Nashville, TN. I will graduate in August 2013 from Lipscomb 
University with a Bachelor of Business Administration degree in 
Accounting and a Master's degree in Accounting. I was raised in a 
single parent home. I am the oldest of four children. I graduated from 
Martin Luther King, Jr. Academic Magnet High School. I am the first of 
the past two generations to graduate with a master's degree.
    Upon graduating from high school, I had numerous conversations with 
my guidance counselor regarding future plans for college. She advised 
me to complete applications as early as possible. I submitted my 
application to Tennessee State University, Middle Tennessee State 
University, Austin Peay State University, and Trevecca Nazarene 
University. It was at a college fair at my high school, when I first 
learned of Lipscomb University. After talking with Lipscomb's 
representatives, I made the decision to submit my application. At that 
time, I had no knowledge of what it would cost to attend, but I knew 
that Lipscomb University was high on my list.
    Before graduating high school, I had an idea of what I wanted my 
major to be. It was my exposure to the accounting profession at the 
Tennessee Society of Certified Public Accountants' Accounting Academy 
that I learned of my real interest in accounting. Due to that interest, 
I researched the colleges where I submitted an application, and 
narrowed my choices to Middle Tennessee State University and Lipscomb 
University.
    When it came to making a decision on which school to attend, I had 
to consider many factors. One factor I considered was the tuition to 
attend each school. Lipscomb is a private school, and it was 
significantly more expensive to attend. I did not want cost to be the 
deciding factor of choosing one school over the other; there were other 
factors that were extremely important to me, such as the overall 
culture of the campus. It was important for me to feel as if I belonged 
there. I visited both schools, and both schools had great accounting 
programs. However, Lipscomb had a joint BBA/MAcc program that allowed 
me to obtain a Master's degree in 5 years. It was also closer to home. 
Lipscomb became my first choice, but finances could create a problem. 
The summer prior to attending Lipscomb, I filled out many applications 
for scholarships and grants.
    I did not know how I was going to pay for school. During my first 
week at Lipscomb, one of the first faculty and staff members that I met 
was Tiffany Summers. She is the director of financial aid at Lipscomb 
University. It was that day when the concept of paying for college 
finally hit me. Instantly, I started crying. My mother was a single 
parent, working two jobs to support our family. After my break down, 
Tiffany was kind enough to sit down with me and my mother to help us 
determine how I was going to pay for college. She helped me understand 
how loans worked and the benefits of scholarships. I have received aid 
such as the Tennessee State grant, the Federal Pell grant, Federal 
Stafford subsidized loans, and Federal Stafford unsubsidized loans. I 
also received parent-plus loans in order to fund my college education. 
I would like to thank Senator Alexander for his support of education in 
the State of Tennessee. State grants from Tennessee have provided me 
more funding than the Federal grants.
    After my freshman year, I kept a part-time job throughout college. 
I was an officer of a student organization for 3 years. I managed to 
maintain a grade point average above 3.0. As a graduate student, I have 
been interning at Regional Care Hospital Partners. That position has 
allowed me to work full-time. Lipscomb's MAcc program gives me the 
opportunity to work a full-time job and attend class at night.
    I do realize that I am going to have some debt after obtaining my 
degree. However, I plan to use the education that I have earned from 
Lipscomb to excel in a career of accounting. Although Lipscomb's 
tuition was expensive, it was still obtainable. I plan to make monthly 
payments to pay off my loans. When negotiating my salary for a job 
offer, I was sure to include at least $300 a month for loan payments. I 
feel as if my Lipscomb education would not have been possible without 
the financial aid that I received.
    Looking back, I would not have changed my decision to attend 
Lipscomb University even with the debt I obtained. I would recommend to 
future college students to do their research on what resources are 
available to them and make an informed decision. Once that research is 
done, begin to utilize those resources. It is also important that the 
student talks to the financial aid office. It doesn't hurt to ask them 
questions. I would also suggest filing the FAFSA early. It was possible 
for me to receive Federal and State grants, because I filed my FAFSA 
early. Having a good ACT score and maintaining a good grade point 
average also helps. The help is out there, it just depends on how 
serious the student is about receiving an education.
    In order for the committee to improve college access and success 
for all students, I would suggest starting at the high school level. 
Keeping the guidance counselors well-informed on the resources that are 
out there, will give the guidance counselors the opportunity to pass 
that information on to the students. An increase in the Pell grants 
would help make college more affordable for more students. Also, giving 
more opportunities to students for loan forgiveness could help ease the 
burden of debt. I would like to thank the committee for dedicating this 
time to do their research and for including the student's perspective 
in their work.

    The Chairman. Thank you very much, Ms. Donelson. 
Congratulations on your success.
    Dr. Goldrick-Rab. Welcome.

 STATEMENT OF SARA GOLDRICK-RAB, Ph.D., ASSOCIATE PROFESSOR OF 
    EDUCATIONAL POLICY STUDIES AND SOCIOLOGY, UNIVERSITY OF 
                 WISCONSIN-MADISON, MADISON, WI

    Ms. Goldrick-Rab. Good morning, Chairman Harkin, Senator 
Alexander, and members of the committee. Thank you all for this 
opportunity.
    There's never been a more important time to address the 
issue of college affordability. College is now the main road to 
a stable, secure life. And in this age of global knowledge 
markets, it is college-educated workers who will be the main 
driver of the U.S. prosperity. But the research evidence is 
clear. Most families and students find the high cost of college 
attendance unbearable, and it is affecting their choices about 
whether to attend college, where to attend, and even whether or 
not to finish the degrees and certificates they have started.
    As access to college becomes more difficult, public 
frustration is emerging and is spilling over toward other 
societal institutions and, indeed, into the streets. Today's 
Americans are experiencing annual declines in family income, 
yet the net price of attending public colleges and universities 
continues to rise by almost $500 per year. That's after taking 
aid into account.
    In the early 1970s, the maximum Pell grant covered almost 
80 percent of the cost of attending a public 4-year 
institution. Today, it covers barely 30 percent. With so little 
help, even low-income families are left with a bill of about 
$12,000 a year. For many, that is the equivalent of up to 70 
percent of their annual income. And so it is not surprising 
that only about one in 10 find their way to a college degree.
    It has not always been this way. The idea that students 
should bear most of the cost of college comes from a time when 
college cost much less, and powerful people thought markets 
were saviors. Students today are just as responsible as ever 
and just as willing to work for their education, but the task 
is plainly impossible. Covering $12,000 in unmet need requires 
a student to work at least 35 hours a week 52 weeks a year at 
Federal minimum wage. The arrangement is untenable and 
compromises their chances of actually completing their degrees.
    Congress got it right in 1972 when it affirmed the societal 
goal of universal access to postsecondary education as a 
citizen's right. Understanding that low tuition supplemented by 
the Pell grant was the most effective means of supporting 
access, it invested heavily in that key program. But within a 
decade, before the start of the 1980s, the needs of students 
and families fell by the wayside, and our financial aid system 
has never recovered.
    Acting on the theory that higher education would become 
more equitable and efficient by operating on free market 
principles, policymakers began to reduce the availability of 
grant aid, increase the availability of loans, in de facto, 
encouraging rising costs of attendance we see today. This was a 
mistake. The decision to move away from a low tuition approach 
to higher education, coupled with a refusal to regulate how 
institutions set prices, has forced millions of students into 
debt.
    Loans are the new normal because of political choices, not 
because there are no alternatives. College today is what high 
school was a century ago, and yet students are being required 
to both work and borrow for it. The consequences are evident. 
I've spent the last 5 years with a team of researchers on the 
ground in Wisconsin documenting the results.
    I'd like to tell you about Chloe, who I met when she first 
enrolled in a Wisconsin 2-year technical college after 
finishing high school in a small rural Wisconsin town of just 
1,800 people. She wanted to become a vet technician. Since she 
was the first person in her family to even attempt college, 
they had no savings. So she got the Pell, and she figured she 
was set. Not quite.
    As a last ditch effort to ensure that she had enough 
resources for her books, she sold her family's horse, which she 
had raised on the farm as a teenager. It broke her heart. She 
did not know what else to do. But the horse was a short-term 
fix. A month later, she was short of gas money, so she took a 
job at a fast food restaurant. They couldn't offer her enough 
hours, so she took a second job. She went from one job to 
another, attending classes in between, getting home at 
midnight, and getting up at 6 a.m.
    Working left her too little time for studying, but she was 
afraid of loans because she had seen credit card debt nearly 
destroy her mother's finances. She was exhausted, she was 
hungry, and she was stressed. Six months later, I went back to 
check in on Chloe, and college was done. She had dropped out. 
The two jobs plus school routine had left her falling asleep in 
her classes, and she earned a 1.9 GPA, ending up on academic 
probation and kicked out of her program.
    She was furious, she was confused, she was unsure whom to 
talk to, and she failed. Several weeks later, a bank began 
calling. The student loan she had accepted during finals week 
when she was trying to find another way to finish was now 
coming due. Unemployed, in debt, and disillusioned, Chloe was 
dodging their calls.
    Making it this hard to pursue a college degree is weakening 
our country. We have to return to a demonstrably effective 
approach to putting college within reach of all Americans by 
providing a meaningful Pell grant targeted to the neediest 
families, distributed early enough so that they know about it 
to get ready for college, and stripped of all unnecessary 
requirements. It should be matched by a very difficult but very 
necessary effort to drive down college cost by ending the 
ineffective tax credits flowing to wealthy families, stemming 
the tide of indebtedness by capping the interest rate on 
student loans, and using incentives to push States and 
institutions to return to a focus on providing high quality 
postsecondary education, not glorified summer camps, that are 
accessible to all Americans.
    My written testimony contains recommendations aimed at 
accomplishing these goals.
    My grandfather is here today with me because he is a great 
example of what happens when Congress acts on behalf of all 
students. The GI bill made it possible for him to graduate from 
NYU in 1950, the first person in his family to earn a college 
degree. He went on to graduate and postgraduate education and 
is still practicing as a psychoanalyst doing the work he loves, 
alongside my grandmother, a writer. He is, for me, a constant 
reminder of the wonderful lives that Congress has helped the 
hardworking people of this Nation lead by supporting their 
educational dreams.
    I know we can do better right now for students like Chloe 
and the millions like her. Help us find a way back to the 
original goals and intentions of financial aid, and we will all 
benefit.
    Thank you.
    [The prepared statement of Ms. Goldrick-Rab follows:]
             Prepared Statement of Sara Goldrick-Rab, Ph.D.
                                summary
    Federal financial aid aims to help Americans achieve their fullest 
potential not only by opening the doors to college, but also by 
providing them with the financial support necessary to complete their 
studies. But students and families are resoundingly clear--as a nation 
we are not meeting this goal.
    Research indicates that a lack of affordability frequently affects 
educational choices, and discourages the most talented students from 
low-income families from even applying to great colleges and 
universities that match their abilities. Much of Federal financial aid, 
including the Pell grant and tax credits, arrives too late, comes with 
requirements that reduce its effectiveness, and makes a commitment to 
students that is too small and insufficiently matched by efforts from 
States and higher education institutions. Just as troubling, consumer 
confidence in the financial aid system is low. It is difficult to count 
on these resources when they are constantly threatened and ever 
changing; they give the appearance of a Congress unsure of what it is 
trying to accomplish. Most disturbing, student debt has become the new 
normal, and threatens to reshape our national future the way several 
world wars changed the lives of prior generations.
    The most effective public policies are sensible and dependable 
workhorses aimed at doing one job and doing it well. Congress can turn 
the Pell grant into that program by restoring its purchasing power and 
focusing it on the most needy students. An early commitment to the Pell 
grant, provided to the Nation's poorest eighth graders, could jump 
start their academic and financial planning and produce significant 
gains. Taking steps to ensure that States and institutions do their 
part to match the Federal commitment to affordability will bring 
additional resources to the table for the students who most need them. 
Eliminating several unnecessary complexities in the eligibility and 
awarding process will help students retain their aid, increasing their 
chances of finishing what they start.
    It is equally important that the student loan program not be used 
as a piggy bank to finance other aid. We all reap the benefits of a 
democratic nation full of talented, college-educated neighbors and 
friends; we must all therefore bear the collective responsibility of 
properly funding it. Congress and the States need to reverse the 
unconscionable trend of pushing people to take on levels of debt they 
are uncomfortable with, simply because they wish to become better 
educated. Income-based repayment is a safety net. It should not be used 
as an excuse for bigger, more expensive student loans.
    Students are already doing all they can. The evidence is clear: 
Americans are not afraid to work for what they need, and undergraduates 
are no exception. But ensuring that financial aid succeeds in promoting 
educational success means that Congress has to act to get low- and 
middle-income students the grant aid they deserve, providing them with 
a fair shot at reaching the college finish line.
                                 ______
                                 
    Chairman Harkin, Senator Alexander, members of the committee, I am 
honored to testify before you.
                                summary
    The goal of Federal financial aid is to help Americans achieve 
their fullest potential not only by opening the doors to college, but 
also by providing them with the financial support necessary to complete 
their studies. Students and families are resoundingly clear--as a 
nation we are not meeting this goal. Research indicates that a lack of 
college affordability is frequently affecting educational decisions, 
and discouraging the most talented students from low-income families 
from even applying to great colleges and universities that match their 
abilities. Much of Federal financial aid, including the Pell grant and 
tax credits, arrives too late, comes with requirements that reduce its 
effectiveness, and makes a commitment to students that is too small and 
insufficiently matched by efforts from States and higher education 
institutions. Just as troubling, consumer confidence in the financial 
aid system is low. It is difficult to count on these resources when 
they are constantly threatened and ever changing; they give the 
appearance of a Congress unsure of what it is trying to accomplish. 
Your leadership is required to marshal and triage all available 
resources, direct them to where they can be most effective, and build a 
financial aid system that is worthy of our great Nation.
          students and families agree: college is unaffordable
    Many higher education analysts put the concept of affordability in 
quotation marks. While they note that while the official definition is 
the costs paid today relative to the lifetime benefits, and on average 
benefits continue to outweigh the costs, perceptions of affordability 
vary widely.\1\ Despite decades of investment in financial aid and 
numerous efforts to provide tools such as net price calculators, all 
indications are that now more than ever, families feel college is 
essential and at the same time unaffordable. Their feelings are 
understandable, given that nearly all Americans are experiencing annual 
declines in family income (see Figure 1), while the net price of 
attending public colleges and universities continues to rise by almost 
$500 per year.\2\
---------------------------------------------------------------------------
    \1\ Baum, Sandy and Saul Schwartz, 2012. ``Is College Affordable? 
In Search of a Meaningful Definition.'' Washington, DC: Institute for 
Higher Education Policy.
    \2\ Net price is the difference between the institutional cost of 
attendance (the sticker prices) and all grant aid awarded; it is the 
amount of money the student will actual pay to attend school. Author's 
calculations based on The College Board, Trends in College Pricing: 
2012 report. According to Table 7, annual growth in the net tuition, 
fees, room and board at public 4-year institutions between 2009-10 and 
2012-13 was $493.


The Power of the Pell Grant is Diminishing
    In theory, our system of financial aid is supposed to ensure that 
students whose decisions are most affected by tight family finances 
receive the most aid. In the past several decades, we have moved 
further and further away from this approach. The leading need-based aid 
program, the Pell grant, has failed to withstand the tests of time and 
changing demographics. In the early 1970s, the maximum Pell grant 
covered almost 80 percent of the costs of attending a public 4-year 
institution, and today that has eroded to barely 30 percent. The result 
is that even after taking all grant aid and tax credits into account, 
families have to find some way to pay more than $12,000 a year.\3\ For 
a family in the bottom quintile of the income distribution, that 
amounts to more than 70 percent of their annual income.\4\
---------------------------------------------------------------------------
    \3\ Ibid.
    \4\ The median income in the bottom 20 percent is around $17,000.
---------------------------------------------------------------------------
    One reason we are in this situation is that when faced with some 
hard choices, most States quietly opted to shift the costs of funding 
their public colleges and universities onto the backs of students and 
families. In doing so, they contributed to the erosion of the Pell by 
withdrawing their efforts to keep costs down.\5\ Rather than openly 
debating the tradeoffs between investing in colleges or prisons or 
healthcare, legislators simply cut appropriations and then attacked 
higher education institutions for responding with easily anticipated 
tuition hikes. In many States, the constituency of college graduates 
remains relatively small, and those most affected--children with great 
ambitions and displaced workers returning to get the training they need 
for economic stability--voice little resistance as the buck is passed 
to them. It is Congress that must act on their behalf, bringing States 
back to the table and ensuring that they do their part.
---------------------------------------------------------------------------
    \5\ Weerts, D., Sanford, T., Reinert, L. 2012. College Funding in 
Context: Understanding the Difference in Higher Education 
Appropriations Across the States. Demos.
---------------------------------------------------------------------------
    Students are already doing all they can. Americans are not afraid 
to work for what they need, and undergraduates are no exception. The 
problem is that today, it is no longer possible to cover all of the 
costs of college while working part-time. Covering those remaining 
costs at a public university would require a student to work at least 
35 hours a week, 52 weeks a year at the Federal minimum wage. The work 
penalty contained in the Federal needs analysis means that those 
earnings would quickly diminish her access to aid, causing her to work 
even more. Such extensive work hours would almost certainly compromise 
her chances of completing college, particularly in a timely fashion, 
rendering all of that effort far less meaningful.\6\ This makes the 
relative size of grants like the Pell more important than ever. But 
unfortunately, the trend has been away from grants and toward loans, a 
subtle move that has shifted societal responsibilities onto the backs 
of individuals.
---------------------------------------------------------------------------
    \6\ Perna, L.W.: Understanding the working college student: New 
research and its implications for policy and practice. Stylus 
Publishing. Stylus Publishing, LLC. 2010.
---------------------------------------------------------------------------
Student Loans Are Too Often Required, Not Optional
    When originally conceived, student loans were intended to 
facilitate choices. That is no longer the case--most students are left 
with no viable way to afford college without taking on debt. The result 
is a forced choice that pits students against their schools, with 
educators arguing that ``debt is good'' while students wish to at least 
have a genuine choice in the matter. Now that unmet need at public 
universities has reached $12,000 a year, current students are now faced 
with prospective debt of upwards of $48,000, and that is if they finish 
in 4 years. Or, they could both work and borrow, a scenario that was 
quite uncommon when their parents went to college, but now seems 
inevitable. Again, if they have to work too much, they are much less 
likely to complete and in turn are left with substantial debt and no 
degree.\7\
---------------------------------------------------------------------------
    \7\ Fry, Richard. 2012. ``A Record One-in-Five Households Now Owe 
Student Loan Debt.'' Washington, DC: Pew Social & Demographic Trends; 
Goldrick-Rab, Sara, Douglas N. Harris, and Philip A. Trostel. 2009. 
``How and Why Financial Aid Does (or Doesn't) Matter for College 
Success.'' In Higher Education: Handbook of Theory and Research (Vol. 
24), ed. John C. Smart, 1-45.
---------------------------------------------------------------------------
    Under these constraints, the Pell grant has become a gateway to 
student loans. Student debt is the new normal, and threatens to reshape 
our national future the way several world wars changed the lives of 
prior generations. Today, 40 percent of households headed by an adult 
under the age of 35 hold educational debt.\8\ When considering whether 
that is acceptable, it is important to note that it is far from the 
``manageable'' rate of 8 percent of income--students with degrees owe 
as much as 24 percent of their take-home pay to the Federal Government. 
Many former students who left unable to complete their degrees owe even 
more.\9\ Over the long haul, this points to a serious need to plan for 
a new era in which debt is done away with, and we should take initial 
steps to begin now.\10\
---------------------------------------------------------------------------
    \8\ Fry, Richard. 2012. ``A Record One-in-Five Households Now Owe 
Student Loan Debt.'' Washington, DC: Pew Social & Demographic Trends.
    \9\ Wei, Christina Chang and Laura Horn. 2013. ``Federal Student 
Loan Debt Burden of Noncompleters.'' NCES Report 2013-155.
    \10\ For one smart approach, see Dannenberg, Michael and Mamie 
Voight. 2013. ``Doing Away with Debt: Using Existing Resources to 
Ensure College Affordability for Low and Middle-Income Families.'' 
Education Trust, Washington, DC.
---------------------------------------------------------------------------
              affordability affects educational decisions
    Both common sense and research evidence tell us that when students 
feel that college is unaffordable it has real consequences for their 
educational decisions.\11\ The students for whom the current financing 
system is working--those at the top of the income distribution--have 
increased their rates of bachelor's degree completion by 50 percent 
over the last 40 years. That is the only group of students with a 
greater than 1 in 2 chance of completing a bachelor's degree. The odds 
range from 9 to 30 percent for everyone else.\12\ While this is partly 
because of the tight relationship between family income and academic 
preparation, the k-12 experience alone does not explain why origins 
determine destinations so clearly. Recent randomized experiments 
indicate that the current system needlessly leaves even the most 
talented poor kids far, far behind in a multitude of ways. In addition 
to failing to meet their need with aid and pushing them into debt, 
government and educational institutions fail to engage in meaningful 
outreach, impose fees for college applications that create additional 
barriers, hinder access to aid by veiling it beneath masses of 
requirements that even college-educated, financially literate adults 
have difficulty navigating.\13\
---------------------------------------------------------------------------
    \11\ Detailed reviews of the research on the effectiveness of 
different types of financial aid include: Bettinger, Eric. 2012. 
``Financial Aid: A Blunt Instrument for Increasing Degree Attainment'' 
in Andrew Kelly & Mark Schneider (Eds), Getting to Graduation: The 
Completion Agenda in Higher Education, John Hopkins Press; Castleman, 
Benjamin and Bridget Terry Long. 2012. ``Looking Beyond Enrollment: The 
Causal Effect of Need-Based Grants on College Access, Persistence, and 
Graduation.''; Scott-Clayton, Judith. 2012. ``Information Constraints 
and Financial Aid Policy.'' National Bureau of Economic Research. 
Working Paper 17811. Deming, David and Susan Dynarski. 2009. ``Into 
College, Out of Poverty? Policies to Increase the Post-Secondary 
Attainment of the Poor.'' National Bureau of Economic Research. Working 
Paper 15387; Goldrick-Rab, Sara, Douglas N. Harris, and Philip A. 
Trostel. 2009. ``How and Why Financial Aid Does (or Doesn't) Matter for 
College Success.'' In Higher Education: Handbook of Theory and Research 
(Vol. 24), ed. John C. Smart, 1-45;
    \12\ Bailey, Martha J. and Susan Dynarski. 2011. ``Inequality in 
Post-Secondary Education.'' In Whither Opportunity?'', ed. Greg Duncan 
and Richard Murnane, 117-32. New York, NY: Russell Sage Foundation.
    \13\ Bettinger, Eric P., Bridget T. Long, Philip Oreopoulos, and 
Lisa Sanbonmatsu. 2013. ``The Role of Application Assistance and 
Information in College Decisions: Results from the H&R Block FAFSA 
Experiment.'' The Quarterly Journal of Economics, 127(3), 1205-42. 
Hoxby, Caroline M. and Christopher Avery. 2012. ``The Missing `One-
Offs': The Hidden Supply of High-Achieving, Low-Income Students.'' 
National Bureau of Economic Research. Working Paper 18586.
---------------------------------------------------------------------------
    Our unwillingness to confront this affordability challenge is 
holding back students all over the Nation. In communities such as 
Crockett County, TN, where the college-going rate dropped 20 percentage 
points in recent years,\14\ the pain is real. To tell you more about 
what it looks and feels like, I will turn next to students in the 
heartland of Wisconsin, where like so many in the country, only a small 
fraction of citizens who want to earn a college degree can afford to do 
so.
---------------------------------------------------------------------------
    \14\ Tennessee Higher Education Commission. 2010. ``College-going 
Rate of Tennessee Public High School Graduates.'' Nashville, TN: THEC.
---------------------------------------------------------------------------
    Since 2008, my research team has followed a group of 3,000 Pell 
grant recipients as they pursue college degrees at Wisconsin's 42 
public colleges and universities.\15\ Our efforts have included a 
randomized experiment with a private financial aid scholarship, but 
even more importantly, we have repeatedly interviewed 50 students every 
6 months whether or not they remained enrolled. I would like to 
introduce you to one of them, a woman I'll call Chloe, whom I first met 
when she enrolled in a Wisconsin technical college soon after 
completing high school in a small, rural Wisconsin town of just 1,800 
people. Tall and blond with bright blue eyes, Chloe impressed me with 
her rapid-fire talk about a passion for animals. At school to become a 
veterinary technician, she was excited to be the first in her family to 
attempt college, and eager to get started. Since neither she nor her 
parents ever figured she'd make it to college, they had no savings. As 
a result, she made a reasoned decision to attend a less expensive 2-
year school, and qualified for a Pell grant--and with that, she 
thought, she was ready to go. Almost. During that first interview 
together, in a near whisper, she confided that as a last-ditch effort 
to ensure that she had enough resources for books, she'd sold her 
family's horse, whom she'd raised on their farm as a teenager. It broke 
her heart to do it, she said, but she didn't have other ideas. The 
horse, it turned out, was a short-term fix: a month into school, Chloe 
was enjoying her classes but was regularly short of the gas money 
needed to commute to school. To cope, she took a job at a fast food 
restaurant, but they couldn't offer her enough hours, and so she found 
a second job at a fabric store, working at the first job in the morning 
and the other at night. She attended class in-between, getting home at 
midnight, and beginning her day again at 6 am. Working left little time 
for studying, but she feared loans, since she had seen credit card debt 
nearly destroy her mother's finances. Running from job to school to 
job, she looked like many of the Nation's Pell recipients: exhausted, 
hungry, and stressed--hardly the conditions that promote learning.
---------------------------------------------------------------------------
    \15\ See www.finaidstudy.org.
---------------------------------------------------------------------------
    Six months later, I went back to check in on Chloe, hoping to see 
that she'd acclimated to the hectic schedule and gotten some advising. 
But college was done--she'd dropped out. The two-job-plus-school 
routine led her to fall asleep in her classes, and she'd earned a 1.9 
GPA--putting her on academic probation. Her program of study didn't 
allow for that, and kicked her out.
    Furious, confused, and unsure whom to talk to, Chloe bailed. 
Several weeks later, a bank began calling--the student loan she'd 
accepted during finals week, when she was trying to find another way 
forward, was now coming due. Unemployed, in debt, and disillusioned, 
Chloe was dodging their calls.
    It is not supposed to be this hard to pursue further education, and 
it does not have to be. We do not need new resources--we need to put 
the ones that already exist to work where they are needed most. 
Ensuring that students from low-income families have more of their 
financial need covered without having to lean so heavily on work and 
loans is an effective strategy to increasing their chances of college 
completion. In an experiment that took place during the recent 
recession, my colleagues and I examined the privately funded Fund for 
Wisconsin Scholars grant, which is distributed by lottery among 
eligible first-year undergraduates attending Wisconsin's 13 public 
universities. Our analysis of that program produced evidence that need-
based financial grants administered in the current system are effective 
at inducing students to remain enrolled, earn slightly more credits, 
and get somewhat better grades. Critically, these effects appear to be 
stronger when students receive more grant aid. For every $1,000 
reduction in unmet need, we estimated a 2.8 to 4.1 percentage point 
increase in the likelihood that recipients of financial aid would 
persist into their second year of study.\16\ Increased grant aid to 
low-income and working class students is a strategy that pays off.
---------------------------------------------------------------------------
    \16\ Goldrick-Rab, Sara, Douglas N. Harris, Robert Kelchen, and 
James Benson. 2012. ``Need-Based Financial Aid and College Persistence: 
Experimental Evidence from Wisconsin.'' Madison, WI: Institute for 
Research on Poverty Discussion Paper 1393-12.
---------------------------------------------------------------------------
    But instead of targeting our investments in the Pell grant to 
ensure that it is sizable enough to make a real difference, Congress, 
States, and institutions of higher education have been busily spreading 
the wealth. Those efforts may be politically popular, but they greatly 
diminish the effectiveness of the dollars spent.\17\ Financial 
assistance provided based on merit without attention to need has been 
shown to be ineffective at changing educational outcomes.\18\ Yet many 
States and large numbers of colleges and universities focus their 
resources on merit aid, and even pull back institutional aid from needy 
students when they gain outside scholarships. In effect, they match the 
Federal commitment to the Pell grant program by redirecting their own 
spending elsewhere, including spending on country-club amenities that 
further alienate working students from their campuses and diminish 
their chances of success.\19\ This must stop.
---------------------------------------------------------------------------
    \17\ Schneider, M. and Sara Goldrick-Rab. 2011. ``College Aid, The 
Right Way.'' Chattanooga Times Free Press. October 30.
    \18\ Bowen, William G., Matthew M. Chingos, and Michael S. 
McPherson. Crossing the Finish Line: Completing College at America's 
Public Universities. Princeton: Princeton University Press, 2009; 
Brookings Institution State Grant Aid Study Group. 2012. Beyond Need 
and Merit: Strengthening State Grant Programs. Washington, DC; 
Cornwell, Christopher M., Kyung Hee Lee, and David B. Mustard. 2005. 
``Student Responses to Merit Scholarship Retention Rules.'' The Journal 
of Human Resources 40, no. 4 : 895-917; Heller, Donald. 2001. The 
Effects of Tuition Prices and Financial Aid on Enrollment in Higher 
Education: California and the Nation. Ed Fund.; Heller, Donald. 1997, 
``Student Price Response in Higher Education: An Update to Leslie and 
Brinkman.'' Journal of Higher Education 68, no. 6 (1997): 624-59.
    \19\ According to one estimate, about two-thirds of Pell dollars 
distributed to private not-for-profit institutions are simply used to 
displace institutional aid students would have otherwise received. 
Public institutions do not appear to engage in this behavior, and spend 
far less aid on non-needy students. Turner. Lesley J. 2013. ``The Road 
to Pell is Paved with Good Intentions: The Economic Incidence of 
Federal Student Grant Aid.'' On the use of institutional resources for 
amenities see Jacbob, Brian, Brian McCall, and Kevin M. Stange. 2013. 
``College as Country Club: Do Colleges Cater to Students' Preferences 
for Consumption?'' National Bureau of Economic Research. Working Paper 
18745.
---------------------------------------------------------------------------
                  focus, trust, and commitment matter
    The most effective public policies are sensible and dependable 
workhorses aimed at doing one job and doing it well. Congress needs to 
turn the Pell grant into that program. To that end, I recommend the 
following:

    1. Restore the power of the Pell grant by doubling its effective 
amount and focusing it on the most needy students. Three actions should 
be taken immediately to accomplish this:

      a. Allow the expected family contribution (EFC) to go negative 
when a student's family income falls below the subsistence level as 
reflected by the income protection allowance. The current minimum EFC 
of zero caps financial need and need-based student aid at the cost of 
attendance, rendering college less affordable for students who need 
grant aid for their college education in order to stand a chance of 
succeeding and rising out of poverty.
      b. Offer States incentives to agree to maintenance-of-effort 
provisions that ensure the Pell grant is supplemented not supplanted by 
State actions. More States should be encouraged to follow the lead of 
New York, where tuition is guaranteed not to increase more than $300 a 
year over the next 5 years, and regular investments in financial aid 
also will occur.\20\
---------------------------------------------------------------------------
    \20\ Alexander, King F., Thomas Harnisch, Daniel Hurley, and Robert 
Moran. April 2010. ``Maintenance of Effort: An Evolving Federal-State 
Policy Approach to Ensuring College Affordability,'' American 
Association of State Colleges and Universities, A Higher Education 
Policy Brief. Also see Harnisch, Thomas L. July 2012. ``Update on the 
Federal Maintenance of Effort Provision: Reinforcing the State Role in 
Public Higher Education Financing.'' American Association of State 
Colleges and Universities, A Higher Education Policy Brief.
---------------------------------------------------------------------------
      c. Experiment with giving higher education institutions with 
demonstrable success in moving Pell recipients toward degrees some 
incentives to devote more of their own resources to matching the 
Federal investment in Pell. About $5 billion in funding for the Pell 
program could be raised with the assistance of private not-for-profit 
institutions that currently supplant rather than supplement the Pell 
grant.\21\
---------------------------------------------------------------------------
    \21\ Turner, Lesley J. 2013. ``The Road to Pell is Paved with Good 
Intentions: The Economic Incidence of Federal Student Grant Aid.''

    2. Encourage more Pell recipients to become academically and 
financially prepared for college by letting students and their families 
know early and often that the Pell awaits them. Too many eighth graders 
have no idea they are college-bound and therefore do not get ready. 
Their families are not getting any wealthier as they wait, and an early 
commitment of financial aid could make a big difference. Fund the 
demonstration early commitment Pell program for eighth graders 
receiving free and reduced price lunch that was authorized in the 
Higher Education Act, and rigorously evaluate it.\22\ The President's 
Budget includes a $67 million request for research innovative on 
financial aid programs that should be used for this purpose.\23\
---------------------------------------------------------------------------
    \22\ Kelchen, Robert and Sara Goldrick-Rab. 2013. ``Accelerating 
College Knowledge: Examining the Feasibility of a Targeted Early 
Commitment Pell Grant Program.'' Madison, WI: Institute for Research on 
Poverty Discussion Paper 1405-13.
    \23\ For additional details on the research needed to better inform 
future policymaking regarding financial aid, see Harris, D.N. & Sara 
Goldrick-Rab (2012). ``Improving the Productivity of Education 
Experiments: Lessons from a Randomized Study of Need-Based Financial 
Aid.'' Educational Finance and Policy, 7(2); 143-169.
---------------------------------------------------------------------------
    3. Bring more resources to the most talented Pell recipients who 
earn private scholarships by ending award displacement so that they can 
gain the full monetary value of that philanthropic investment. Award 
displacement occurs when receipt of an outside scholarship, leads to a 
reduction in other forms of financial aid, especially grants. The 
consequence is that a student who has worked hard to gain the 
scholarship experiences no net financial gain, and therefore 
improvement in his or her ability to pay for college. This problem 
should be addressed with three actions:

      a. Expand the definition of cost of attendance in section 472 of 
the Higher Education Act to include other common living expenses, such 
as the cost of a computer and student health insurance.
      b. Increase the overaward tolerance from $300 to $2,500 in 34 CFR 
673.5(d) and (e), 34 CFR 682.604(i), 34 CFR 685.303(e), and Section 
443(b)(4) of the Higher Education Act of 1965 [42 U.S.C. 2753 (b)(4)]. 
Rather than help stretch Federal funds further, overaward regulations 
simply let institutions off the hook for meeting the needs of their 
students.
      c. Strike references to scholarships and fellowships from the 
definition of estimated financial assistance and the coordinating 
restrictions in 34 CFR 673.5(c)(1)(vi) and (viii), 20 U.S.C. 
1078(a)(2)(C)(ii)(II), 20 U.S.C. 1087vv(j)(1) and 26 U.S.C. 25A(g)(2) 
and by adding exclusions for scholarships and fellowships in 34 CFR 
673.5(c)(2).\24\
---------------------------------------------------------------------------
    \24\ The details of these proposals originate with the authors of a 
forthcoming white paper from the National Scholarship Providers 
Association, to be released in May 2013. Details can be obtained from 
NSPA executive director Amy Weinstein, at 
[email protected].

    4. Support students who work hard and keep their student debt low 
by expanding the income protection allowance and reducing the 
assessment rate on student earnings. Students work while attending 
school because they need the money; removing their financial aid based 
on those earnings creates perverse incentives and encourages them to 
take on more debt. This especially hurts single parents pursuing 
college degrees.\25\ Raising the income protection allowance (IPA) by 
$2,000 will help ensure that more of their earnings are used to prevent 
additional debt, and lowering the assessment rate from 50 percent to 40 
percent will further promote that goal.
---------------------------------------------------------------------------
    \25\ Goldrick-Rab, S. & Kia Sorensen (2010). ``Unmarried Parents in 
College.'' Future of Children, v20(2): 179-203; Shaw, K., Goldrick-Rab, 
S., Mazzeo, C., & Jacobs, J. (2006). Putting Poor People to Work: How 
the Work-First Idea Eroded College Access for the Poor. New York: 
Russell Sage Foundation.
---------------------------------------------------------------------------
    5. Further focus the Pell on college completion by reducing 
complexities and requirements that prevent the students who receive it 
from keeping it until they complete degrees. Eliminate the need to re-
file the FAFSA for recipients who are continuously enrolled at the same 
institution. Require students to file only for a change in 
circumstances that increases their need, nudging them to maintain their 
financial aid and keeping their net price more stable from year to 
year.
    In addition, given that most students in the Nation mainly 
experience financial aid in the form of student loans, it is important 
that their costs be stabilized. We cannot expose American families who 
are experiencing no growth in family income to the full brunt of the 
market. Students deserve the same protections provided to home-buyers 
and small business owners; a cap on interest rates is required to 
ensure that interest rates do not skyrocket.
                      immediate action is required
    To summarize, I hope you take away these three things from my 
remarks today.
    First, need-based grants matter for students' educational success. 
Most students in this country, particularly working class and low-
income students, will not earn a college degree without them. If you 
want to increase college access, affordability, and completion, the 
Pell grant must be restored to its full capacity. It has been neglected 
and reconstituted in ways that make it harder, not easier, for 
America's working poor families to obtain. We should be doing the 
opposite.
    Second, the student loan program should not be used as a piggy bank 
to finance other aid. We all reap the benefits of a democratic nation 
full of talented, college-educated neighbors and friends; we must all 
therefore bear the collective responsibility of properly funding it.
    Third, Congress and the States must reverse the unconscionable 
trend of pushing people to take on levels of debt they are 
uncomfortable with, simply because they wish to become better educated. 
Income-based repayment is a safety net. It should not be used as an 
excuse for bigger, more expensive student loans.
    Debt aversion is real for real students. The prospect and reality 
of high levels of student loan debt have multiple negative consequences 
for students like Chloe.
    We can do better by her and millions like her.
    
    

    The Chairman. Thank you very much. Where is your 
grandfather? Where is he? Oh, right there. Thank you very much.
    I always said the GI bill after World War II--out of the 
ashes of World War II and the debacle of the Great Depression, 
the GI bill built the middle class in America. Thank you for 
being here. I also had the GI bill, too. Thank you very much.
    Ms. Brooks, welcome and please proceed.

 STATEMENT OF VIVICA BROOKS, STUDENT, BOWIE STATE UNIVERSITY, 
                           BOWIE, MD

    Ms. Brooks. Thank you. Good morning, Chairman Harkin, 
Ranking Member Alexander, and distinguished members of the 
committee. Thank you for the opportunity to speak today about 
the issue of college affordability and my personal experience.
    Again, my name is Vivica Brooks, and I am a senior at Bowie 
State University in Bowie, MD, majoring in business with a 
concentration in marketing. I chose Bowie State for its 
convenient location, its exceptional college of business, and, 
most importantly, its affordable tuition. The cost of tuition 
was so important to me because I accepted the full burden of 
paying for my education.
    As I applied for financial aid, I found the FAFSA process 
moderately simple to complete. In my first year, I chose to 
receive a Federal direct subsidized loan. I chose the 
subsidized loan over the unsubsidized loan because the interest 
rate is lower and would be less of a financial burden to me 
when I graduate from college.
    Throughout my matriculation of college, I worked part-time 
to cover the remaining tuition balances and costs of living. At 
times, I struggled with juggling class and work, but I managed 
to pay for school and maintain my grades throughout my freshman 
year. I took a year off from school when I gave birth to a 
bouncing baby boy in December 2009. I returned to school in the 
fall of 2010 and accepted both the Federal Pell grant and 
Federal direct sub loan. I was now a successful student and 
mother, juggling academics, work, and family life.
    Federal funding attributed greatly to my ability to engage 
in the full college experience. Without it, I would be in a 
predicament where I spent more hours working to pay my tuition 
than focusing on my education itself. Currently, I am a senior 
at Bowie State, working 40 hours per week. I take courses both 
online and in class in the evenings.
    I am still a recipient of the Federal Pell grant and the 
Federal direct sub loan. In addition, I now receive a Maryland 
Educational Assistance Scholarship and a Bowie State Mission-
based scholarship. I recently learned that I have reached my 
maximum limit for subsidized loans, and I am in the process of 
planning how I will pay for my last semester this coming fall.
    Looking back on my college career and how I secured my 
financial aid, there are a few things that I would have done 
differently or wish I had more information. First, I would have 
conducted more research on other possible aid opportunities. 
And, second, I would have saved more throughout the year so I 
would not have accumulated the amount of debt that I will have 
to repay following graduation.
    With respect to my peers and friends, I feel that many 
navigate through the financial aid process timidly, 
undereducated, and otherwise unconsciously. Some of my peers 
fear the debt that loans will bind them in, and others are ill-
educated and believe that they may not qualify for loans for 
various reasons, such as grades from high school or other 
background information.
    Every opportunity to further educate the student population 
and prospective student population should be taken. Overall, 
Federal programs, private programs, and scholarships have 
played a tremendous role in my ability to afford college, and 
for that, I am truly grateful. I encourage Congress to continue 
to recognize and reassess the needs of students in order to 
create and modify existing programs for qualifying individuals 
that help lessen the debt students face after graduating.
    In closing, success can be accomplished not only by 
responsible stewardship, but also by obtaining a plethora of 
knowledge through higher education. Therefore, I believe it is 
your duty as lawmakers to continue to lay the foundation and 
provide our citizens with programs designed to ensure 
affordable higher education for all.
    Thank you for this opportunity to speak with you, and I am 
happy to answer any questions that you may have.
    [The prepared statement of Ms. Brooks follows:]
                  Prepared Statement of Vivica Brooks
                                summary
    Chairman Harkin, Ranking Member Alexander, and distinguished 
members of the committee, thank you for the opportunity to speak today 
about the issue of college affordability and my personal experience. My 
name is Vivica Brooks, and I am a senior at Bowie State University in 
Bowie, MD majoring in Business with a concentration in Marketing.
    I chose Bowie State for its convenient location, its exceptional 
College of Business and most importantly, its affordable tuition. The 
cost of tuition was so important to me because I accepted the full 
burden of paying for my education. As I applied for financial aid I 
found the FAFSA process moderately simple to complete. I chose to 
receive a Federal Direct Subsidized Loan. I chose the subsidized loan 
over the unsubsidized loan because the interest is lower and would be 
less of a financial burden to me when I graduate from college.
    Throughout my matriculation of college I worked part-time to cover 
the remaining tuition balances and costs of living. At times I 
struggled with juggling class and work but I managed to pay for school 
and maintain my grades throughout my freshman year. I took a year off 
from school for the fall of 2009 and spring 2010 semesters when I gave 
birth to a bouncing baby boy in December 2009. I returned to school in 
the fall of 2010 and accepted the Federal Pell grant and Federal Direct 
Sub Loan. I was now a successful student and mother juggling academics, 
work, and family life all thanks to having Federal funding.
    I am currently a senior at BSU working 40 hours per week. I take 
courses both online and in class in the evenings. I am still a 
recipient of the Federal Pell grant and Federal Direct Sub Loan. In 
addition, I now receive Maryland Educational Assistance scholarship, 
and a BSU Mission-based scholarship. I recently learned that I have 
reached my maximum limit for subsidized loans and am in the process of 
planning how I will pay for my last semester this coming fall.
    Looking back on my years at Bowie State and how I secured my 
financial aid, there are a few things that I would have done 
differently or wished I had more information. I would have done more 
research about other possible aid opportunities. I also would have 
saved more throughout the years so I would not have accumulated the 
amount of debt that I will have to repay following graduation. With 
respect to my peers and friends, I feel that many navigate through the 
financial aid process timidly, under-educated, and otherwise 
unconsciously. Some of my peers fear the debt that loans will bind 
them. Others are ill-educated and believe that they may not qualify for 
loans for various reasons, such as grades, or other background 
information.
    Overall, Federal programs, private programs, and scholarships have 
played a tremendous role in my ability to afford college, and for that 
I'm truly grateful. I encourage Congress to continue to recognize and 
reassess the needs of students in order to create and modify existing 
programs for qualifying individuals that help lessen the debt students 
face after graduating. In closing, success can be accomplished not only 
by responsible stewardship but also by obtaining a plethora of 
knowledge though higher education. Therefore, I believe it is your duty 
as law makers to continue to lay the foundation and provide our 
citizens with programs designed to ensure affordable higher education 
for all.
    Thank you for this opportunity to speak with you and I am happy to 
answer any questions you may have.
                                 ______
                                 
    Chairman Harkin, Ranking Member Alexander, and distinguished 
members of the committee, thank you for the opportunity to speak today 
about the issue of college affordability and my personal experience. My 
name is Vivica Brooks, and I am a senior at Bowie State University in 
Bowie, MD majoring in Business with a concentration in Marketing. My 
brother, who is also a student at Bowie State, and I were raised in a 
modest two-parent middle-class family in Maryland.
    At an early age I knew I wanted to go to college and with the 
support of my family, teachers, and friends I was confident in my 
decision. In my senior year of high school I began to research 
potential colleges and universities. I narrowed my search to five 
universities: the University of Maryland, College Park, University of 
Maryland, Baltimore County, Howard University, Delaware State 
University, and Bowie State University. Each of these institutions 
offered me the convenience of being close to home; however, 
affordability played a huge role in my ultimate decision. I chose Bowie 
State for its convenient location, its exceptional College of Business 
and most importantly, its affordable tuition. The cost of tuition was 
so important to me because I accepted the full burden of paying for my 
education. In my senior year of high school, my counselor and I had 
several discussions about financial aid scholarship opportunities. She 
directed me to utilize the Internet and research FAFSA, State, and 
private opportunities. My teachers were also instrumental in aiding me 
with navigating through various scholarship applications. I also found 
and applied for several private scholarships as well as completing a 
FAFSA.
    I found the FAFSA process moderately simple to complete. Upon my 
admittance into Bowie State I was given the opportunity to select from 
a list of offered loans. However, because of my dependent status my 
household income was not considered low-income and I was only offered 
enough funding to cover a portion of my tuition. Since my parents were 
not financially responsible for my education; I chose to receive a 
Federal Direct Subsidized Loan. I chose the subsidized loan over the 
unsubsidized loan because the interest is lower and would be less of a 
financial burden to me when I graduate from college.
    During my freshman year I worked part-time to cover the remaining 
balance of my tuition through a payment plan. The benefit of the 
payment plan was that it allowed me to make more affordable monthly 
payments instead of paying the term in-full upon registration. At times 
I struggled with juggling class and work but I managed to pay for 
school and maintain my grades throughout my freshman year. I took a 
year off from school for the fall of 2009 and spring 2010 semesters 
when I gave birth to a bouncing baby boy in December 2009. With the new 
addition to my family, my finances changed drastically. As I planned to 
return to school in the fall of 2010, I completed my FAFSA and learned 
that I was eligible for the Federal Pell grant. I returned to school in 
the fall of 2010 and accepted the Federal Pell grant and Federal Direct 
Sub Loan. These funds covered my tuition in full and were a great help. 
Without these funds, I would not have been financially stable enough to 
return to school. In my junior year I was offered and accepted similar 
loans, grants, and scholarships of the year prior. The flexibility of 
no longer having such a grand financial burden allowed me the time to 
work less hours and participate in school organizations and activities. 
In the fall of 2011, I became a member of BSU's Golden Girls 
Cheerleading Squad. I was now a successful student-athlete-and mother 
juggling academics, work, and family life all thanks to having Federal 
funding.
    I am currently a senior at BSU working 40 hours per week. I take 
courses on-line and in class in the evenings. I enjoy this hybrid 
schedule. It is extremely convenient and practical for my lifestyle. I 
am still a recipient of the Federal Pell grant and Federal Direct Sub 
Loan. In addition, I now receive Maryland Educational Assistance 
scholarship, and a BSU Mission-based scholarship. I recently learned 
that I have reached my maximum limit for subsidized loans and am in the 
process of planning how I will pay for my last semester this coming 
fall. With regards to my future after graduation I have a few concerns. 
Looking back on my years at Bowie State and how I secured my financial 
aid, there are a few things that I would have done differently or 
wished I had more information. First, I would have done more research 
about other possible aid opportunities. I also would have saved more 
throughout the years so I would not have accumulated the amount of debt 
that I will have to repay following graduation. Additionally, I would 
have familiarized myself more with the terms of my loan agreement. I 
was not previously aware that there was a limit to the total amount one 
could receive in subsidized loan funding; I regret not knowing because 
I could have saved more and utilized the funds from my previous years 
at BSU more efficiently.
    With respect to my peers and friends, I feel that many navigate 
through the financial aid process timidly, under-educated, and 
otherwise unconsciously. Some of my peers fear the debt that loans will 
bind them. Others are ill-educated and believe that they may not 
qualify for loans for various reasons, such as grades, or other 
background information. There are others who would rather just pay for 
it all themselves and rather take on the burden of working full-time 
and going to school part-time.
    Overall, Federal programs, private programs, and scholarships have 
played a tremendous role in my ability to afford college, and for that 
I'm truly grateful. The Federal Government's role in financing 
student's education, especially lower-income students like myself where 
affordability is critical, has been a job well-done. I also appreciate 
that Congress reduced interest rates on Federal student loans, which is 
critical to making higher education more affordable. I encourage 
Congress to continue to recognize and reassess the needs of students in 
order to create and modify existing programs for qualifying individuals 
that help lessen the debt students face after graduating. I will 
continue to be optimistic about the future of Federal funding and the 
affordability of tuition for students.
    In closing I would like to state that the economic future of the 
United States relies heavily on the success of its citizens. Success 
can be accomplished not only by responsible stewardship but also by 
obtaining a plethora of knowledge through higher education. Therefore, 
I believe it is your duty as lawmakers to continue to lay the 
foundation and provide our citizens with programs designed to ensure 
affordable higher education for all.
    Thank you for this opportunity to speak with you and I am happy to 
answer any questions you may have.

    The Chairman. Thank you very much, Ms. Brooks.
    Thank you all very much for your great statements.
    We'll begin now a round of 5-minute questions. I want to 
start with Mr. Senack.
    You mentioned about simplifying the income-based repayment 
process. And, basically, you pointed out only one in five 
eligible are taking advantage of this. Why? Why is that?
    Mr. Senack. Sure. That's a great question. Thank you, 
Senator. I think it's a combination of different things. This 
was underscored by the fact that I was actually in a meeting on 
the Hill a few weeks ago, and a couple of the staffers here 
were talking about how they were struggling to enroll in the 
IBR program.
    I think it's just a combination of two things, one, just 
making sure the information is available and they're well-
educated about their options. I think improving loan 
counseling, particularly exit counseling, is critical in 
communicating that information. I don't remember the specific 
number, but a majority of students don't even recall having 
gone through loan counseling a year after leaving school, and 
that seems like a red flag. We should definitely improve exit 
counseling.
    Also just simplify the process. It seems like there are 
some issues in terms of getting the application approved or 
just administration of the actual paperwork.
    The Chairman. Enlighten me on this. When a student 
graduates and they have this debt, do they get some kind of 
proactive information about income-based repayment, or do they 
have to apply and ask about it? Does the government, the 
Federal student loan program, notify them and give them 
information about it? Do you know the answer to that question?
    Mr. Senack. I actually don't remember too well my exit 
counseling. I mean, I imagine it's included in exit counseling. 
I think it would be good to make it more of a priority, and 
that includes following up in years after. But it can be 
difficult to track down the information.
    The Chairman. Let me ask all of you about loan counseling. 
You all noted in your testimonies that institutions of higher 
education are required to provide mandatory entrance and exit 
loan counseling for student borrowers. Yet a recent poll showed 
that 40 percent of the students don't even remember having 
received that counseling. So you wonder how transitory that 
counseling really was.
    Since you're all borrowers, I was wondering whether you 
could share with us what you thought of your loan counseling. 
Do you feel like it provided you with all the information you 
needed to understand what you were getting into?
    Ms. Donelson, obviously, you had a financial counselor that 
really did, from your testimony.
    But how about the others? Did it give you the information 
you needed? Were there ways in which it could have been more 
helpful?
    Ms. Brooks, I see you're ready to answer that.
    Ms. Brooks. Thank you. Great question. Actually, in my 
freshman year in 2008, they do an introductory course at Bowie 
State University that prepares you for financial aid and gives 
you a lot of information. However, they did not include 
information--or that I can recall--information about there 
being a maximum limit on the loans, subsidized or unsubsidized.
    Had I known that, I would have taken the loans and spread 
them out more throughout my matriculation through college. 
Because I used them at such various times to pay for needs, I 
am at a situation now where I need to find more money to pay 
for just my last semester in order to graduate in December.
    The Chairman. Anybody else?
    Dr. Goldrick-Rab.
    Ms. Goldrick-Rab. I've been giving a lot of thought to this 
issue of the loan counseling. I can tell you that this 
experience is very common. It is very unusual for a college to 
offer what is apparently being offered at her university. A 
college course to help students understand financial aid is a 
great idea in theory. It's very difficult to get the 
institutions to do it. Some of them are trying it. At the 
University of Wisconsin-Milwaukee, for a subset of grant 
recipients, they are attempting a one-credit course in this 
regard.
    The Federal student aid folks are working hard on the issue 
of loan counseling, and I have been in touch with them. I have 
reviewed the proposed revisions to loan counseling, and some of 
them have begun to roll out. This is what I will say, and we're 
trying to do research on this right now. This is something that 
I've been actively trying to understand, what students really 
get from it.
    A lot of information is now being provided. It is text 
heavy, it is difficult to navigate, and it contains a lot of 
terms that, frankly, are above the levels of financial literacy 
of not only our undergraduates but, frankly, most Americans. It 
also takes an attitude toward many of our students that I have 
to say would be off-putting.
    For example, it tells students, ``Well, are you running out 
of money? Here's some strategies. Don't go out to eat.'' 
Research does not suggest or support the idea that most 
hardworking students are wasting their money on luxurious 
restaurant meals. It suggests that they are already taking 
these strategies. So, in other words, it doesn't offer them 
real alternatives when they are already understanding these 
sorts of things. It simply gives them an array of terms and 
program options. IBR is not well-explained in the current 
system. It is given with a set of acronyms and complex terms.
    The Chairman. Any other thoughts?
    Ms. Donelson.
    Ms. Donelson. Well, I did have a lot of counseling. My 
financial aid advisor--well, Tiffany, the director--sat down 
and explained to me, ``Now, you can only borrow this much for 
this year, so let's see what we can do and stretch this out.'' 
And if she said something to me like, ``Oh, you have to pay 
$300 to finish your books,'' I'm like, ``Cool. I'll take $300. 
I'm OK with that.''
    So she was able--I'm very thankful for Tiffany. She 
actually got with me a couple of days ago. We need to sit down 
so we can look at this. And the financial aid puts on a lot of 
events, so it was like, ``Financial aid will be in the student 
center. Come talk to us. We want to speak to you. Always come 
see us.'' And it's required the first week of your freshman 
year at Lipscomb that you see financial aid. You have a day 
assigned to financial aid, so you have to talk to them.
    If you go in and be oblivious to what's going on, it's 
actually, I feel, on the student. I was just determined that 
this is what I have to do, and this is what I'm going to take 
care of to get what I need. So I guess it's just different.
    The Chairman. Thank you all very much.
    Senator Alexander.
    Senator Alexander. Thanks, Mr. Chairman. This is very 
helpful, and I want to stay on topic, although I can't resist 
making a comment that would provoke a big discussion here, 
particularly from my Democratic friends.
    The primary reason for less State aid for public colleges 
and universities, which are attended by three out of four 
students, is Federal Medicaid mandates soaking up money that 
would otherwise go to public higher education. It's gone from 8 
percent in the 1980s to 26 percent today. It's never discussed 
at hearings like this in a serious way.
    I'm not talking about President Obama. I'm talking about 
what's happened over the last 30 years, as the Medicaid program 
was growing and States shoulder 40 percent of the bill. That's 
where the moneys come from, and that's why your tuition has 
gone up if you're at a public college or university. So that's 
our responsibility.
    The other part that's our responsibility are Federal grants 
and loans--I mean, regulations. Senator Harkin and Senator 
Franken have legislation, and I had some legislation when I 
first got here to try to simplify things. Maybe as we think 
about this, we could get rid of some of the rules which we now 
have about helping you understand what your loan would be and 
replace them with better rules so that we don't add to that.
    For example, as Senator Harkin was indicating, we already 
have required by law a college navigator, a student shopping 
sheet, a net price calculator, disclosure. All this was in the 
Higher Education Act. Each school is supposed to say what the 
loans and the responsibilities are of a student who is a 
borrower with a long list of what that entails. We require each 
school to provide counseling with a long list of what that 
entails.
    Schools are audited annually on these efforts. I wonder how 
that could be, with 6,000 colleges and universities and 12.5 
million students who have grants or loans. We have spent $68 
million on 15 different financial literacy programs. So, 
obviously, part of the big stack of regulations we have are 
things we've already, in a well intentioned way, tried to 
require.
    So let me go to you, Ms. Donelson, and ask you this. Of the 
things that made the most difference to you, it sounds like it 
started with your high school advisor and then your financial 
aid advisor at Lipscomb. Is that where you got the best 
information? Because you made a decision to go to a more 
expensive school. I mean, you could have gone to Middle 
Tennessee State University. The tuition there is $8,000 a year 
or so. At Lipscomb, it's twice that. Right?
    Ms. Donelson. Yes, sir.
    Senator Alexander. Or you could have started out with 2 
years at a community college and then gone to Lipscomb, and the 
Pell grant is about equal to the community college tuition. But 
you made a decision that the best way for you to get an 
accounting master's degree was to take a more expensive route. 
Of all these things that we hear about, what was the most 
helpful thing to you in making that decision?
    Ms. Donelson. As far as choosing Lipscomb instead of the--
--
    Senator Alexander. In deciding to run up--you've run up a 
debt----
    Ms. Donelson. Yes, sir.
    Senator Alexander [continuing]. That you didn't have to run 
up. You could have gone to some other school at a lower cost. 
But you're comfortable with that decision. Right?
    Ms. Donelson. Yes, sir. Actually, Tiffany Summers was--the 
whole financial aid family--they were very, very helpful. It's 
sad to say I stayed in the financial aid office more than a 
usual student would. They would see me and say, ``Hey, Derrica, 
what's going on today?'' So that's the sad thing about it. But 
she was very helpful with the decision. And my mom was very, 
very involved. Me and my mom worked together on how we were 
going to support the family and how we were going to make it.
    We asked ourselves, ``Can we do this? Can we work this 
out?'' And then Tiffany sits down and says, ``Well, this is 
what it is, and this is what it requires for you to do once you 
take this step.'' And so by working with my mother and Tiffany, 
I have been able to make a plan for myself that I think is 
obtainable, that is what I can do. I'm not trying to get ahead 
of myself, but I feel like I can do this.
    Senator Alexander. So you're comfortable with the higher 
debt you received because--even though it wouldn't have had to 
be that high if you had gone to a less expensive college.
    Ms. Donelson. Yes. I am comfortable with that, even though 
that sounds bad. But I am comfortable with that.
    Senator Alexander. No, no, it doesn't sound bad. It sounds 
like you spent a lot of time making an informed decision. And 
if you're that comfortable with it, you'll probably be a great 
success.
    Mr. Senack, you heard that list of all the things that the 
law requires colleges and universities to do. From the 
perspective of a student, what would be the one or two things--
if you were me or Senator Harkin or Senator Franken working on 
a new piece of legislation to try to improve this, is there 
anything you'd get rid of or improve or replace? The words were 
used, text heavy. That sounds like a lot of things around here. 
What advice would you have for us?
    Mr. Senack. Absolutely. I think the Department of Education 
has been seriously working to build financial literacy, and I 
think that's why they have such a variety of tools. What's out 
there right now is targeted at different constituencies. So 
things like the college navigator or the college score card are 
directed at students who are searching for a school and 
deciding where to go.
    Senator Alexander. In your experience, have those been 
helpful to students?
    Mr. Senack. Well, they weren't around when I was looking 
for a school. But I think in our constituencies across the 
country, it's definitely been beneficial to have the 
information out there. I definitely think that there are steps 
that can be taken to simplify and communicate the most 
important things in that information. In particular, I think 
the shopping sheet scores better than most other types of 
financial aid letter in terms of comprehension, so I think 
that's an important step. But I do think that communicating the 
information is absolutely critical to keeping debt down.
    Senator Alexander. Ms. Brooks, obviously, one piece of 
information that either wasn't taught or didn't get through was 
the loan limit. Have you thought about any suggestions you'd 
have for us as we think about what we already require, which is 
quite a bit, of colleges and universities and what actually 
might work as you're gathering information about grants and 
loans?
    Ms. Brooks. Thank you. I definitely think that you all have 
done an extremely great job so far. But for the future, I can't 
say that I have any definite suggestions. However, if it's on 
the lines of institutions making sure that they give the right 
information to the students--like they've said, text heavy 
information, things that I would not understand when I'm 
filling out financial aid questions, and if I had questions, 
who could I go to.
    If I'm researching online, and there's something that is 
unclear--not all institutions have these great financial aid 
offices or counselors that we can go to, unfortunately. So when 
researching these things online, make it clear what is to be 
expected of the student after graduating in terms of repayment 
and the maximum limits on these loans.
    Senator Alexander. Thank you, Ms. Brooks.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Alexander. On my list, I 
have Senators Baldwin, Murphy, Franken, Murray, and Whitehouse 
in that order. So I'll recognize Senator Baldwin.
    Senator Baldwin. Thank you, Mr. Chairman and Ranking Member 
Alexander, for holding this important hearing.
    I want to particularly thank Dr. Goldrick-Rab for your 
testimony, your familial story and bringing your grandfather 
here with us, and putting a lot of this debate in a historical 
context. I think sometimes that we've forgotten the role that 
access to higher education plays in giving meaning to the 
American dream, making it real, not just a dream, and building 
our middle class.
    I repeat often our President's words from the State of the 
Union--not this past one, but the one before--that to win the 
future, we must out-educate, out-innovate, and out-build the 
rest of the world. And we're losing ground on that. I've spent 
a lot of time in the last couple of years interacting with 
students at various settings across the State of Wisconsin, 
students in private universities and colleges, students at our 
public universities, at our technical and community colleges, 
and they're struggling mightily, as your story of Chloe 
reveals.
    I have just a couple of specific questions. I'll start with 
Dr. Goldrick-Rab, but anyone who has further insights, I would 
certainly appreciate hearing from you.
    I've been visiting a lot of technical colleges recently, 
and at some of them, they've seen a real change in the 
demographic of their student population with our recent deep 
recession. Many have been displaced in the recession from their 
manufacturing jobs. Others are looking for an opportunity to 
perhaps move ahead in a setting in which they're currently 
working. They're finding that our financial aid system, in many 
cases, is just unavailable to them if they are seeking a couple 
of semesters, a certificate rather than a full degree, and 
finding it so challenging to move out of, say, ``minimum wage 
employment'' to something that would be readily available in 
their immediate communities that could pay $15, $20, $25 an 
hour because of that gap.
    So I wonder if you can comment on those nontraditional 
students caught in between and how we can better serve them. 
I'll start with Dr. Goldrick-Rab, but anyone else who has 
comments, I would appreciate.
    Ms. Goldrick-Rab. Thank you for the question. I guess the 
first thing I want to say is that those so-called 
nontraditional students are actually the traditional students 
now.
    Senator Baldwin. Yes.
    Ms. Goldrick-Rab. It's a terrible term. They're the 
majority. Most students in this country don't look like these 
folks. These are extraordinary people, and I wish that the 
Nation was full of such extraordinary people making such 
extraordinary choices with extraordinarily supportive families 
and extraordinarily supportive college settings. But that isn't 
the case. That is not the common experience at all.
    The folks that you're talking about really are struggling. 
They're the ones who need a little bit more, just a few courses 
perhaps. They already have families. They've already been in 
the labor market, and they're coming back in to get a bit more. 
That is really the story of so many of them, and the aid system 
is not really well supportive of them.
    If they want to do this in a fashion that is online, for 
example, the UW flex degree that people are working toward 
creating right now in Wisconsin--it is not very well-aligned 
and supported by our current financial aid system. Asking these 
folks to take on the student loans--they look at this 
calculation a little bit differently. They already have debt in 
their families. They've been out of work.
    So asking them to take on more--and they don't have their 
whole lives in front of them to pay it off. This feels highly 
unrealistic to them. Many of them are really at the bottom, and 
the need calculation doesn't leave them with very much. So I 
think this is something to take a really close look at in the 
upcoming reauthorization and make sure that it is built for 
them.
    Senator Baldwin. With just a few seconds left, the other 
question I wanted to ask was about where the financial aid 
literacy should begin. We were talking about having a 
conversation earlier about courses as undergraduates. But it 
strikes me when we try to have young people see college as a 
path, we often don't have that financial aid conversation 
early.
    When should it begin? What programs should be funded that 
aren't right now? I think some are authorized and not fully 
supported.
    Ms. Goldrick-Rab. I would not make this a higher education 
project. This needs to be a project that begins, frankly--we're 
talking about early childhood a lot. They're perfectly capable. 
They're learning numbers. These lessons need to begin then. And 
the reason for that is that the college choices of many 
students are determined by the time that they're in eighth 
grade. If they don't understand that college is affordable by 
that point, then they do not take the courses that they need to 
get ready.
    That is the main reason that low-income students are not 
finishing their degrees. They were never ready in the first 
place with their courses. So, please, make that a part of the 
reforms that you are taking around K-12 education and those 
sorts of things rather than placing them at the other end of 
the educational pipeline.
    The Chairman. Thank you, Senator Baldwin.
    Senator Murphy.
    Senator Murphy. Thank you very much, Mr. Chairman.
    Last week, I was at an afterschool center in Danbury, CT, 
and I was talking with an amazing group of volunteers that were 
kids that were teaching boxing lessons and dance lessons. They 
were all high school graduates invested in their community. But 
none of them are going to college. There were about four or 
five of these kids.
    I said, ``Well, for how many of you is the reason that 
you're not going to college, money?'' They looked at me like I 
had horns on my head. They said, ``Well, of course, the only 
reason why we're not going to college is money. Of course, we 
would be there if we could afford it.'' Some of them couldn't 
afford it under any conditions. Several of them had to be 
working to support their families.
    I just thought, what an absolute tragedy that these kids, 
who are already committed to this community, who have shown 
that they're willing to go above and beyond the call to make 
our State a better place, aren't able to get a degree. Part of 
it was that they were scared off because they had heard stories 
of their friends and older brothers and sisters who had tried 
and come out with just these enormous amounts of debt and no 
way to repay them.
    I want to start with you, Mr. Senack, because one of the 
things we're going to be talking about--and you mentioned it in 
your testimony--is the rate at which students are going to be 
paying. It might not sound like a lot of money to some Senators 
and Members of Congress, that the difference between 3.4 
percent and 6.8 percent is going to be $1,000, or maybe on the 
high end $4,000, over the course of the loan.
    But the reality is for most kids graduating college these 
days is that they're not making enough money to pay the bills, 
never mind to pay back these loans. So can you just paint a 
little bit of a picture for us about the stakes of this debate 
over the rate that is being paid and what the reality is? 
You've recently graduated. All your friends are out in the 
workforce today. What's the picture today of the ability of a 
recent college graduate to be able to pick up an extra thousand 
dollars or an extra couple of thousand dollars in loan 
repayments just based on the difference in interest rates?
    Mr. Senack. Sure. Thank you for the question. I think it's 
important to recognize, first off, that subsidized loans, which 
the rate is set to double on, are targeted at the most needy 
students. We're not just talking about the people who are able 
to make their 10-year repayment plans. We're talking about the 
students who needed more money to go to school than what's out 
there in grant aid.
    You know, $1,000 is a significant amount of money. If you 
were taking out four loans, one for every year of school, that 
puts your debt over $30,000 if you're already at the average. 
There's 7 million students across the country who have 
subsidized loans. There are 10 million who have unsubsidized 
loans. Beyond that, there are millions and millions more who 
have PLUS loans or Perkins loans.
    So there's a significant amount of the college population 
that's relying on these direct loans to stay in school. When 
the students are looking at going back to school next year, 
$1,000 is a significant amount of money. And it's unfortunate 
that that will turn heads and will change minds about being 
able to afford to continue to stay at a school of higher 
education.
    Senator Murphy. Clearly, one of the things here is what we 
can do to try to make the package that we give students more 
generous. But part of our discussion is how we can make college 
cheaper. How do we get you through 4 years at lower costs?
    Ms. Brooks, I wanted to ask you about online courses, 
because you said you've been taking online courses during the 
day and doing classes in person at night.
    And, Dr. Goldrick-Rab, you referenced that your university 
is moving more toward some online education.
    Ms. Brooks, can you talk about your experience in taking 
online courses? You're taking both, so you're a perfect person 
to talk about the kind of education you think you're getting 
online, which, ultimately, we think, can be cheaper than what 
you get in person. How does it compare to your classes that you 
take at the university?
    Ms. Brooks. Thank you. And, first, I'd like to say that I 
appreciate taking hybrid courses, both online and evening 
classes. It offers me the flexibility to be able to work and, 
on breaks, enter my classroom setting online and be able to 
catch up on work that I may have missed if I had to miss a 
class because of a doctor's appointment for my son or a day at 
work that I couldn't miss for a class. And evening courses, as 
well, I appreciate for offering the accommodation I need to 
both be able to work and attend school at the same time.
    Above all, though, I appreciate online courses. I think 
that they are great. I receive the same amount of information I 
would as an in-person class. If it is cheaper for me to take 
online courses, I would much rather do that. And if I had a 
schedule where I could take all online courses, I definitely 
would. I appreciate them much. Thank you.
    Senator Murphy. Well, thank you very much. I think a big 
part of our discussion has got to be how we deliver a skill set 
for less money and perhaps less time.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Murphy.
    Senator Murray.

                      Statement of Senator Murray

    Senator Murray. Thank you very much, Mr. Chairman. I really 
appreciate you having this hearing. I think it's one of the 
most compelling issues that we need to address for the future 
of our country. If we are hearing, as Senator Murphy said, from 
young kids who have already decided they are not going to 
college because of costs, that's the future of our country. So 
this is just such an important issue, and I really appreciate 
this.
    You've talked about a number of the issues I was going to 
ask about. I was very happy to hear you, Dr. Goldrick-Rab, talk 
about what we call traditional students becoming no longer 
traditional students, because if you go on campuses--and Ms. 
Brooks is a perfect example of who you might look at and say is 
traditional, but very nontraditional, trying to raise a family 
and do all the work and everything at the same time.
    Most people think a traditional student goes to school in 
the morning, goes home at night, does their studies, and goes 
back the next day. And, in fact, most of our students today 
have jobs, they are raising families, and some of them are in 
the workforce.
    I wanted to ask what programs or initiatives are most 
helpful to you, Ms. Brooks, in balancing your family and your 
work and your classes.
    Ms. Brooks. I would definitely say, again, the online 
courses and offering evening courses are definitely a big help. 
I am flexible in maintaining the schedule that I do have, 
working 40 hours per week. Every morning, I work, and being 
able to have these classes at night and online is a big help. 
If I did not have that, I would not be able to take as many 
courses and graduate on time. And would that affect how much 
money that I would have to put out to go to school? Those are 
questions that I ask myself if those weren't offered to me. So 
I appreciate those programs.
    Senator Murray. Does anybody else have any ideas about how 
we address that?
    Ms. Donelson.
    Ms. Donelson. I actually intern at Regional Care Hospital 
Partners. That allows me to work up to 40 hours a week. But the 
MAcc program is set up for you to be able to work a full-time 
job and go to class at night. So I usually have a class for 4 
hours, even though that sounds very nerve wracking. But it 
actually is very helpful that I can get this.
    They have them in terms. I have an 8-week class, and every 
8 weeks, I'm switching to a different set of classes, and that 
has helped me to be able to go through this MAcc program in an 
accelerated form and to get my degree in 5 years.
    Senator Murray. So the college is being more flexible in 
terms of this isn't a 4-year program, where you start and 4 
years later you finish. But rather, looking at you as a student 
and getting you out with skills.
    Ms. Donelson. Yes, ma'am.
    Senator Murray. Dr. Goldrick-Rab.
    Ms. Goldrick-Rab. I'd like to add to this discussion, 
however, that research is very clear, and there's some new 
research out of the Community College Research Center that 
indicates that while the blended version, which you are 
receiving at the moment, where you have some online and some 
in-person, does well by students. The achievement gap grows 
when we push students to only have online courses.
    In addition, I want to note that when students work full-
time--again, I think these are exceptional folks who are 
managing to work long, long hours and do well in school. What 
typically happens is that the lowest income students work those 
long hours, but these are the same folks who have the least 
academic preparation, and this time working competes with their 
time for studying and academic advising.
    This is why we find so many of them end up with debt and no 
degree, and those are the folks----
    Senator Murray. So how do we address that? What is the best 
way to address that?
    Ms. Goldrick-Rab. I think, first of all, the best way to 
address that is to reduce the cost of going to college so that 
it doesn't require one to work such long hours and to borrow. 
If one works 40 hours a week during college and has grant aid, 
there's a question about why there should still be cost left 
over for loans. So in the meantime----
    Senator Murray. So what is the best way to address the 
affordability issue? Because what we're doing here is trying to 
create all kinds of ways to pay more or put more money into the 
system so that students can succeed. Let's ask the question: 
How do we decrease the cost of college itself?
    Ms. Goldrick-Rab. How do we decrease the cost of college 
itself? There are many ways in which to do that. It's actually 
very interesting to me--Senator Alexander, you're very 
concerned about the regulations, and I agree with you. There 
are a lot of regulations, and, in fact, I do think that they 
are contributing somewhat to college cost. And they are also 
interfering with the autonomy of colleges and universities, 
something that they're very concerned about.
    It seems to me that we have so many regulations precisely 
because we have created such a complicated system, and we have 
so many score sheets and all of these sorts of things and so 
much high need for financial literacy because we've created so 
much of a complicated system. So there's an incredible need to 
simplify this for the schools. And to simplify this means to go 
back to revisit where we were when these programs started out. 
We didn't have this plethora of things involved.
    If you remove the number of Federal programs, if you reduce 
the number of those things, and you take out of the equation 
the availability of these student loans to these institutions, 
they will have to adjust. They will adjust. If families do 
not----
    Senator Murray. What regulations and programs, or whatever 
you want to call them, would you take away or consolidate?
    Ms. Goldrick-Rab. Right. I would reduce the availability of 
student loans. I would insist that the States maintain their 
effort and put their money into appropriations. I would 
redirect----
    Senator Murray. Because you think if they didn't have all 
these students on student loans, they would have to look at 
their own institutions?
    Ms. Goldrick-Rab. Yes, they would have to look at their own 
bottom lines. The fact is that they do adjust accordingly when 
they know that these students come with additional dollars. 
There is growing empirical evidence of this, particularly in 
the for-profit sector and in the private colleges and 
universities.
    And the fact is that one of the reasons that public 
colleges and universities continue to increase their cost is 
because they're in a race, an arms race, with those private 
institutions who have defined quality as expensive. And the 
American public has bought an argument that equates price with 
quality. It isn't true. We do not need to be building the 
luxurious settings which these colleges and universities, 
including now on public campuses, are building only to keep up 
with their peers. We need to have teaching and learning 
environments that are focused on education and, frankly, 
nothing more.
    Senator Murray. My time is up.
    The Chairman. Senator Whitehouse.

                    Statement of Senator Whitehouse

    Senator Whitehouse. Thank you, Chairman.
    Clearly, one factor in all of this is the Pell grant. I'm 
from Rhode Island, and we're very proud of Senator Pell and his 
contribution to the creation of the Pell grants, i.e., they 
were his idea. Shortly after they were launched, they were 
contributing, on average, about 72 percent of the cost of 
college then. Now, that's down to 32 percent, even after the 
increases that we added in recent years. So it used to be more 
than two-thirds. Now it's less than one-third.
    I'd like to ask, particularly, the students on the panel, 
do you receive Pell grants? Do they make a big difference? And 
what percentage of your financial obligation do you think they 
meet, roughly? You don't have to give me 31.7 percent. But how 
important is it, and how big a piece is it?
    Ms. Brooks. Thank you. I do receive the Federal Pell grant, 
and I would say that it covers 90 to 95 percent of my tuition. 
And I need that, of course, but without that coverage, I would 
be left with approximately $6,000 worth of tuition at Bowie 
State University. So with the coverage of the 95 percent, I'm 
only required to work the 40 hours to pay the difference.
    However, if I didn't have the Pell grant, then I would be 
left with this hefty bill, and then left with how can I afford 
to pay for all these classes, and then I would reduce the 
number of classes that I take. I'm now taking five classes per 
semester. To go from a full-time student to a part-time 
student, I then wouldn't be eligible to receive some financial 
aid because I'm a part-time student. So that plays a big role 
as well.
    Senator Whitehouse. Thank you.
    Ms. Donelson.
    Ms. Donelson. I do receive the Pell grant, and I'm looking 
at the layout of my financial aid now. The way that my 
financial aid advisor has helped me--she has broken down for me 
each semester that I have used it, and it shows that it has put 
a significant dent in the--basically a dent in taking care of 
the cost for that semester.
    I really can't give you a percentage, but I'm just looking 
at the numbers.
    Senator Whitehouse. But it helps.
    Ms. Donelson. Yes, sir.
    Senator Whitehouse. The other issue that I think we need to 
address is the combined problem of the for-profit sector in 
certain areas moving out into selling what one might even 
consider to be bogus education. We've got wonderful for-profits 
in Rhode Island. Clearly, there are some terrific examples of 
for-profit education.
    But when there's all this money floating around, there are 
people who come in, and we've heard these tales of some tiny 
little college someplace getting bought by a hedge fund. It's 
got the right kind of license. Suddenly, it explodes. You've 
got 20,000. The degrees don't actually connect to the real 
world in any way that gets you your license or your 
certificate.
    And the tough thing about it is that you're only young 
once, and, worse than that, whatever you borrow isn't 
dischargeable in bankruptcy. It's one of the very, very few 
kinds of loans that you can't reboot on if things haven't 
worked out for you. So you end up with people who have lost the 
learning years of their lives, and they've got a debt they 
can't shed. So it's hard to go back and make it right.
    And where the education you got was essentially bogus and 
isn't useful, and you got conned by an outfit that had 300 or 
400 recruiters and one person doing job placement, because that 
was where their interest was--bring you in, get your money, and 
see you later--the damage that happens in people's lives, I 
think, is very, very severe. To this day, I don't think anybody 
knows who snuck the non-dischargeable provision into the so-
called Bankruptcy Reform Act, but it sure slipped in. Some 
lobbyist, some wheeler-dealer got it in there, and I think we 
do what we can to get it out.
    I don't know if anybody has any experience with people who 
have had that situation where the degree wasn't what it was 
cracked up to be and they lost both the time and the money and 
were unable to start over and carried that burden for the rest 
of their lives.
    Mr. Senack, do you want to speak to that?
    Mr. Senack. Sure. I think the reality is that budgets 
everywhere are shrinking. So it's critical that where we're 
investing our dollars are places that will actually be granting 
degrees and generating real results for students.
    I appreciate all the efforts that the government has taken 
to make sure financial aid dollars aren't used for recruiting 
or advertising or things like that, because it is just so 
critical with the pie being so small right now that we're 
getting the best bang for our buck. And that means targeting 
this aid to schools that will actually grant degrees and get 
students out into the workforce.
    Senator Whitehouse. Thank you very much.
    The Chairman. Thank you, Senator Whitehouse.
    Senator Franken.

                      Statement of Senator Franken

    Senator Franken. Thank you, Mr. Chairman and Senator 
Alexander, for this hearing.
    You three students here today are extraordinary young 
people. I've done lots and lots of roundtables around 
Minnesota, and it seems like when we get students in, they are 
all extraordinary. Sometimes, I think that it fools us, that 
you guys figure out how to do it. You've worked incredibly 
hard.
    When I talk to student leaders from the MNSCU system in 
Minnesota, the Minnesota State Colleges and Universities, they 
come in, and I say, ``How many of you work 20 hours a week?'' 
They all do. ``How many work 30 hours a week?'' Most of them. 
``How many work 40 hours?'' A lot of them. It's pretty 
extraordinary stuff, the ones that are successful, like you 
are. It's just that I worry about some kids who aren't so 
extraordinary as you are.
    Mr. Senack, thank you for bringing up the understanding of 
the true cost of college. I agree with Senator Alexander, the 
Ranking Member, that making things simpler is a good idea.
    And, Dr. Goldrick-Rab, you talked about these financial 
letters, these aid letters, these award letters. I think you 
pointed out that sometimes an award letter will have a loan in 
it and it won't say it's a loan.
    Mr. Senack, you mentioned that in your testimony. So the 
whole idea of this is just to require everybody to use the same 
form, the same letters, the same terms. And when I introduced 
this--I'm going to reintroduce it, and it's bipartisan. When I 
introduced this, I had college counselors get in touch with me, 
saying, ``Thank you. I can't figure these things out, let alone 
the parents and the students.''
    So can you talk to me, Mr. Senack, or anybody, about the 
value of that type of legislation, the uniform form, that 
everyone uses the same terms, et cetera?
    Mr. Senack. Sure. Thank you. One of the big issues with 
financial aid packages is that there is no consistent system. 
In some cases, schools will calculate their total cost 
differently. Some just use tuition plus room and board. Others 
include transportation, parking, textbooks. And it really makes 
it difficult to actually look at a side-by-side comparison of 
two different schools.
    Beyond that, I mentioned that students often feel misled in 
terms of the awards that they're given. PLUS loans are used 
often to just cover the remainder of the cost, to give students 
a low net cost, but actually end up saddling them with tens of 
thousands of dollars in debt down the road.
    I made the choice to go to the University of Connecticut 
because it was a more affordable option. I was able to tell 
that because I was able to make a side-by-side comparison 
between that and other schools. But the majority of students 
aren't able to do that. So it's critical that we make a system 
that is easily understandable. More than 600 colleges and 
institutions have signed on to use the shopping sheet. But we 
do need to take more steps to increase its use.
    Senator Franken. So you can compare apples to apples, 
oranges to oranges.
    Mr. Senack. Absolutely.
    Senator Franken. I know, Ms. Donelson, you took either AP 
or IB in high school?
    Ms. Donelson. Thank you. Yes, sir. I did. I took AP 
psychology, anatomy, government, and economics.
    Senator Franken. Great. Of course, you would have.
    [Laughter.]
    I, again, have done just recently some roundtables at the 
St. Paul College in Minnesota, Winona State University. And one 
of the things that students talked about was how you can get 
college credits, and that saves you a lot. There are actually 
some students who have gotten 2 years of college credits in 
high school. Now, boy, that cuts down the cost of college.
    And you took AP, and also there are International 
Baccalaureates. We also, in Minnesota, have something called 
PSEO, which is postsecondary enrollment options or 
postsecondary education in the school. These do allow you to 
get credits.
    One of the things I want to do is just be able to help kids 
who can't afford the tests, the IB test and the AP test. Some 
States do it. Some States don't. But tell me about that in 
terms of what the risk is, because you take an AP course, and 
you're essentially and hopefully buying and getting a credit 
that will offset some of your college costs. Right? But if you 
don't get the 3 on the AP test, then--how much do these cost? 
Do they cost about $85----
    Ms. Donelson. Per test, yes.
    Senator Franken [continuing]. For the IB and about $100 and 
some for the AP in high school?
    Ms. Donelson. Yes, sir. I don't quite recall what the exact 
cost was when I was in high school. But the risk for me was----
    Senator Franken. Years ago when you were in high school.
    [Laughter.]
    Ms. Donelson. But the risk for me was, like you said, I 
could take the test, but it isn't guaranteed that I make the 
score for it to go for college credit. I actually got my 
psychology class for college credit, and I missed the 
government and the economics by one point. So I spent all this 
time going through school and taking the tests.
    But, actually, it did take a lot of--but the Advanced 
Placement was required at MLK. But Advanced Placement was a 
hard class for me. I guess I was just more interested in 
psychology at the time, and that made me be able to excel 
better in that test. But the risk for me was actually taking 
tests and not getting the score.
    Senator Franken. One student I talked to who was from the 
University of Minnesota and a third year senior--he had gotten 
enough credits to be a third year senior. He got enough credits 
in high school. But he said that if it hadn't been for the 
State program, he would not have taken the IB and the AP 
courses because he couldn't afford them. So there are some kids 
that can and some kids that can't, and I'd like to make sure 
that they're able to do that.
    I'm way over my time. I want to thank both the Ranking 
Member and the Chairman for this hearing. This is such an 
important topic. I admire you tremendously. It was a lot easier 
for us when we were going to school.
    The Chairman. Thank you. We'll begin a second round.
    Whenever I can, I always like to point out that no State 
has to accept Federal Medicaid money, no State. You always hear 
that it's like the Federal Government is coming down on the 
States and saying, ``You've got to do this. It's a mandate.'' 
It's not a mandate. If a State wants to accept Federal Medicaid 
money, then, yes, they have to meet certain requirements. 
That's it.
    But if you don't want to accept that money, you don't have 
to. So any State legislature could tomorrow, if they want to, 
vote and say, ``Hey, we don't want to accept any of that 
Federal Medicaid money,'' and they can take all their State 
Medicaid money and put it into education or something else. So 
there's no Federal mandate.
    Now, if there's been an increase--and there has been a 
terrible, huge increase in Medicaid costs, it's because we've 
got more poor people. You can't get Medicaid unless you're 
poor. You reduce unemployment from--actually, it's really 
around 13 percent now rather than 7 percent. If you reduce 
unemployment down to 4 percent or 5 percent, guess what? You 
save a lot of money on Medicaid. So it's because we have more 
poor people.
    Some States have no income taxes. Well, that's their right. 
They don't have to if they don't want to. But then they can't 
come crying to the Federal Government and say, ``Put more money 
into education by getting more students into debt.''
    State budgets have been cut. States are now in a race to 
the bottom to see who can have the least amount of taxes to 
attract a business or something. So they have this race to the 
bottom--we'll cut taxes more than that State will cut taxes--
and as a consequence, education suffers. So these are just my 
thoughts on that.
    Dr. Goldrick-Rab, you just skewered a very sacred cow. I 
call it edifices. So many colleges now get in this race to 
build a new building and name it after somebody, don't you 
know? And it's fancy, and when you look at the brochures from 
some of these colleges, it's all about all these fancy new 
buildings, the swimming pools, and all these sports arenas, and 
all that kind of stuff.
    You look in vain, Mr. Senack. You look in vain in those 
brochures to discover what kind of student support services 
they have for poor kids. What do they do to make sure students 
get through in 4 years?
    I might just mention on the bankruptcy situation that was 
brought up here that we had a bill in 2005. It was called the 
bankruptcy bill, revised bankruptcy laws and stuff. That was 
put in there, in that bill, that student loans were not 
dischargeable in bankruptcy except under very dire 
circumstances. That was one of the reasons I never supported 
it. There were other reasons, but that was one that was put in 
there. I don't know why, but it just was. You can discharge 
everything else in bankruptcy, but you can't discharge that. I 
thought that was very interesting.
    Now, last, I want to get this--and I'm going to talk to Dr. 
Goldrick-Rab about this, but you can also chime in, any of you. 
We've seen a big move away from need-based aid to merit-based 
aid. Now, that sounds very nice. We're all for merit. But what 
it means is a lot of those people that have the merit also come 
from that upper quartile of income. So now the aid has shifted 
to that rather than students who are smart, who can go to 
college, but who come from poor families, but who have the 
need.
    So I wonder if you could comment on what you see about 
that, Dr. Goldrick-Rab. We've heard repeatedly how important 
need-based aid is for low-income students, that merit-based aid 
does not promote college attendance. What are the obstacles we 
face in restoring need-based aid as a priority?
    Ms. Goldrick-Rab. Thank you for the question, Senator, 
because it's a really important issue. In fact, you're correct. 
We are now over-awarding, essentially, students who have no 
financial need. We are supplying them with what I would call 
financial incentives--that's what I would call merit-based 
aid--to choose a particular institution. And we've provided the 
ability to do this to these institutions by covering some of 
the cost for the needy students with our own aid.
    Often, what we see happening, particularly at private 
colleges, is that they will essentially use the need-based aid 
for the needy students and then reserve their own institutional 
aid, their own endowments, to put toward these merit awards. 
Now, what we see is that these merit awards, while they do 
relieve those families of having to spend on college, do not 
alter the choices that those families or students make in 
whether they go to college, whether they finish college, et 
cetera.
    In Georgia, for example--this is a well-researched State 
where they have a big HOPE program. That's a famous merit-based 
program. The introduction of that program to the State did not 
cause increases in college attainment in the State as much as 
it benefited the car industry, because the families who had 
saved for college and already were able to afford it kept that 
merit scholarship money and spent it to buy cars for their 
children. That is not a good use of policy dollars.
    The other thing it does is it creates a constituency of 
students on campus who are disproportionately wealthy. And as 
you were saying earlier about the edifices at the campuses, it 
is not the case that buildings or amenities are driving up 
college costs. That's not the main driver.
    But what is going on is that the colleges are orienting 
their experiences toward these wealthier students. They are 
catering to their needs, and they are responding to their 
requests for an experience that essentially prices out the 
working class student. It makes it very uncomfortable for them 
to be on the campus because they cannot fully participate in 
college life.
    This is the essential effect of the merit-based 
scholarships, where the students who are already wealthy now 
have even more resources to spend on things that they would 
like to have during college, while the other students are left 
with additional needs. You put these students together on a 
college campus, and you create a culture of haves and have-nots 
that eventually will drive those have-nots to think this isn't 
tenable anymore, and those are the ones who drop out.
    The Chairman. I'm over my time, but I want to followup on 
that. But, first, I'll recognize Senator Alexander.
    Senator Alexander. Go ahead, Mr. Chairman.
    The Chairman. Thank you.
    I have a problem with that. When I went to college, I was a 
have-not. My dad had a sixth grade education. He was already 
over 65 and on a meager $65 or $70 a month social security. We 
had no money. We had nothing.
    Fortunately, I had a scholarship. I had a Navy ROTC 
scholarship that paid my tuition and books. I got a $50 check 
every month to cover expenses. But I didn't have any other 
money. We had to go on cruises every summer, but I had to work. 
I'm not saying that I did all this--but I worked on Christmas 
break, and I worked on Easter break, and all that kind of 
stuff.
    But we always knew that even at Iowa State University, 
there were haves and have-nots. There were a lot of kids who 
had a lot more money than I did. They came from wealthier 
families. They had nice cars, sports cars, and went on spring 
break to Florida and all that kind of stuff. We couldn't do 
that.
    That didn't bother me. It didn't bother me, because I just 
recognized where I came from, and I didn't have that much. OK, 
fine. But I was going to go to college and maybe I'd be there 
sometime. Maybe I would make that.
    So I don't know that I buy it that kids that are have-nots 
see this and it discourages them. I'm not certain about that. I 
think at the most would be to make sure that kids who are from 
have-not families have the wherewithal to go to college without 
having huge debts piled on their head, that have the support 
services. Many students who come from disadvantaged families 
who don't have a lot of family support--to make sure they get 
that kind of support when they go through college.
    But I'm not certain about that idea that they get 
discouraged.
    Ms. Goldrick-Rab. Let me tell you what the difference is. 
I've heard a lot about folks like yourself who attended college 
at that time. And the experience that you had was partly 
because, at the time, the colleges and universities were not so 
much catering or gearing the way in which they offered 
opportunities to those other students. It was more accessible 
to all.
    What research indicates--and there's a new book out that 
you could look at that's based at one State university. It's 
called Paying for the Party. It's a brand new book out of 
Harvard University Press. And what they document is that 
colleges have oriented the way in which they provide services 
to those other students so that less is available to you.
    You raised earlier this question, for example, of student 
services. We can't even look at the budget for student services 
and know what fraction of those services are essentially 
provided to facilitate the social life of students, right, 
versus the needs of students, for example, through emergency 
counseling, those sorts of things. The budget is not 
sufficiently transparent for us to be able to see that.
    So what we're finding is that it's not just the case that 
students are individually in these situations running into 
conflict with each other, but that it is, in fact, partially 
the response of the institutions and the failure of those 
institutions to make it possible for everyone to have access to 
the things that people want to participate in. So the culture 
on these campuses has changed, and this has changed even at big 
State universities.
    Let me give you just one example: the range of housing 
options on a given campus. If you go to the University of 
Wisconsin at Madison where I teach, the range of on-campus 
housing options, the range, is a $7,000 difference. At one 
residence hall, it is $7,000 a year more expensive than at 
another. This causes the segregation of students by family 
income on a given campus.
    At other institutions that take more responsibility for 
this, for example, the University of Wisconsin at Green Bay, 
the difference is only a couple of hundred dollars, which means 
that students from different backgrounds can live together.
    The Chairman. Well, that's the way it was----
    Ms. Goldrick-Rab. That is wonderful and diverse, and that 
is exactly what you want to have for an educational 
environment. You don't want family income to determine the type 
of college experience that one can have, because then it is 
also determining the chances of graduating. These are major 
changes from the time when you went to college.
    The Chairman. I guess you're right. When I went to Iowa 
State--you're right. Friley Hall, the girls' dorms--that was 
the day when girls lived one place and guys lived in another. 
It was a mixture of everyone. That's true. I never thought 
about that. There wasn't very much of a range at all. The 
married students, mostly GIs, lived in Quonset huts. But that's 
interesting. I never thought about that.
    Senator Alexander.
    Senator Alexander. Thanks, Mr. Chairman.
    Ms. Donelson, did you have a HOPE scholarship?
    Ms. Donelson. Thank you. Yes, sir. I did.
    Senator Alexander. How much was that per year?
    Ms. Donelson. Per year, it's $5,500.
    Senator Alexander. Did you know about that when you were in 
high school?
    Ms. Donelson. Yes, sir.
    Senator Alexander. Was that a contributor to your working 
hard so that you might be able to maintain a grade average to 
earn it?
    Ms. Donelson. Yes, sir.
    Senator Alexander. If you didn't have the HOPE scholarship, 
could you have gone to David Lipscomb?
    Ms. Donelson. Honestly, I probably would not have been able 
to go to Lipscomb. But I did--like I said, I was very close to 
my guidance counselor, and she aimed at--``Derrica, you need to 
make sure you have a high score. You need to make sure you keep 
these grades so you can qualify for it.''
    Senator Alexander. What grades did you have to have in 
order to earn the HOPE scholarship?
    Ms. Donelson. They based mine off of my ACT score, which at 
that time was 21 and above. I don't remember if they--I don't 
know if they changed it or not. And I maintained a grade point 
average over a 3.0. I would really say I maintained at least a 
3.2 or above at Lipscomb.
    Senator Alexander. I have a little different view than the 
chairman. Most of our Federal aid is based upon need. I mean, I 
like our system of Federal higher education support. Half our 
students have a grant or loan to help pay for college. The 
amount of the Pell grant, as Ms. Brooks pointed out--not quite 
in her case, but the amount of the Pell grant average, $3,600, 
is $500 more than the average cost of attending a community 
college.
    So you can take a Pell grant and you can go to college if 
those averages are about right, because, typically, you would--
of course, you have your living expenses. But in community 
colleges, typically, you don't have dormitories. Do you have 
dormitories at Bowie State?
    Ms. Brooks. Yes.
    Senator Alexander. You do. Most of ours in Tennessee do 
not. And so I like the system, and I think infusing incentives 
and rewards and merit within a system of higher education is 
just fine. If we have 6,000 institutions of higher education of 
all types in America, they're going to have many different 
types of programs.
    I mean, I had merit scholarships all the way through, 
although I came from a family without much money, even into law 
school. And the idea of going--I went to NYU as well, which is 
the graduate--the law school, and what they were trying to do 
was achieve a diversity at NYU law school. They wanted some 
hillbillies at the law school instead of people from the Bronx.
    They had all these bright kids from New York City, and they 
were trying to achieve some diversity in the law school at the 
time. So that was their independent autonomous goal, and they 
had a merit scholarship, and I took advantage of it.
    Mr. Chairman, there's one thing that has come up here that 
has come up at other hearings--Dr. Goldrick-Rab mentioned it--
and that's simplicity. I love the phrase, text-heavy. I'm going 
to remember that, because so much of what we read is text-heavy 
around here. And having been the Secretary of Education, what 
really tends to happen is that well-meaning regulations just 
pile up. That happens in every department. But that's something 
that we may be able to agree on here.
    We might not agree on Medicaid. My view of that is that 
every State participates in the Medicaid program, and once you 
participate in it, you're stuck if you're a Governor. But we'll 
debate that some other time.
    Something we might be able to work on--and you and I have 
talked about it. We've got this informal alliance of Mikulski 
and Bennet, Democrats, and Burr and me, who are interested in 
this--as we move into the Higher Education reauthorization, 
maybe we could think about, for example, in this area of 
simplifying student forms, financial regulations, really 
finding out what the existing regulations are.
    Now, sometimes our colleagues come up with ideas that say, 
``Well, if you add one, you've got to get rid of one.'' I don't 
really like that so much because that's too wooden in its 
approach. But I do think it's useful if we're going to approach 
the whole area of financial aid for higher education, and it 
might be a good idea to ask the staff to just bring us all the 
regulations that exist and let's get some advice from students 
and faculty members and say, ``Does this make any sense?''
    We might have broad agreement on that here. I mean, Senator 
Warren and I have used this example before. This is a committee 
where we go from the right to the left probably in more of a 
spectrum than any other committee in the Senate. But when she 
was in the Consumer Bureau, she had a competition for a 1-page 
mortgage application. I think that's a really smart idea. 
Anybody who has refinanced their home over the last year or two 
knows how much nonsense is in several pages. You can't tell 
anything about it. You just sign the bottom line as the lender 
loans it to you, and you're not really protected.
    So what I'm suggesting is maybe we can find a way over a 
period of time to focus on regulations that cost money, that 
take time, that don't really protect the students they're 
intended to protect. And if they save money, that money could 
be put toward keeping tuition from going up quite so rapidly or 
raising faculty salaries or whatever it needed to do. And I'm 
certainly willing to spend time on that so that when we 
reauthorize the next higher education bill, we don't add to the 
stack of regulations. Perhaps we could reduce the stack of 
regulations and do so by writing what we mean to say in 
language that isn't text heavy.
    That's just a suggestion I make to the chairman, and I 
appreciate the conversations we've had on that before. I thank 
the witnesses for their very helpful testimony today.
    The Chairman. I also want to join in thanking you all.
    One last thing I just wanted to say, Senator Alexander, is 
that we talked about financial literacy. We're working on an 
Elementary and Secondary Education Act. For what it's worth, I 
just think that if you wait until you get to college to imbue 
kids with financial literacy, it's too late.
    So we're working on changing from the No Child Left Behind 
constrictions to more of what we call college- and career-ready 
regime. So what do you need to be college- and career-ready 
when you get out of secondary schools and back that down to 
what do you need to know in 12th, 11th, 10th, middle school, 
and elementary school.
    It seems to me that one of the things you need to have to 
be ready for college or career is financial literacy. So, 
hopefully, somehow we've got to put that in an ESEA bill--so 
that's part of a regime that kids will be expected to know if 
they're going to be college- and career-ready, they have to 
know how to balance the checkbook, what compound interest is, 
how debt accumulates, and how interest rates also accumulate, 
and what it means when you pay the minimum amount on your 
credit card bill and what that means in terms of debt 
accumulation--just simple kinds of things like that. It seems 
to me that needs to be a part of our Elementary and Secondary 
Education Act bill.
    Any of you who are listening to us up here--do you have any 
further thoughts or suggestions or comments before I gavel it 
to a close?
    If not, again, I thank you all very much. I thought it was 
a very good discussion. And, believe me, this is something that 
Senator Alexander and I think all members of this committee 
take very seriously, which is how we're going to do a higher 
education bill next year--simplification, looking at need-based 
programs, debt loads of students. This is all something we have 
to address in that Higher Education Act bill next year. You've 
been very helpful in prodding our thinking on it. So thank you 
very much.
    The committee will stand adjourned. We'll leave the record 
open for 10 days, until April 30th, for any other statements or 
comments or questions. The hearing will be adjourned. Thank you 
all very much.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

      Response to Question of Senator Bennet by Sara Goldrick-Rab 
                           and Vivica Brooks
                           sara goldrick-rab
    Question. What kind of information is most useful to students when 
making decisions about whether to attend a particular school? I have 
received letters from students that feel they did not have the 
information they needed when they made the decision to attend certain 
programs. Do you have examples of States, institutions or particular 
programs that have successfully given students the range of information 
they need to make informed decisions about their education?
    Answer. Unfortunately, there is little research evidence on 
effective practices in this area--whether to attend a particular 
school. Most efforts are aimed at helping students decide to apply to 
college at all, how to finance it, and sometimes where to apply. Fewer 
programs focus on the choice to attend a given school, after applying 
and being accepted. In addition, while there are many programs that 
provide information to prospective college students, very few have been 
evaluated for evidence of ``success.'' Given those caveats, here is 
some evidence that might be useful:

    1. Concern about the match between a student's academic 
qualifications and his/her college choice is rising due to recent 
evidence from several studies indicating that sizable fractions of 
high-achieving low-income students aren't applying to or attending 
selective colleges and universities.\1\ The most promising evidence for 
a program aimed at improving college match comes from the Expanding 
College Opportunities Comprehensive Intervention developed by Caroline 
Hoxby and Sarah Turner as part of an IES-funded experimental study.\2\ 
The ECO is low-cost and administered through mailing a packet of 
information including application strategies, fee waivers, information 
about net costs and graduation rates, and a personalized letter of 
introduction. The results indicate that this causes students to apply 
to and enroll in colleges and universities with higher graduation 
rates, greater instructional resources, and curriculum that is more 
geared toward students with very strong preparation like their own. The 
College Board is currently working to implement this approach 
nationwide.
---------------------------------------------------------------------------
    \1\ See in particular: Bowen, William G., Matthew M. Chingos, and 
Michael S. McPherson. 2009. Crossing the Finish Line: Completing 
College at America's Public Universities. Princeton, NJ: Princeton 
University Press; Hoxby, Caroline and Avery, Christopher. 2013. ``The 
Missing `One-Offs': The Hidden Supply of High-Achieving, Low Income 
Students.'' Brookings Institution, Washington, DC; Roderick, Melissa, 
Jenny Nagaoka, Vanessa Coca, and Eliza Moeller. 2008. From High School 
to the Future: Potholes on the Road to College. Chicago: Consortium on 
Chicago School Research.
    \2\ Hoxby, Caroline and Sarah Turner. 2013. Expanding College 
Opportunities for High-Achieving, Low Income Students. Stanford 
University. http://siepr.stanford.edu/?q=/system/files/shared/pubs/
papers/12-014paper.pdf.
---------------------------------------------------------------------------
    2. Another approach to providing information to high-achieving, 
low-income students involves college coaching. In a study in Boston, 
Christopher Avery and his colleagues provided 10 hours of 
individualized college advising from an experienced counselor normally 
employed in full-time college counseling at a high school with a 
critical mass of high achievers. The estimated impacts on college 
application and enrollment behaviors were quite small and the costs 
were substantial.\3\ However, there are many other studies of college 
coaching underway, and some, especially those focused on coaching that 
occurs the summer prior to college, are promising.\4\
---------------------------------------------------------------------------
    \3\ Avery, Christopher. 2010. ``The Effects of College Counseling 
on High-achieving, Low-income Students,'' NBER Working Paper 16359.
    \4\ Castleman, Benjamin and Lindsay Page. 2012. ``The Forgotten 
Summer: Does the Offer of College Counseling the Summer After High 
School Mitigate Attrition Among College-Intending Low-Income High 
School Graduates?'' Harvard Graduate School of Education manuscript. 
http://scholar.harvard.edu/files/bencastleman/files/
castleman_page_schooley_-_tfs_-_
011713.pdf.
---------------------------------------------------------------------------
    3. Providing students and families with information about 
institutional graduation rates has not yet been shown to affect college 
decisions. One experimental study in this area estimated impacts on 
families' hypothetical choices but the authors did not observe actual 
decisionmaking.\5\
---------------------------------------------------------------------------
    \5\ Schneider, Mark, and Eric Bettinger. 2011. Filling in the 
Blanks. American Enterprise Institute. http://www.aei.org/papers/
education/k-12/filling-in-the-blanks/.
---------------------------------------------------------------------------
    4. Sharing information about the financial aid application (FAFSA) 
was shown to be far less useful for decisionmaking when compared to 
filling out and filing the form on behalf of families.\6\
---------------------------------------------------------------------------
    \6\ Bettinger, Eric, Bridget Long, Phillip Oreopoulos, and Lisa 
Sanbonmatsu. 2009. ``The Role of Information and Simplification in 
College Decisions: Results from the FAFSA Experiment.'' Unpublished 
manuscript.
---------------------------------------------------------------------------
    5. Finally, I also recommend this What Works Clearinghouse practice 
guide on what high schools can do to help students make better college 
choices. \7\
---------------------------------------------------------------------------
    \7\ http://ies.ed.gov/ncee/wwc/PracticeGuide.aspx?sid=11.
---------------------------------------------------------------------------
                             vivica brooks
    Question. What kind of information is most useful to students when 
making decisions about whether to attend a particular school? I have 
received letters from students that feel they did not have the 
information they needed when they made the decision to attend certain 
programs. Do you have examples of States, institutions or particular 
programs that have successfully given students the range of information 
they need to make informed decisions about their education?
    Answer. Greetings Senator Bennet, thank you for the question. From 
my personal experience (prior to selecting Bowie State University as my 
school of choice) I conducted an extensive amount of research of 
several different institutions and programs such as, the University of 
MD, College Park and Federal Student Aid opportunities. When narrowing 
my choices I found that first, the accessibility of the information 
(meaning it was simplest to find) was the most useful information; the 
tuition costs and financial aid options such as payment plans and 
school-based funding (i.e. work study, residential assistant programs). 
This information helped me to analyze my finances and make solid 
decisions based on what I could afford.
    If there was more information made available about programming that 
assists with the acquisition of books and/or room and board I would 
have made further considerations about the school's affordability. I'd 
also like to note that while there are several programs offered to 
students, the fine print associated with the program is not always 
easiest to understand. For example, in my personal experience with 
subsidized loans, it provided me with financial assistance for 3 
consecutive school years, however, I've reached my loan limit; a limit 
that I wasn't even aware existed. Had the information been made clearer 
to me prior to acceptance of the loans, I would have made some 
alternative decisions as to how many loans I'd accept. While this may 
be a negative, the positive is that I have now researched additional 
programming and understand both the benefits and the terms/conditions. 
For instance, I am a recipient of MD State Financial Aid; the program 
has made accessing information and understanding my responsibilities as 
a recipient very clear. Also, the program contacts me directly with 
updates on the status of my aid, and also offers assistance for any 
question(s) I may have. This program is an example of a successful 
means of helping a student who needs to make informed decisions about 
selecting aid and when selecting schools for consideration.
    Thank you for the opportunity to answer your question. If you have 
any more questions, I'd be happy to answer them.
            Best Regards,
                                             Vivica Brooks,
                                    Bowie State University, Senior.

    [Whereupon, at 11:48 a.m., the hearing was adjourned.]

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