    [Senate Hearing 114-785]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 114-785

      ESSA IMPLEMENTATION: UPDATE FROM THE U.S. SECRETARY OF EDUCATION ON
                              PROPOSED REGULATIONS

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

                                    HEARING

                                     OF THE

                        COMMITTEE ON HEALTH, EDUCATION,
                              LABOR, AND PENSIONS

                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

      EXAMINING EVERY STUDENT SUCCEEDS ACT IMPLEMENTATION, FOCUSING ON AN
         UPDATE FROM THE SECRETARY OF EDUCATION ON PROPOSED REGULATIONS

                                   __________

                                 JUNE 29, 2016

                                   __________

     Printed for the use of the Committee on Health, Education, Labor, and
                                    Pensions

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Available via the World Wide Web: http://www.gpo.gov/fdsys/

                         U.S. GOVERNMENT PUBLISHING OFFICE

    20-675 PDF                WASHINGTON : 2018

              COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                      LAMAR ALEXANDER, Tennessee, Chairman

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

                    David P. Cleary, Republican Staff Director
             Lindsey Ward Seidman, Republican Deputy Staff Director
                      Evan Schatz, Minority Staff Director
                  John Righter, Minority Deputy Staff Director

                                      (ii)

                                C O N T E N T S

                                   __________

                                   STATEMENTS

                            WEDNESDAY, JUNE 29, 2016

                                                                       Page

                               Committee Members

    Alexander, Hon. Lamar, Chairman, Committee on Health, Education,
      Labor, and Pensions, opening statement.........................     1
    Murray, Hon. Patty, a U.S. Senator from the State of Washington..     4
    Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming..    15
    Murphy, Hon. Christopher, a U.S. Senator from the State of
      Connecticut....................................................    16
    Burr, Hon. Richard, a U.S. Senator from the State of North
      Carolina.......................................................    18
    Warren, Hon. Elizabeth, a U.S. Senator from the State of
      Massachusetts..................................................    19
    Isakson, Hon. Johnny, a U.S. Senator from the State of Georgia...    21
    Franken, Hon. Al, a U.S. Senator from the State of Minnesota.....    23
    Roberts, Hon. Pat, a U.S. Senator from the State of Kansas.......    25
    Bennet, Hon. Michael F., a U.S. Senator from the State of
      Colorado.......................................................    27
    Collins, Hon. Susan M., a U.S. Senator from the State of Maine...    29
    Casey, Hon. Robert P., Jr., a U.S. Senator from the State of
      Pennsylvania...................................................    31
    Murkowski, Hon. Lisa, a U.S. Senator from the State of Alaska....    32
    Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode
      Island.........................................................    34

                                    Witness

    King, John, Secretary, U.S. Department of Education..............     6
        Prepared statement...........................................     8

                              ADDITIONAL MATERIAL

    Statements, articles, publications, letters, etc.:
        Ensuring Equity in ESSA: The Role of N-Size in Subgroup
          Accountability, by Alliance For Excellent Education........    39
        Response by Secretary King to questions of:
            Senator Alexander........................................    51
            Senator Enzi.............................................    52
            Senator Collins..........................................    53
            Senator Hatch............................................    53
            Senator Sanders..........................................    55
            Senator Warren...........................................    57

                                     (iii)

      ESSA IMPLEMENTATION: UPDATE FROM THE U.S. SECRETARY OF EDUCATION ON
                              PROPOSED REGULATIONS

                                  ----------

                            WEDNESDAY, JUNE 29, 2016

                                           U.S. Senate,
           Committee on Health, Education, Labor, and Pensions,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 10 a.m., in room
    430, Dirksen Senate Office Building, Hon. Lamar Alexander,
    chairman of the committee, presiding.
        Present: Senators Alexander, Murray, Enzi, Burr, Isakson,
    Murkowski, Collins, Hatch, Roberts, Casey, Franken, Bennet,
    Whitehouse, Murphy, and Warren.

                     Opening Statement of Senator Alexander

        The Chairman. The Senate Committee on Health, Education,
    Labor, and Pensions will please come to order.
        We have a vote at 10:30. We might have another one after
    that. But I think we can surely get through the opening
    statements, the Secretary's statement. And I think Senator
    Murray and I can get through our questions.
        What I will do is I'll try to go vote early and then I'll
    come back, and in the meantime we'll continue the hearing so
    all Senators will have a chance to use their 5 minutes and ask
    their questions.
        This morning we have a hearing on oversight of the Every
    Student Succeeds Act. Senator Murray and I will each have an
    opening statement, and then we'll introduce our witness, the
    U.S. Secretary of Education, John King.
        Secretary King, welcome. We're glad that you're here.
        This is our fourth oversight hearing on the Every Student
    Succeeds Act. Secretary King, you and I have had some debate on
    the meaning of words in the law, some discussion about it. It
    reminded me of Lewis Carroll's book, ``Through the Looking
    Glass,'' when Humpty Dumpty said, ``When I use a word, it means
    just what I choose it to mean, neither more nor less.'' Like
    Humpty Dumpty, we choose our words carefully, and we did when
    we wrote the law fixing No Child Left Behind.
        We held 24 hearings between 2007 and 2014. In 2015, we had
    three hearings. There were 58 amendments, many other
    amendments. The words we used were debated, carefully and
    deliberately chosen. We meant for the words to mean what they
    say, nothing more, nothing less. That, of course, is our job.
    The Constitution settled that a long time ago. An elected
    Congress chooses the words to make the laws. It's the
    Executive's job to implement the law in a way that's consistent
    with the meaning of those words.
        Let me give you an example of doing that properly. When I
    had your job 25 years ago, in 1992, Congress did something I
    very much disagreed with. It passed legislation adopting a
    pilot direct loan program. I had argued that the Department of
    Education had no business being a bank for millions of
    students. There were far too many problems, risks and costs,
    but Congress disagreed. It passed the legislation. The
    President signed it and adopted a pilot direct loan program.
        After the President signed the bill, I had about as much
    time left in my term as you do in yours this year, and it was
    my job to start implementing the law Congress passed with which
    I disagreed. So, I did it, and I faithfully followed the words,
    and I asked all the universities whether they would like to be
    a part of the pilot program, and over time eventually about 25
    percent did. I implemented the law the way Congress wrote it.
        Let me give you an example of how I think the Secretary of
    Education should not respond when implementing a law Congress
    has written. I'm not going to dwell on it because you and I
    have discussed it, and we did again this week. But it's the
    proposed ``supplement, not supplant'' regulation that was
    rejected by a negotiating rulemaking committee. It's a very
    simple provision. It simply says Federal title I dollars that
    go to local school districts are not meant to replace State and
    local dollars for schools. We give title I money to a school, a
    school district has to show the school is getting the same
    amount of State and local dollars it would receive without
    title I money.
        One witness testified at the last hearing the law was so
    plain that there didn't even need to be a regulation, but
    you've come up with a proposal that forces school districts to
    show they essentially equalized spending of their State and
    local dollars among title I and non-title I schools, although
    the new law, in section 1605, explicitly prohibits exactly
    that. According to the Congressional Research Service, the
    proposed regulation ``appears to go beyond what would be
    required under a plain language reading of the statute.'' The
    proposal is so far out of bounds--these are my words--that I'm
    assuming any regulation, if there even needs to be one, will
    bear no resemblance to the proposal you've drafted.
        But let's talk today about the accountability rule that the
    Department proposed on May 31st. This goes to the heart of the
    law to fix No Child Left Behind. In our studies, we heard more
    about testing than any other subject. I even at first proposed
    we eliminate the federally mandated tests. But the more we got
    into it, the more we understood that it wasn't the federally
    required 17 tests that were the problem. It was having the U.S.
    Department of Education make all the decisions about what to do
    about the results of the tests, which is what we call the
    accountability system.
        The Federal Government decided that math and reading test
    results would determine whether schools and teachers were
    succeeding or failing. And I believe that the reason we got 85
    votes in the Senate is because so many were tired--and these
    were teachers, Governors, chief State school officers--of the
    United States Department of Education telling school boards and
    classroom teachers in States so much about what to do with the
    children in their schools.
        I want to make sure that any regulation that your
    Department proposes about accountability is consistent with the
    words we chose and the intent of the bill the President signed.
    You're receiving comments until August 1. You'll consider those
    comments. I look forward to working with you to continue the
    discussions we had this week to ensure that the regulations
    comport with the law.
        Today I'll focus on two main concerns. I'll mention them
    just briefly.
        One is, does the proposed accountability rule actually get
    the Federal Government back in the business of setting State
    academic standards? Senator Roberts asked you about this during
    your confirmation hearing. Under No Child Left Behind, the
    Department, in effect, mandated that States adopt Common Core
    standards. Thirty-eight out of 42 had to in order to receive
    waivers from No Child Left Behind. This new law repealed that
    effective mandate in at least five different specific
    prohibitions. There was nothing unequivocal about it. We also
    changed the law from requiring a State to demonstrate that they
    have adopted challenging standards to say all a State had to do
    was to assure the Secretary that it has adopted those
    standards. We chose our words carefully.
        Your proposal in this regulation says a State must
    ``provide evidence at such time and in such a manner specified
    by the Secretary'' that it has adopted these standards.
    Wouldn't this give you the power to reject the standards by
    rejecting the evidence?
        The second area that I want to mention is does the proposed
    accountability rule get the Federal Government back in the
    business of deciding which schools are succeeding or failing?
    It appears to re-institute the failed No Child Left Behind
    formula requiring that math and reading tests be the primary
    measure for deciding whether schools are succeeding or failing.
    You've invented out of whole cloth a so-called summative rating
    system that's nowhere in the law that would essentially require
    all States to come up with an A through F system for all their
    schools based primarily on test scores on federally mandated
    tests in math and reading.
        The whole point of the law was to return to the States
    whether to do that or not. I know that New York City and
    Florida did that, but other States might not want to do it that
    way.
        Senator Murray often talks about the law's guardrails, and
    we agree there should be some guardrails in this law in what
    States must and may not do. But again, we chose our words
    carefully. They were carefully and vigorously negotiated, and
    any regulation must stay within those words. In fact, the law
    also includes some very specific guardrails on the Secretary,
    specific prohibitions.
        For the last 15 years, the Federal Government has gradually
    become, in effect, a national school board. Congress decided
    last year to reverse that trend. The President signed the bill.
    That should put an end to it.
        On August 1, we really come to the end of an era. I call it
    the end of the ``Mother, May I'' era, an era when Governors and
    chief State school officers had to come to Washington to get
    permission to do a number of things about their schools. Those
    conditional waivers are gone. The following mandates are gone
    from No Child Left Behind: the standards mandate, the adequate
    yearly progress mandate, the test-based accountability, the
    school turnaround models, the highly qualified teacher
    requirements, teacher evaluation mandates. Those
    responsibilities have now been restored to States and local
    school boards and classroom teachers.
        Our hope is that this new flexibility will unleash a new
    era of innovation and excellence in student achievement, one
    that recognizes that the path to higher standards, better
    teaching and real accountability is classroom by classroom,
    community by community, and State by State, and not through
    Washington, DC.
        Senator Murray.

                      Opening Statement of Senator Murray

        Senator Murray. Thanks very much, Chairman Alexander.
        Secretary King, thank you for being here today. I look
    forward to today's discussion.
        We are here today, almost 7 months after the President
    signed the Every Student Succeeds Act into law, for another
    update on its implementation. As we have talked about before,
    No Child Left Behind was badly broken. This law fixes it in
    many critical ways. But a law is only as good as its
    implementation, so I'm really glad we're having this discussion
    today.
        I want to kick this off by focusing on two areas,
    accountability and the need for a continued collaboration and
    inclusion as this process continues, and I will have questions
    on a few others.
        First, as I have talked about since before we passed this
    law, ESSA is an extension of one of the most important goals of
    our country, ensuring civil rights and equality of opportunity
    for every child. In order to do that, we need to make sure
    schools and States are held accountable for providing a quality
    education to all of their students, no matter where they live
    or how they learn or how much money their parents make.
        This is critical because we know what happens when we don't
    have true accountability. Inevitably, it's the kids from the
    low-income neighborhoods, kids of color, kids with
    disabilities, and kids learning English who too often fall
    through the cracks. We know we can do better as a country, but
    we also know we're not there yet.
        Secretary King, I appreciate the work you've done here to
    prioritize the regulations focused on implementing the Federal
    guardrails in the law, and I'm very glad to see strong
    regulations coming out that make sure the law operates as it
    was intended and truly accomplishes the clear accountability
    goals we laid out. This is good news for students; I hope it
    continues.
        I am concerned about a few provisions in the draft
    regulations that could derail those efforts; for example,
    allowing States to compare the performance of individual
    subgroups to the average performance of all students in the
    State. ESSA was clear: the performance of every single student
    in every single subgroup matters. But allowing States to
    measure subgroup performance by comparing to the average
    performance of all students could lower the expectation for
    students, because many students could be underperforming,
    driving down the average performance level within a State.
        That's why instead, all student subgroups should be
    expected to meet State standards and academic goals established
    by the State regardless of how they compare to other students
    in the State. I'll have a question on this where we can go into
    more details, but this is something I'm taking a close look at,
    as well as other regulations from the Department for school
    interventions and supports.
        Because the intent of the law is clear, it needs to
    actually help students succeed, and we need strong regulations
    flowing from that goal if we want this law to do what so many
    of us hoped that it will.
        One other issue I want to touch on is the need for
    continued collaboration to encourage and ensure the voices of
    all stakeholders are heard throughout the ESSA implementation
    process. This is so important, but it won't happen on its own.
    It requires the Department to use every available opportunity
    to assist States and school districts, as well as breaking down
    barriers to ensure full participation.
        I am pleased the Department sent a letter to States last
    week highlighting the importance of stakeholder engagement. The
    letter provides helpful suggestions to States to improve
    stakeholder engagement, including holding meetings at varying
    times during the day, providing accommodation and support to
    participants, and ensuring transparency in the process and
    timeline for engaging in the plan development process. Getting
    input from teachers, civil rights groups, parents, and many
    more will be essential in making sure the law works in the
    coming months and years, and that's something I feel very
    passionately about.
        When we were working to pass this law, I worked hard to
    bring in voices of students and those who would be instrumental
    in implementing it, voices from teachers like Lyon Terry in
    Seattle, whose hard work to get his kids excited about coming
    to school was being labeled as failing under our previous
    broken education law; voices from parents like Duncan, whose
    son attends Highland Public Schools, where many of the kids in
    the school district struggle with poverty; and voices from high
    school principals like Laurie Wineberry from Spokane, who
    talked to me about the desperate need for commonsense policies
    for testing in her school. Those were important voices when we
    wrote the law; they are important voices as we implement it.
        I'm very glad the Department is focused on true
    collaboration, and that needs to continue.
        I'm also glad that last week the Department, in
    collaboration with HHS, provided clarity for how States, school
    districts, and child welfare agencies can implement the new
    foster care requirements under ESSA by working together to
    support foster children enhance their educational success.
        This Administration has a little less than 7 months left in
    office, but that's still plenty of time to make progress on
    these and several other key areas, and I'm confident we can.
    I'm confident because all the people I just talked about, Lyon
    and Duncan and Laurie and so many others across this country,
    including many in this room today, who speak out for change and
    empower our Nation's students and schools, inspire me to keep
    fighting. I know this is a priority, not just for the members
    of this committee and the Department but for our entire
    country.
        Secretary King, thank you for being here today. I'm looking
    forward to this hearing to hear more from you and the steps
    you're taking to implement the law so that it works for all of
    our students and what all of us can do to help to make sure
    that happens. Thank you.
        The Chairman. Thank you, Senator Murray.
        Secretary King, you're welcome to make a statement. If you
    could keep it to about 5 minutes, we'd appreciate it. That
    would give the large number of Senators we have here today a
    chance to ask questions.
        Mr. Secretary.

    STATEMENT OF JOHN KING, SECRETARY, U.S. DEPARTMENT OF EDUCATION

        Secretary King. Thank you so much. Thank you, Chairman
    Alexander, Ranking Member Murray, and members of the committee.
    I appreciate the invitation to come back before the committee
    and testify today regarding how the Department of Education is
    moving forward with the implementation of the Every Student
    Succeeds Act, which the President signed into law on December
    10, 2015. I am grateful that, thanks to the leadership of
    Chairman Alexander and Ranking Member Murray, as well as the
    members of this committee, Congress acted last year to
    reauthorize this critical piece of legislation.
        Over the past 7\1/2\ years, thanks to hard-working
    educators supported by families, our schools and students have
    made tremendous strides. The high school graduation rate is at
    a record high, and schools in 49 States are helping students
    meet college-and-career-ready standards and assessing their
    progress. More States also are investing more money and helping
    to ensure children are ready to succeed when they enter
    kindergarten, increasing their spending on early learning by
    $1.5 billion over the past 3 years. And yet, so much work
    remains.
        Far too many students from every background still arrive at
    college needing remedial classes, and Black and Hispanic
    students continue to lag behind their White peers in
    achievement and graduation rates. The latest figures from our
    Civil Rights Data Collection illustrate in powerful and
    troubling ways the disparities in opportunity and experience
    for different groups of students in our schools.
        Just a few statistics. Students with disabilities are more
    than twice as likely as students without disabilities to be
    suspended. Schools with high concentrations of Black and Latino
    students are less likely to offer advanced courses such as
    calculus and physics, which also are critical for success in
    college. One out of every five high school students who are
    English learners is chronically absent. These are the very
    children that the Elementary and Secondary Education Act of
    1965, as most recently amended by ESSA, was designed to protect
    and serve.
        The good news is that ESSA provides local communities and
    States a pathway toward excellence and equity for all students,
    as well as tools that will help them get there. Using the
    greater flexibility in ESSA, States will be able to go beyond
    test scores in math and English by adding their own indicators
    of school quality and progress to ensure a rigorous, well-
    rounded education for every student.
        We know that strong literacy and math skills are necessary
    for success in college, careers, and life, but they are not
    sufficient. Importantly, a rich, rigorous, well-rounded
    education helps our children make critical connections among
    what they're learning in school, their curiosities, their
    passions, and the skills they will need to become the
    sophisticated thinkers and leaders who will solve the most
    pressing challenges facing our communities, our country, and
    our world.
        Understanding that this work requires all of us working
    together, States are expected to involve local educators,
    parents, civil rights groups, business leaders, tribal
    officials, and other stakeholders in choosing other indicators
    of quality such as decreases in chronic absenteeism or
    increases in the number of students taking and passing advanced
    classes.
        The legislation also includes critical protections and
    provides additional resources for our traditionally underserved
    students such as students of color, students from low-income
    families, students with disabilities, students learning
    English, Native American students, foster and homeless youth,
    and migrant and seasonal farm worker children.
        States must take meaningful action to improve schools where
    students or groups of students are struggling, and in high
    schools that have low graduation rates year after year. But the
    flexibility of the law also allows them to tailor these
    interventions to schools' specific needs. As with all
    legislation and policy, the quality and fidelity of their
    implementation are critical to success. Please allow me to
    update you quickly on our progress toward helping States
    implement this law fully and faithfully.
        The first thing we did was listen. To date, we've convened
    over 200 meetings with stakeholders across the country. These
    included dozens of meetings with educators and school leaders
    in rural, urban, and suburban communities. We posted a notice
    seeking public comment on areas in need of regulation and
    requested feedback on areas in need of guidance. We received
    hundreds of comments.
        In response, we prioritized accountability, including data
    reporting and State plans, assessments under title I, parts A
    and B, and title I's requirement that Federal dollars
    supplement, not supplant, State and local funds for education.
        As you know, this past spring we engaged in negotiated
    rulemaking. The negotiators were able to reach consensus on
    assessment, and we will move forward with publishing those
    regulations for comment. The negotiators were not able to reach
    consensus on supplement, not supplant, but we have gotten a lot
    of important feedback and will continue to listen to that
    feedback.
        Last month we issued our proposed rulemaking on
    accountability, State plans, and data reporting. It was
    published in the Federal Register on May 31st, and we will
    continue to receive comment through August 1st. We encourage
    comment on these proposed regulations and look forward to
    responding to that comment.
        Consistent with the strong civil rights legacy of the law,
    the proposed regulations ensure a focus on all students,
    including historically underserved subgroups of students and
    accountability decisions. They ensure that meaningful action is
    taken to improve the lowest-performing schools, with families,
    educators, and stakeholders playing an important role in the
    process. They also ensure that educators, students and families
    have an accurate picture of students' academic performance.
        We've also committed to issue guidance in several key areas
    based on the feedback we've received. We already recently
    issued guidance around foster youth. We will soon issue
    guidance related to homeless youth, as well as English
    learners, and after that on title II, title IV, and early
    learning. As we issue that guidance, we are guided by the many
    comments we've received, looking for technical assistance and
    support, and we will continue to take comment from stakeholders
    in other areas where guidance may be helpful.
        In conclusion, ESSA is a bipartisan achievement that
    provides the statutory foundation to close our remaining gaps
    and address our persistent inequities. I have appreciated
    hearing many of your thoughts on implementation of the law so
    far and look forward to hearing from you today. We take your
    feedback and all feedback we receive very seriously. I look
    forward to continuing to work with you to ensure high-quality
    implementation of this law supported by the Department that
    guarantees a world-class education for every child.
        Thank you. I'm happy to take any questions you may have.
        [The prepared statement of Secretary King follows:]
                   Prepared Statement of Secretary John King
        Thank you Chairman Alexander, Ranking Member Murray, and members of
    the committee. I appreciate the invitation to come back before this
    committee and testify today regarding how the Department of Education
    is moving forward with the implementation of the Every Student Succeeds
    Act (ESSA), which the President signed into law on December 10, 2015. I
    am grateful that, thanks to the leadership of Chairman Alexander and
    Ranking Member Murray, and the members of this committee, Congress
    acted last year to reauthorize this critical piece of legislation.
        Over the past 7 years, our schools and students have made
    tremendous strides. Our Nation's high school graduation rate is at a
    record high 82 percent, in part due to significant gains by
    historically underserved student groups. Forty-nine States and the
    District of Columbia have adopted and are implementing rigorous,
    college-and-career-ready standards and aligned assessments for all
    students. In the last 3 years alone, since the President's call to
    action on preschool for all, 38 States and the District of Columbia
    have increased their public pre-school investments for 4 year olds by
    more than $1.5 billion. When the President made that call to action, 11
    States did not offer preschool. Now all but four States do. Between
    2008 and 2013, there was a nearly 30 percent reduction in the number of
    students who did not graduate on time and college enrollment for Black
    and Hispanic students is up by more than a million.
        Yet so much work remains. Far too many students from every
    background still arrive at college needing remedial classes. And
    pernicious gaps remain for students who have been underserved for
    generations. Black and Hispanic students continue to lag behind their
    White peers in achievement and graduation rates. Our recent Civil
    Rights Data Collection (CRDC) release illustrates, in powerful and
    troubling ways, the disparities in opportunities and experiences that
    different groups of students have in our schools. Students with
    disabilities are more than twice as likely as students without
    disabilities to be suspended. Black and Latino students participate at
    lower rates in gifted and talented education programs. Schools with
    high concentrations of Black and Latino students are less likely to
    offer advanced courses, such as calculus and physics. One out of every
    five English Learner and more than a quarter of Native American high
    school students is chronically absent. These are the very children that
    the Elementary and Secondary Education Act of 1965, as most recently
    amended by ESSA, was designed to protect and serve.
        ESSA advances equity by upholding critical protections for
    America's disadvantaged students. The law maintains resources and
    supports for students from low-income families; students with
    disabilities; English Learners; Native American students; foster and
    homeless youth; neglected, delinquent, or at-risk youth; and migrant
    and seasonal farmworker children. ESSA requires that all students be
    taught to rigorous college-and-career-ready academic standards and that
    vital information about their progress and performance be shared with
    educators, families, students, and communities on an annual basis,
    through statewide assessments. For the first time, the law asks States
    to consider the progress of all of their English Learners toward
    English Language Acquisition in the context of their title I plans.
    ESSA also encourages a smarter approach to testing. Our Administration
    is pleased that ESSA includes provisions consistent with President
    Obama's Testing Action Plan, which put forward principles for reducing
    the amount of classroom time spent on unnecessary standardized testing,
    encouraging States to limit the amount of time devoted to these
    assessments and supporting efforts to audit, streamline and improve
    assessments at the State and local levels.
        Through this law, Congress has reinforced the Federal commitment to
    holding ourselves accountable for the progress of all students while
    establishing a new, improved Federal-State partnership that moves away
    from the one-size-fits-all approach of No Child Left Behind (NCLB) and
    its overemphasis on testing as the only means of assessing how schools
    and students are doing. ESSA builds on the work already underway in
    States to develop their own strong State systems for school
    improvement. And it maintains the expectation of meaningful action to
    support students in schools where students or groups of students are
    struggling--and, in high schools that have low graduation rates year
    after year.
        ESSA also provides local communities and States with a pathway
    toward equity and excellence for all students, by reclaiming the goal
    of a well-rounded education for all students. Using the greater
    flexibility in ESSA, States will be able to go beyond test scores in
    Mathematics and English Language Arts by adding their own indicators of
    school quality and progress, to ensure a rigorous, well-rounded
    education for every student. We know that strong math and literacy
    skills are necessary for success in college, careers, and life--but
    they are not sufficient. That may mean States measuring how students--
    particularly historically underrepresented subgroups of students--are
    doing in Advanced Placement and International Baccalaureate courses, or
    whether they have access to rigorous coursework like physics or
    computer science. It may mean States taking a closer look at chronic
    absenteeism, post-secondary enrollment, placement in remedial college
    coursework, or socioemotional development as additional measures of how
    schools are serving all students.
        The possibilities are expansive, but their real-world impact for
    children will depend on implementation. A rich, well-rounded education
    helps our children make critical connections among what they're
    learning in school, and their curiosities, their passions, and the
    skills they will need to become the sophisticated thinkers and leaders
    who will solve the most pressing challenges facing our communities, our
    country, and the world.
        As a parent of children in public school, and a former teacher,
    principal, and State education commissioner, I can tell you that the
    prospect of a new law of this magnitude is both exciting and daunting.
    There is an incredible amount of work to be done at all levels to
    implement the law. ESSA represents a significant departure from NCLB in
    many ways. There are new opportunities, such as the Innovative
    Assessment Demonstration Authority, and new requirements, including the
    requirement to publicly report per-pupil expenditure data. The law
    rightly shifts more authority to States and also expects more of them--
    from developing and incorporating new indicators beyond test scores and
    graduation rates into their accountability systems to building the
    infrastructure for meaningful stakeholder consultation and engagement.
        Since the bill was signed into law, we have been listening to the
    many stakeholders who care about implementation. We met with teachers
    and principals and their representatives, State and school district
    leaders, tribal officials, parents, civil rights leaders, and many
    others to hear their questions and concerns and identify areas in which
    regulations, guidance, or technical assistance might be most needed. We
    posted a notice seeking public comment on areas in need of regulation
    in the Federal Register, and also requested feedback on areas in need
    of guidance. We received hundreds of comments. All told, we held over
    200 meetings with stakeholders across the country. And our outreach
    continues.
        In response to that feedback, we announced our intention to
    regulate in a few key areas: accountability (including data reporting)
    and State plans, assessments under title I, parts A and B, and title
    I's requirement that Federal dollars supplement, not supplant, State
    and local funds.
        As required by statute, for the title I, part A assessment and
    supplement, not supplant regulations, we engaged in negotiated
    rulemaking in late March and early April. Through that process, we were
    able to gather a lot of good input and feedback, and reached consensus
    on assessments, but not supplement, not supplant. For title I, part A
    assessment regulations, the consensus-based language will be reflected
    in the notice of proposed rulemaking that we will publish later this
    year. For supplement, not supplant, we are considering how best to
    address the feedback we received from a wide variety of stakeholders
    and carefully considering how best to meet the objective behind this
    proposed regulation.
        Our notice of proposed rulemaking (NPRM) on accountability, State
    plans, and data reporting was published in the Federal Register on May
    31 for a 60-day public comment period concluding on August 1. We
    welcome comment from all quarters on these proposed regulations--
    including from members of this committee. In addition, the NPRM
    contains several directed questions on which the Department is seeking
    particular input. As always, we know the regulations will be improved
    through public input, and we look forward to receiving feedback.
        One of our top priorities in the proposed regulations was to
    guarantee a meaningful role for stakeholders in the development of each
    State's vision for its educational system. It is important that the
    input and perspectives of parents, teachers, principals, civil rights
    and community leaders, and other State and local education and
    community leaders be reflected in both the initial development and the
    ongoing implementation of State plans under ESSA, especially as State
    and local leaders shape new school accountability systems under the
    law.
        Our proposed regulations on accountability create flexibility for
    States to create their own vision of an excellent, well-rounded
    education, and add their own indicators of school quality or student
    success to include in their accountability systems, such as chronic
    absenteeism or access to and success in advanced courses. States have
    flexibility to choose these indicators, as long as they can be measured
    by subgroup, meaningfully differentiate among schools, and demonstrate
    that they are related to academic achievement or graduation rates.
        Consistent with the strong civil rights legacy of the law, the
    proposed regulations ensure a focus on all students and historically
    underserved subgroups of students in accountability decisions, and
    provide safeguards to ensure that all students have an accurate measure
    of their academic performance, and that parents and communities are
    informed when students are falling behind. And the proposed regulations
    confirm that public charter schools must be included in State
    accountability systems.
        The proposed regulations ensure that meaningful action is taken to
    improve student outcomes in the lowest-performing 5 percent of schools,
    in schools that fail to graduate at least two-thirds of their students,
    and in schools where a subgroup of students is consistently
    underperforming or chronically low-performing. At the same time, the
    regulations build on the new law's flexibility around school
    improvement and intervention and support locally designed solutions to
    improve struggling schools, and provide a clear role for parents,
    families, educators, and stakeholders to meaningfully participate in
    the implementation process. These strategies must be evidence-based
    and, as a part of determining how to improve their lowest-performing
    schools, districts must look at resource inequities.
        The proposed regulations ensure that parents, educators, and
    community members have key information about how schools and students
    are performing and being supported, providing clear and transparent
    data on report cards on critical measures of student success, school
    quality, and resource equity--including per pupil expenditures, and
    enrollment in post-secondary education. And in order to ensure that
    parents and students have a clear sense of how their schools are
    performing, the proposed regulations require a comprehensive summative
    rating for each school based on the State-designed system of
    indicators.
        Finally, the proposed regulations encourage States to think
    comprehensively across their programs about how to support student
    success, and streamline requirements, through their submission of
    consolidated State plans. As a former State chief, I know how important
    it is not to think about these programs as separate silos, and instead
    to think holistically about the best ways to spend Federal funds.
        In April, I announced that the Department would be issuing non-
    regulatory guidance on several key topics: students in foster care,
    homeless students, and English Learners. Each of these topics was
    raised frequently in our stakeholder outreach. I am happy to report
    that last Thursday we released the first of those three--Ensuring
    Educational Stability for Children in Foster Care--and plan to issue
    guidance to support homeless students and English Learners at the end
    of the summer or early fall. The Department is also working on guidance
    to support States and districts as they implement title II, title IV,
    and the provisions in ESSA around early learning. Our aim with these
    guidance documents will be to highlight examples and best practices as
    States and districts make use of some of the new funding opportunities
    in the law. These guidance documents are designed to help States and
    school districts understand their options and share what the Department
    has learned about what works across the country.
        Last week's guidance addresses concerns specifically related to
    students in foster care, who are more likely to lag in academic
    achievement or be retained in grade, and less likely to graduate high
    school, than their peers. An important contributing factor is the high
    mobility of these children, which often causes unplanned school changes
    and slowed academic progress.
        To address these concerns, ESSA added important new protections for
    children in foster care to promote greater educational stability and
    improved educational outcomes overall. Our guidance on these ESSA
    foster care provisions, released jointly with the Department of Health
    and Human Services, clarifies the new statutory requirements regarding
    children in foster care, promotes greater collaboration between State
    educational agencies, local educational agencies, and child welfare
    agencies, and highlights promising examples to help guide
    implementation. We hope that this guidance, developed with the input of
    a diverse group of stakeholders, will be a helpful tool that equips the
    field to successfully implement the new foster care provisions under
    ESSA and to improve supports for children in foster care more
    generally.
        We are continuing to engage with stakeholders to identify
    additional areas where guidance and technical assistance may be useful.
    Our goal is a Federal-State partnership that will support local school
    districts and their schools in helping every student succeed.
        As I noted at the beginning of my remarks, we have made incredible
    progress as a nation over the past several years, but there is more to
    be done. ESSA is a bipartisan achievement that provides the statutory
    foundation to close our remaining gaps and address our persistent
    inequities. I have appreciated hearing many committee members' thoughts
    on our implementation of the law so far, and look forward to hearing
    from you today. I take your feedback, and all the feedback we receive,
    very seriously. I look forward to continuing to work with you to ensure
    a high-quality implementation of this law, supported by the Department,
    so that we can ensure a world-class education for every child.
        Thank you. I am happy to answer any questions that you have.

        The Chairman. Thank you, Mr. Secretary.
        We will begin a round of questions now.
        Mr. Secretary, my goal would be that the country feels the
    same way about this new law at the end of this year as it did
    at the end of last year. I think there was a good deal of
    literal rejoicing that we had achieved a consensus in a complex
    area that affected so many millions of American families and
    brought some stability to elementary and secondary education
    policy. I'm hopeful that after the regulations are finally
    done, that we'll still feel the same way.
        In that spirit, let me continue a conversation you and I
    were having, and I only have 5 minutes, so I want to get in two
    or three questions. When we wrote the law, we envisioned that
    States would have time to plan for the transition to the law.
    You've heard and we've heard some States say that your proposed
    regulation doesn't permit a State to do this.
        Let me ask you if what I'm about to describe would be an
    appropriate timeline for a State, in your view, that States
    would develop and implement their new accountability systems
    during the school year that begins in 2017 and 2018. That's
    next year. That means they would be collecting data in that
    year. Then in the following year, 2018-19, they would be
    identifying new schools in need of improvement. That would
    leave the year coming up, 2016-17, as a transition year during
    which I would assume that States would continue to work with
    their already identified schools, although some States might
    want to move more rapidly.
        Does that schedule--would your proposed regulation allow
    that sort of schedule?
        Secretary King. I appreciate the question. Our goal is to
    make sure that as the committee has developed this law, that we
    focus on trying to expand the definition of educational
    excellence, giving States the opportunity to add indicators
    alongside English and math performance and graduation rates. We
    want States to move as quickly as they can on that.
        The Chairman. Right.
        Secretary King. The timeline assumes that, yes, 2016-17
    would be a transition year and that States would continue
    intervention in their previously identified schools.
        The Chairman. Right.
        Secretary King. The timeline in the current draft
    regulations on which we are seeking comments anticipates that
    States would implement their new accountability system in 2017-
    18 and address the needs of schools identified in that
    accountability system in 2017-18. That said, we've heard
    feedback from States that some States would like the ability to
    carry over the schools in which they are intervening from 2016-
    17 into 2017-18. That's feedback that we're open to and will
    continue to listen closely to comment.
        The Chairman. Just so I understand, what I said was that a
    State would collect the data and develop its new accountability
    system in 2017-18, and then begin to identify the schools in
    2018-19.
        Secretary King. Yes, understood. Under the current
    regulations, that would not be. The interventions would begin
    in 2017-18. But as I said earlier this week and will emphasize
    again, we are open to comment on the timeline and open to
    adjusting that timeline.
        The key question that States will need to address as they
    provide comment is in which schools will they provide
    additional support in 2017-18? Would that be the same schools
    as in 2016-17?
        The Chairman. So I'll have time for one more question, let
    me strongly urge you to make clear to schools as quickly as
    possible that if they choose to, they could implement their new
    accountability systems in 2017-18, and then they could identify
    new schools under that system in the following year, 2018-19,
    if they choose to do that.
        May I move on to one other question? Your proposed
    regulation requires that all schools receive a single summative
    rating based on a State's accountability system. An A to F
    rating system might be a good idea for some States, but in
    other States it's been widely criticized. New York City is
    moving away from using an A to F system. And furthermore, the
    law prohibits the Secretary from ``prescribing the specific
    methodology used by States to meaningfully differentiate or
    identify schools.''
        I don't see anywhere within the law the words ``single
    summative rating,'' and how do you justify a proposed
    regulation requiring such a rating in light of the prohibition
    that was specifically in the law that the President signed in
    December?
        Secretary King. The key is that parents, educators,
    communities have clear information about the performance of
    schools. We do not require in the regulations the use of an A
    through F rating.
        The Chairman. A single summative rating.
        Secretary King. States could take a variety of approaches
    to a single summative rating. They could use an A through F
    system if they so chose. They could use a numerical index if
    they so chose. Or they could use a categorical system, which
    actually is required in the statute. States will have to
    identify schools for comprehensive improvement, comprehensive
    support. In order to do that, they will need a summative rating
    to achieve that status. Similarly, States will need to have
    schools that get targeted support. That, too, is a categorical
    rating. And then there would be schools that would get neither
    comprehensive nor targeted support, and that too is a
    categorical rating.
        All we require is that they have some methodology by which
    they can identify those schools and clearly communicate about
    the performance of their schools with the public.
        The Chairman. My time is up. But I would like you to think
    about where in the law you get the authority to provide for a
    single summative rating.
        Senator Murray.
        Senator Murray. Thank you, Mr. Chairman.
        The Chairman. May I--not taking time off of you, I think I
    will go vote, if I may, and leave you in charge of the
    committee, and I'll come right back.
        Senator Murray [presiding]. OK, do that.
        Mr. Chairman, before I begin my round of questions, I want
    to echo the concerns that were voiced about the timeline for
    identifying the schools for improvement.
        Like the Chairman, I have heard from stakeholders that
    States may not have their new accountability systems in place
    by the beginning of the 2017-18 school year, and as a result
    States would have to identify schools based on old data from
    systems designed before ESSA was actually signed into law, and
    that's deeply concerning to teachers and parents in my State
    and around the country. I hope, as your Department works on the
    final regulation, you'll address that very real issue for our
    States and our schools.
        On the questions, I really worked hard to make sure that
    ESSA requires schools to receive supports and interventions
    where any group of students is consistently underperforming.
    However, I'm very concerned that the draft rule weakens that
    requirement by allowing States to compare the performance of
    subgroups of students to other students who may also be
    underperforming rather than requiring States to ensure each
    individual subgroup of students makes sufficient academic
    progress on their own.
        In practice, that could mean that a school could have a
    group of students--say, students with disabilities--missing
    their State-set goals for many years and not receiving the
    support which is so important that they need to improve, as
    required by ESSA. How do you square that proposal in the
    regulation with the requirements of the law?
        Secretary King. Yes. We think it's very important that
    States and districts are focused on their schools where
    subgroups are underperforming. The regulations create
    parameters for States to develop their systems for identifying
    those schools that need targeted support for underperforming
    subgroups and provides options that States could use a system
    that relies on goals and targets. States could use a system
    that relies on the gap between subgroups and the highest
    achieving subgroup, for example. But States ultimately would
    have to identify those schools where they have struggling
    subgroups, and also would have to identify those schools where
    the struggling subgroups are struggling at a level that's
    consistent with the bottom 5 percent of schools as well.
        But this is a place, again, where we're open to feedback,
    and certainly there are contrasting views on what the
    parameters for State subgroup, targeted subgroup identification
    should be, and we're open to feedback on that.
        Senator Murray. OK. I just want to make sure they get the
    resources they need, and if we're not identifying them, they
    won't.
        On another issue, I'm very concerned that my home State of
    Washington is facing a homelessness crisis. We have school
    districts like Everett where the number of homeless students
    has risen to almost 1,000. McKinney-Vento liaisons are
    struggling now to meet the increased needs of homeless children
    and families, and that has been a goal of mine for a very long
    time, to make sure we meet their needs.
        ESSA makes a number of changes designed to increase the
    capacity of liaisons to identify and support homeless children
    so that they can succeed in school. How is your Department
    planning to make sure that these changes are implemented
    effectively?
        Secretary King. I share your commitment to addressing the
    needs of homeless students. We've been holding conversations
    with students who have been homeless with advocacy groups to
    try to develop our guidance to implement the provisions of the
    new law regarding homeless students, and we expect to issue
    that guidance shortly this summer.
        Senator Murray. OK, I'll be looking for that.
        I wanted to ask you about the preschool, which, as you
    know, is a priority of mine. ESSA includes new policies to
    encourage our States and districts and schools to use money for
    preschool programs. I'm very proud that my home State of
    Washington is leading the way when it comes to using this
    funding for preschool. Bremerton School District uses their
    title I money to raise the quality of child care so that kids
    are prepared to learn when they start kindergarten.
        How is your administration planning to get the word out
    about these new provisions and help States leverage their ESSA
    funding to improve access to high-quality early learning?
        Secretary King. We think the commitment to preschool is one
    of the signature achievements of ESSA. We are working with
    Health and Human Services on an MOU around continued
    implementation of the Preschool Development Grant Program and
    its new form in ESSA, and we are working on guidance on early
    learning that will focus on best practices and examples of
    approaches just like the one you're describing, where States
    may use their title I dollars or school improvement dollars to
    focus on expanding access to preschool for students most in
    need.
        Senator Murray. OK. And finally, I'm hearing a lot about
    teacher shortages in my State, particularly special education,
    teachers of English learners, STEM teachers. In ESSA, we
    rewrote title II dealing with teachers to improve that. I
    wanted to ask you, how is the Department planning to make sure
    that States and districts know about the new tools in ESSA?
    Because we are facing this crisis.
        Secretary King. I'm proud to say States are doing, I think,
    some good work in this area through the equity plans that were
    developed under NCLB and that are continued under ESSA. There's
    an opportunity for States to refine those equity plans. We also
    are developing guidance on title II that we expect to issue
    later this year that will help point States toward the
    available resources and to some examples of best practice. And
    as you know, the President has also made additional proposals
    in the 2017 budget around these kinds of teacher shortage
    issues, including strengthening teacher loan forgiveness and
    the Best Job in the World initiative, which would focus on
    recruiting great teachers to high-need schools.
        Senator Murray. OK, very much appreciate that.
        Senator Enzi.

                           Statement of Senator Enzi

        Senator Enzi. Thank you, Senator Murray. I appreciate this
    hearing, and thank you for being here, Mr. Secretary.
        You and I had a phone conversation prior to your HELP
    Committee confirmation hearing in which you kind of conveyed to
    me that you didn't intend to follow the Every Student Succeeds
    Act as it's written. That led me to vote against your
    confirmation. An example is Section 8205 of the bipartisan law
    states that the Secretary must identify the Department of
    Education positions that are no longer required due to the
    elimination of programs and subsequent shift of authority back
    to the States. That law requires the Secretary to, not later
    than 1 year after such date of enactment, reduce the workforce
    of the Department by the number of full-time equivalent
    employees the Department identified.
        When I asked you if you were on track to reduce the number
    of positions at the Department of Education within 1 year, you
    stated to me that you were going to move those positions to
    other areas within the Department. So I wrote you a letter
    after that conversation asking you to clarify your answer. I
    had to wait 3\1/2\ months for a response from you to that
    letter, and I only got it yesterday afternoon. I hope we don't
    have to have a hearing any time we want to get a late response
    from you, and I'd like to know if you're on track to reduce the
    number of positions within the Department of Education per the
    statutory requirements that none of us voted against and that
    was signed into law by President Obama.
        We all agreed to reduce the size of the Department of
    Education. It's the law. Will you do so?
        Secretary King. To be clear, we will certainly follow the
    statute. The programs that we discussed in our call that
    existed in 2015 were funded through the appropriations process
    in 2016. Those programs continue, and the employees associated
    with those programs continue to do that work. As programs are
    phased out through the appropriations process and the close-out
    process is completed for those programs, yes, those positions
    would be eliminated. We talked about the individuals, the
    incumbents in those positions, and I said I thought it was
    likely that some of those people would pursue other positions,
    available positions within the Department.
        If there are programs that are eliminated, then those staff
    positions will not be needed. Virtually every program that
    existed in 2015 was funded through the appropriations process
    for 2016.
        Senator Enzi. In the Senate there are distinctly different
    jobs. The appropriators get to set the maximum amount of money
    that you can do. The authorizers set what you can do. That law
    is very clear as it's written, and we worked on this
    reauthorization for many years, and I think we finally got it
    to where it needs to be. We're not rewriting it, and I expect
    that you won't do it as well. I'd encourage you to answer all
    congressional inquiries within a timely manner and actually
    have the inquiry come from you. I haven't gotten anything from
    you yet. I've gotten it from some assistants, and I had to wait
    over 3 months for a response to that letter I wrote allowing
    you an opportunity to clarify an answer that troubled me.
        There are two other letters that were sent by Senator
    Alexander and I, and again those letters are answered by
    subordinates. I appreciate the response from your staff, but
    when I write to you, I expect to hear from you. Because we're
    doing a vote, I won't take a lot of time. I've got two more
    very important questions that I think are a part of the law
    that I will submit, so I yield the balance of my time.
        Senator Murray. Senator Murphy. Senator Murphy, I believe
    Senator Alexander should be back by the time you finish as
    well.

                          Statement of Senator Murphy

        Senator Murphy. OK. Thank you very much, Senator Murray.
        Welcome back, Secretary King. Thank you very much for being
    so available to us, making frequent visits before the
    committee. I know how important this is to you, and you know
    how important it is to us.
        I want to talk to you about the accountability regulations,
    and in particular I wanted to ask you two questions, one about
    the regulations around N size, which for members here that
    don't know is the terminology we use to determine the size of
    the subgroups that are counted for accountability purposes,
    then I want to ask you a second question on how we measure the
    performance of the subgroups.
        As many of us have said over and over and over again, ESSA
    is fundamentally a civil rights law. There's no reason for the
    U.S. Congress to be involved in the business of local education
    unless we are in the business of making sure that this is a
    basket of civil rights protections. We made very clear in the
    law that we wanted schools to have specific, targeted
    interventions for what we call subgroups. These are populations
    of poor students or disabled students or minority students. But
    we also specifically said in the law that Congress wasn't going
    to dictate, nor was the Administration going to dictate, how
    big these subgroups would be. But clearly, there is a number
    that is in violation of both, I would argue, the spirit and the
    letter of the law. If you had a subgroup that was 100 students
    large and anything under 100 students didn't count as a
    subgroup, then you wouldn't be in compliance with the law.
        Rightfully, the regulations, true to the law, not stating a
    particular number, say that if your number is 30 or higher, you
    have to explain why. And the reason for that is that if every
    State pegs their number at 30 or higher, then one out of every
    five disabled students, for instance, in this country won't be
    subject to any accountability standards.
        I wanted to ask you about why you picked this number 30,
    because I think there's a lot of us who are concerned that that
    number is too high; that, in fact, there are 29 States today
    that have N sizes that are under 30 that under this regulation
    might consider moving that number up.
        Just talk to me about this issue of why you picked 30. Many
    of us are very concerned that if that becomes the new normal
    and any minority student or poor student who is in a school and
    there's less than 30 of them, they won't be counted, that
    leaves a lot of kids outside of the accountability system. Talk
    to me about that.
        Secretary King. As you indicated, the law preserves the
    ability for States to set the N size, but we wanted to make
    sure that there were thoughtful parameters as States think
    about what N size to use. We require them, as you said, to
    provide a justification if they are going over 30. We did that
    based on research evidence. There was an IES study that showed
    that for students with disabilities, if you set the N size
    above 30, you would only get to about 32 percent of students
    with disabilities. But if you set it at 30 or lower, you would
    get to 79 percent of students with disabilities potentially
    being identified within subgroups in schools.
        That's how we came up with 30. But the idea is that States
    would give their explanation in their State plan, and that
    would be subject to peer review.
        Senator Murphy. How about the second question about the
    accountability regimes? You've allowed for a multitude of
    factors to be built into accountability standards, but I'm
    concerned that there could be States that use standards that
    don't necessarily tell the true story about how students are
    performing.
        For instance, in my State, we've got pretty high graduation
    rates, but we have pretty low proficiency rates in math and
    reading. For instance, 58 percent of African American high
    school students are proficient in reading, and yet they have a
    graduation rate of 80 percent. If you use graduation rates,
    then you're not really seeing the underlying story, in part
    because you've got things like social promotion that pushes
    kids out the door.
        What are the tools at the Department's disposal to make
    sure that these accountability systems are actually capturing
    the true performance of students?
        Secretary King. The statute really gives States the
    responsibility to design their accountability systems, as you
    know, but also says that the academic indicators need to have
    substantial weight and much greater weight than the non-
    academic indicators. We've tried to structure the State plan
    process so that the peers will evaluate whether or not States
    have indeed complied with that substantial weight requirement
    and much greater weight requirement by ensuring that schools
    where students aren't making academic progress continue to get
    the comprehensive support that they need to improve performance
    for students, that schools that are getting targeted support
    because of subgroup under-performance actually see meaningful
    improvement in the academic performance of those subgroups.
        We've tried to balance both State flexibility with civil
    rights guardrails to make sure that States really are paying
    attention to the kids who are most at risk.
        Senator Murphy. I ask these questions to make the committee
    aware there are a lot of us that were very involved in these
    accountability regulations who frankly don't think they go far
    enough. To the extent that in this city you know you've done
    something right when both sides aren't happy, I know there are
    many that think some aspects of the regulations go too far,
    there are many of us who think that they could have gone much
    farther, and I appreciate you taking concerns from both sides.
        Just a last thing, Mr. Chairman. Some of the data that I
    was referring to was in a study called Ensuring Equity in ESSA:
    The Role of N-Size in Subgroup Accountability, from the
    Alliance for Excellence in Education. I ask to enter this into
    the record.
        The Chairman. [Presiding] Thank you. It will be, Senator
    Murphy.
        Senator Murphy. Thank you, Senator.

        [The information referred to can be found in additional
    material, and online at https://www.all4ed.org.]

        The Chairman. Senator Burr

                           Statement of Senator Burr

        Senator Burr. Thank you.
        Mr. Secretary, I'll be brief because of the vote.
        Why does the Federal Department of Education not trust
    local schools to solve problems in their own school systems?
        Secretary King. We do trust State and local flexibility. At
    the same time, we know there's a long history in this country
    of States and districts not----
        Senator Burr. So the fact that we passed legislation that
    reinforced their local flexibility, you don't buy that.
        Secretary King. We think that local flexibility is
    important, but we also think the law importantly preserves
    civil rights guardrails that are essential.
        Senator Burr. Mr. Secretary, have you ever been to a school
    in North Carolina?
        Secretary King. I have visited schools in North Carolina,
    yes.
        Senator Burr. Have you been there since you've been
    Secretary?
        Secretary King. I've not been to a school in North Carolina
    since I've been Secretary, no.
        Senator Burr. You cite in this rule within the proposed
    regulation that you're forcing this new accountability regime
    on 90,000 schools. You point to research done in 2014 by the
    National Bureau of Economic Research on how NCLB accountability
    systems incentivize school label for sanctions improved in
    areas that led to their identification in the State's
    accountability system. That research focused on North Carolina,
    and I took interest in this citation because of North Carolina.
        What your rule doesn't mention in citing that research is
    that the authors of the research explicitly cautioned that
    given the limited breadth of the research finding, ``one should
    not jump to the conclusion that No Child Left Behind-style
    sanctions regimes is an effective way to identify schools in
    need of change.''
        Simple question: Why would you continue to head down this
    destructive path?
        Secretary King. I think our regulations actually preserve
    State and local flexibility, advance State and local
    flexibility within the areas of defining educational excellence
    and defining the interventions in struggling schools. I agree
    that one of the problems in No Child Left Behind was an overly
    prescriptive set of responses to struggles in schools.
        At the same time, we have to make sure that States and
    districts pay attention when their students of color or their
    low-income students or their English learners or their students
    with disabilities are not performing.
        Senator Burr. In your comments back on this rule, have you
    had people supportive of this pathway that you're headed down?
        Secretary King. The proposed accountability regulations
    reflect much of the comment that we have received, and I
    anticipate that we will continue to get comment, particularly
    from parents' organizations, educator organizations, and civil
    rights organizations who worry that in the absence of the civil
    rights guardrails that the law puts in place----
        Senator Burr. I would ask that you share with the committee
    that list of groups that have come out and said they're
    supportive of this pathway.
        I thank the Chair.
        The Chairman. Thank you, Senator Burr.
        Senator Warren.

                          Statement of Senator Warren

        Senator Warren. Thank you, Mr. Chairman.
        Thank you for being here, Secretary King.
        The Department of Education recently released its latest
    Civil Rights Data Collection Report, a survey of American
    public schools that looks at students' access to resources like
    advanced classes that prepare them for college.
        But when I reviewed the data, I'm very concerned by what I
    see. Low-income students and students of color are
    disproportionately attending schools where they simply don't
    have access to the kinds of classes they need for our most
    competitive colleges and universities. I just want to highlight
    one example out of the report. According to your data, the
    clear majority of mostly White high schools offer calculus,
    which makes sense, because it is a prerequisite for most
    colleges. But only a third of mostly Black and Latino high
    schools offer calculus, which means that the kids attending
    two-thirds of mostly Black or Latino high schools are at a
    serious disadvantage in preparing themselves for college.
        Secretary King, can you explain how the Department's
    implementation of ESSA and your proposed regulations will help
    close these critical opportunity gaps for our students?
        Secretary King. Certainly, our hope is that as States
    develop their accountability systems, that they will include
    indicators like access to advanced courses. You're exactly
    right about calculus. We see a similar pattern around
    chemistry, around physics, around access to advanced placement
    and international baccalaureate courses. States have the option
    to include that kind of indicator and then to act on it, we
    hope.
        We also think it's important that States are transparent
    about equitable access to resources, and advanced course work
    could be a part of that.
        We also think this goes to the heart of the supplement, not
    supplant question, that to the extent that schools serving
    high-need students can't offer these courses, it is often bound
    up with a lack of resources, and ensuring that the Federal
    resources are indeed supplemental is essential to making sure
    that kids have equitable access to these opportunities.
        Senator Warren. Thank you very much. I am glad that your
    proposed rules give us better data to shine light on these
    disparities. But we're also going to need to use those data to
    make clear to States that short-changing students based on
    where they live or their family incomes is just unacceptable,
    and I hope you'll continue to deliver the message loud and
    clear as you move forward with the accountability provisions in
    ESSA.
        Now I want to turn to some other troubling data recently
    out of the Department. This time it's on the higher education
    side. New data from the Department's Student Loan Bank show
    that despite the availability of many repayment options to help
    students, we're still facing an avalanche of student loan
    defaults. When a student defaults, the bank hammers them,
    seizing wages, slamming their credit reports. But it seems that
    life isn't so hard for the servicers who get paid to manage
    those loans.
        So here's my question, Secretary King. The Department
    announced a new competition for these servicing contracts, and
    I know you are looking to clean up these deals. Can you tell me
    what you're doing to make sure that the next round of
    negotiations creates some accountability for these companies so
    they actually help families who are struggling instead of just
    fattening their own bottom line?
        Secretary King. Yes. We are developing a new servicer
    contract and a new servicer structure that will involve a
    common platform with multiple servicers providing services
    through that platform. Borrowers will have a single entry point
    where they can get and submit information, but then servicers
    will compete on performance.
        One of the key things that we've done in that servicer
    contract re-compete is built in a set of principles that
    implement the President's Student Bill of Rights, Student
    Borrowers Bill of Rights. Those principles were developed
    jointly with the Treasury Department and CFPB and we think
    represent what good servicing should look like.
        This contract will proceed in several stages: first,
    identification of the platform provider, and then the
    identification of the servicers who will work on that platform.
    But we intend to ensure that servicers do a good job supporting
    students, and better than they've done.
        Senator Warren. Good. I'm very glad to hear this and this
    commitment on your part. Let me put a finer point on this. What
    role should the company's political influence here in Congress
    or their connections to officials inside the Student Loan Bank
    play in the selection process for these servicers?
        Secretary King. None.
        Senator Warren. Good. Thank you.
        Three years ago the head of the Student Loan Bank testified
    in this committee that it was basically impossible to hold one
    of the biggest servicers accountable for breaking the rules
    because they were more or less too big to fail, and this has to
    stop. Past performance matters. If the Department grants
    another massive new contract to a company with a track record
    of harming students and members of the military, or if the
    company is facing State AG and Federal lawsuit investigations,
    then I think that's a serious problem. I know that you want
    real reform, and that means holding these student loan
    servicers accountable. I know that those companies have a lot
    of lobbyists right here on Capitol Hill, but the families and
    the students don't, and they need you.
        Secretary King. Absolutely.
        Senator Warren. Thank you.
        Thank you, Mr. Chairman.
        The Chairman. Thank you, Senator Warren.
        Senator Isakson.

                          Statement of Senator Isakson

        Senator Isakson. Thank you, Chairman Alexander, and thank
    you for your great work on ESSA, and thank you for calling in
    advance and asking what I was going to ask you so you had a
    week to prepare.
        No. 1, I'm married to an IDEA teacher, speech and hearing,
    who worked with special education for years, have always had a
    quarrel with the 1 percent cap on cognitive disability for
    assessment purposes because I believe that the IEP ought to be
    required for every student in America's schools to determine
    the best educational plan given their ability, both exceedingly
    good or exceedingly bad.
        With that said, what are you doing to help ensure that kids
    are identified for IDEA purposes in terms of their education,
    and what are you doing to give us the flexibility necessary to
    see to it a kid can be assessed on the mechanism that's best
    for their intellectual capability?
        Secretary King. This was one of the topics that was part of
    the negotiated rulemaking, and consensus was reached on the
    structure both for the requirements for the 1 percent cap and
    also the waiver process for the 1 percent cap. That consensus
    reflects the principle that we believe that all students with
    the right supports and accommodations can ultimately succeed,
    except there is an important need to pay attention to the needs
    of those with severe cognitive disabilities who may be unable
    to achieve at the same level.
        So the negotiators tried to strike the right balance in
    both defining the cap and defining the requirements for the
    waiver.
        Senator Isakson. I want to yield in favor of the child
    every single time with a disability. We need to make sure
    they're getting the appropriate assessment, and the arbitrary
    cap by government is not the right way to run that program.
        Second, on what Ms. Warren was asking, Senator Warren was
    asking a minute ago, aren't all student loans now direct loans
    from the government?
        Secretary King. There are student loans that are taken
    through private lenders, but within the direct loan program
    we've tried to put in place repayment options that we think
    will help address some of the default problems that we have by
    allowing folks to cap the percentage of their income that goes
    to student loan repayment at 10 percent of their income.
        Senator Isakson. The service agents are agents for the
    government, are they not?
        Secretary King. The servicers do work for us under
    contract, and unfortunately I think historically those
    contracts have not built in all the borrower protections that
    they should have, and we intend to ensure that they do going
    forward.
        Senator Isakson. That would be our fault, not the
    servicer's fault. Is that not correct?
        Secretary King. At the end of the day, the servicers also
    have a responsibility to not try to read the contract to find
    loopholes to provide less than adequate service to students.
    And rather than focus on where we've been, we're focused on
    going forward and ensuring that the contracts build in the
    right protections for students.
        Senator Isakson. The point I want to get to is this. One of
    the biggest things we need to do in education is teach our kids
    how to be responsible in managing their own money and learning
    the life skills that are necessary. Student loans are a good
    way for us to do that. I think the more we focus on teaching
    our students to borrow what they can repay and to understand
    repayment is an obligation, not just a promise, we'll be a lot
    better off. I just wanted to throw that in real quickly.
        On the 95 percent assessment threshold--are you familiar
    with what I'm talking about?
        Secretary King. Yes.
        Senator Isakson. We gave a lot of flexibility to the
    systems, and I gave them a lot of flexibility to allow
    students' parents to opt their child out of an assessment. Are
    you familiar with that provision?
        Secretary King. I am.
        Senator Isakson. It's possible because of opt out and other
    anomalies that may happen, the system may fall below 95
    percent. Is that not correct?
        Secretary King. Both NCLB and the Every Student Succeeds
    Act have a requirement that States would assess all students,
    and ESSA, as you know, has a specific requirement for State
    action when the participation falls below 95 percent.
        Senator Isakson. That's my point. The 95 percent is a goal,
    and the State has the responsibility, if the State doesn't meet
    that goal, to execute a plan to get to that point. Is that not
    correct?
        Secretary King. In our regulations, we provide a set of
    options for States, including a State-determined option for how
    they would address being under the 95 percent participation,
    and ultimately getting to the all-student participation that's
    required by the statute.
        Senator Isakson. Are you sure they're options, or are they
    mandates?
        Secretary King. They're a set of options, including a
    State-determined option.
        Senator Isakson. Because I think our intention--Secretary
    Alexander, Chairman Alexander now, past Secretary Alexander,
    tried to get us to do, and we did a very good job of it,
    setting goals but leaving the administration, the punishment,
    the calculation and the goals, or the mechanisms to achieve
    those goals to the States, not to the Federal Government.
        Secretary King. This is a place where there will be State
    options, and the States would describe which option they had
    chosen in their State plan that would be subject to peer
    review.
        Senator Isakson. I think the point is it's very important
    that we carry out not only the letter of the law but the spirit
    of the law, and the spirit of that law was to leave the
    determination to the local board of education or the State
    wherever possible to achieve and meet those goals.
        Thank you, Mr. Chairman.
        The Chairman. Thanks.
        Mr. Secretary, I don't usually do this on the way to
    Senator Franken, but you have no authority in the law to
    prescribe specific options. That's the job of the Congress, and
    that's something we need to talk about as we go along. None
    whatsoever.
        Secretary King. Just to be clear----
        The Chairman. None whatsoever.
        Secretary King [continuing]. We describe options, and then
    States choose, including----
        The Chairman. But you do not have the authority to define
    what options States may choose. The State has the specific
    authority and flexibility under the law to do that. That's what
    No Child Left Behind kept doing, and that's what the problem is
    with this rule.
        Secretary King. One of the options is the State defines
    exactly what they will do, and then that is part of their State
    plan. So just to be clear, although we describe options, the
    State is determining their approach entirely.
        The Chairman. That's helpful. Thank you for allowing me to
    clear that up.
        Senator Franken.

                          Statement of Senator Franken

        Senator Franken. Thank you, Mr. Chairman.
        I want to talk about something that is of particular
    interest to me and that I was very glad we were able to get
    into ESSA, which is making sure that foster kids can stay in
    their school when they change foster parents. We had testimony,
    I think it was back in 2010, of a young lady named McKayla from
    Minnesota who ended up going to Hamlin and has done very well,
    a very impressive young lady. She had missed 4th grade entirely
    when she changed parents. These kids, foster kids, have 10, 11
    foster parents, routinely, and very often the only constant in
    their life is their school.
        What has been going on is the kids who have a favorite
    subject, a teacher, an activity in their school that is the
    biggest constant in their life, friends, for goodness sake, in
    a school, suddenly change foster parents and they are forced to
    go to a different school. Everyone sort of agreed finally, we
    got this done. So basically the way we wrote it in ESSA is the
    school district and the public welfare agencies have to figure
    out how to pay for transportation. If the kid is moved outside
    the school district to get to school, somebody has to pay.
        In your proposed regulation, school districts are
    ultimately responsible for providing and funding transportation
    for foster kids to their school of origin. Since it's the
    comment period on that regulation, I'd like to comment, and I'd
    rather you go with your guidance, because your guidance does
    not specify who is ultimately responsible. I'd like the school
    and the public welfare agencies in the State to be working
    together on this. I want to eliminate any kind of barrier to
    this happening. This makes such a difference to these kids, and
    these kids deserve to stay in their school. That's my comment.
        Secretary King. I appreciate that. We share the commitment
    around educational stability for foster youth, because kids are
    moving between schools is often the reason that kids miss
    school, do not make the academic progress they need to, are
    retained in grade, drop out.
        What we try to do in the guidance is say that the child
    welfare agencies and the school districts should be working
    together, and we offer examples of best practice around the
    country, including best practice around dispute resolution when
    the child welfare agency and the LEA have different
    perspectives. It is true that in the regulations we try to
    offer a path for how those disputes would ultimately be
    resolved around transportation costs. But, yes, we are taking
    comment and we will consider all comment, including yours.
        Senator Franken. Thank you for including my comment. I'm a
    Senator. My goodness, I think all of you should be insulted.
        [Laughter.]
        I want to talk about something else that I worked for to
    get into this bill. Given that one in five youth between the
    ages of 13 to 18 have or will have a serious mental illness, I
    firmly believe that mental health is one of our country's most
    pressing unmet needs. I'm proud of the work that we've been
    able to accomplish on mental health, but we have a long way to
    go.
        In ESSA, we include provisions that I've long championed to
    increase mental health services in schools. That's why I was
    very disappointed that the spending bill that passed out of the
    Senate Appropriations Committee did not provide adequate
    funding for ESSA student support and academic enrichment
    grants, which includes my mental health provisions and other
    critical programs that Americans really care about. That's
    really something that parents care about, and the schools care
    about, and I'm hopeful that we can increase the funding once
    this bill comes to the floor.
        My question is what can the Department of Education do to
    support school districts that are trying to expand mental
    health services at the local level? Because I've seen this work
    in school districts that do this. I've had roundtables with
    parents who say it has changed their family, it has changed
    their kid's life, it has changed them.
        Secretary King. Yes. We share your disappointment with the
    proposed funding level for title IV. Certainly, the President
    proposed a significant increase around title IV, $222 million
    in additional funding for title IV, because we'd like to see
    more access to mental health services, among other elements
    that are addressed in title IV.
        We issued joint guidance earlier this year with Health and
    Human Services to help guide schools and districts on how they
    could take advantage of the Affordable Care Act to support
    school-based mental health services. We think there are
    existing dollars under ACA and Medicaid that could be used to
    support school-based mental health services, and we offer some
    examples of best practices in that joint guidance.
        We also, through our Promise Neighborhood Grant program,
    are supporting efforts to match schools with community-based
    organizations and community-based health providers to try to
    get those mental health services to kids and to families,
    because often mental health issues in the family have an impact
    on children as well.
        I share your commitment and would love to see the title IV
    funding higher.
        Senator Franken. OK, thank you.
        Thank you, Mr. Chairman, and I hope that my colleagues
    share this commitment to mental health in schools so that we
    can maybe get a little bit more funding for that.
        The Chairman. Thank you, Senator Franken.
        Senator Roberts.

                          Statement of Senator Roberts

        Senator Roberts. Thank you, Mr. Chairman.
        As the distinguished chairman of the committee has said
    many times, the bill which we passed last year to reauthorize
    ESEA restores responsibility to States for their local schools
    by providing increased flexibility to design and implement
    their education programs. The key word here is ``local.'' I'm
    very proud the bill includes my language to permanently end the
    Federal Government's ability to use any incentive or tool or
    coercion to force States to adopt Common Core. If they want
    Common Core, fine. If they don't, that's the intent.
        In fact, just to be absolutely clear, here's what my
    language says:

              ``No officer or employee of the Federal Government,
            including the Secretary, shall attempt to influence,
            condition, incentivize, or coerce State adoption of the
            Common Core State standards, or any other academic
            standards common to a significant number of States or
            assessments tied to such standards.''

        Here's the problem. A high-ranking education leader in
    Kansas recently pointed out to me--and the fact that he wants
    to be anonymous is rather telling--

              ``It is not, in our opinion, that the new ESSA law,
            based on the current version of the proposed
            regulations, is giving States flexibility around
            developing a rigorous and accountable model. It appears
            that, once again we can only build something as long as
            it meets a strict Federal requirement.''

        That certainly sounds like, to me at least, that the
    Department of Education is not following the spirit and intent
    of the Every Student Succeeds Act. As everyone is aware, ESSA
    has countless prohibitions explicitly stating that the Federal
    Government is prohibited from mandating, directing,
    controlling, coercing, or exercising any direction or
    supervision over academic standards that States develop or
    adopt, including Common Core State standards. The
    Administration is prohibited from influencing, incentivizing,
    or coercing States or school districts to adopt any specific
    academic standards.
        Mr. Secretary, I would like specifically to bring your
    attention to Section 1005(b) of the Act, which states that,

              ``States shall provide an assurance''--a-s-s-u-r-a-n-
            c-e--``assurance that the State has adopted challenging
            academic content standards.'' Let me repeat that. A
            State shall only provide an assurance that they have
            adopted academic standards.

        Turning to proposed regulation 29916, which addresses the
    State plan requirements for challenging academic standards and
    academic assessments, this section would require each State
    education agency to provide evidence, evidence demonstrating
    that it has adopted changing academic content standards and
    aligned academic achievement standards.
        My question: What is the evidence for? Who is the judge?
    Where is it going? What Federal involvement or requirement has
    now been reinstated regarding academic standards? This, to me,
    is an example of the Department of Education trying to
    influence State academic standards once again, and it is also
    contrary to your commitment to me with respect to the intent,
    as well as the explicit prohibitions in the law, during your
    nomination hearing. In my view, there is obviously a big
    difference between providing an assurance and providing
    evidence. This proposed regulation eviscerates the intent of
    Congress and ESSA.
        Mr. Secretary, would you please explain what I think is a
    blatant violation of numerous prohibitions, and also the ESSA
    statute, that clearly says a State need only to provide an
    assurance that they have adopted academic standards, not
    evidence, to somebody within the dusty Common Core halls of the
    Department of Education?
        Secretary King. Let me say as clearly as possible that
    standards are determined by States. The law is clear on that
    point. We are clear on that point. I've been clear on that
    point, as you said, in our prior conversations.
        The law also requires a process for ensuring that States
    have an assessment system that has been through peer review and
    that is fair to students and reliable. As part of that process,
    States provide evidence to peer reviewers, other States, and
    experts on assessment who participate in a process to ensure
    that the State has gone through a rigorous and reliable process
    of matching their standards to their assessments. And as part
    of that process, that peer review process, which is underway--
    --
        Senator Roberts. We're doing a two-step here, not a one-
    step.
        Secretary King. This is unrelated to the content of the
    standard.
        Senator Roberts [continuing]. The box and say we are
    assuring you that we're doing that with regards to your
    standards that are probably in writing so that they can
    understand what they are. But you're saying that there is a
    secondary step that they're going through with a whole bunch of
    folks who have to then say, OK, we are providing evidence. I
    don't know what that evidence is. I don't know what it means.
    Is it a lot of paperwork? Is it a rigorous test? What is it?
        Secretary King. The longstanding peer review process
    required under NCLB is still in place under ESSA, a peer review
    process to ensure that the assessment system that a State
    develops is a valid one. And as part of that process, the peer
    reviewers----
        Senator Roberts. Who are the peer reviewers?
        Secretary King. Those are other States and would include
    experts on assessment who would participate in the peer review
    process.
        Senator Roberts. What, the big 12? What are we doing here?
        Secretary King. These would be folks who work in other
    States and have worked on assessment systems across States who
    try to ensure that the assessments fairly reflect the law, are
    consistent with the law. So what States are doing is providing
    evidence of a process by which they have aligned their
    assessments with their standards.
        Senator Roberts. But we said assurance. We said assurance.
    We didn't say--this is two different things. Now you've got
    peer review folks. Perhaps they're helpful. But again, they
    could just check the box with assurance, as opposed to
    providing evidence to--I don't know how many peer review groups
    you're talking about. But it seems to me we're going to have to
    have some further discussion about this, without any question.
    I appreciate your response.
        Secretary King. And we are open to feedback on how we can
    make absolutely clear in the regulations that standards are set
    by States. That is clearly a shared commitment.
        Senator Roberts. I think that there's a peer review for my
    distinguished colleague from Massachusetts. In Kansas, perhaps
    that would not be received with open arms, and probably from
    Kansas to Massachusetts would be the same thing. I apologize to
    my colleague.
        The Chairman. Thank you, Senator Roberts.
        Senator Bennet.

                          Statement of Senator Bennet

        Senator Bennet. Thank you, Mr. Chairman. Thank you very
    much for holding this hearing.
        Mr. Secretary, it's great to see you again. Thank you for
    your leadership.
        In Colorado last week a bunch of folks came together and
    had an ESSA summit there. There's a lot of excitement about the
    possibility of now being out from under No Child Left Behind.
    We're having conversations about how we use that flexibility,
    at the same time make sure we've got the rigor that's needed. I
    know you yourself were a former principal of a school.
        I wonder whether you could talk about what the Department
    is doing to ensure that the voices and the knowledge of the
    people that are working in our schools, our teachers and our
    principals, are being involved in ESSA implementation around
    the country.
        Secretary King. Thanks. That's been a priority for us, and
    also a priority that we have communicated to States around
    their process. We've held over 200 meetings around the country
    with educators, with parents, with community leaders as we've
    worked to develop regulations and guidance, and received
    comments from over 700 individuals and organizations.
        At the State level we put out a Dear Colleague letter just
    last week to States laying out recommendations and best
    practices around stakeholder engagement. I think lots of States
    are doing a good job on this, but we worry some aren't. Some
    haven't worked with their districts to make sure that teachers
    or principals, for example, can get release time so that they
    can participate in this process. Some States have been slower
    than others to engage tribal leaders and civil rights
    organizations. We've been encouraging folks around the Council
    of Chief State School Officers, put out a guide to stakeholder
    engagement that they developed with a number of organizations,
    including civil rights organizations, and we've made clear in
    the regulations stakeholder engagement throughout the process
    is required.
        Senator Bennet. One of the things that is certainly true of
    the change in the law is that we have devolved the
    responsibility for implementation back to the States in a
    fairly significant way. How do you expect over time we're going
    to be able to identify those places where they really are
    setting a rigorous standard for kids and demanding that
    standard for kids in places where it's a less rigorous
    standard, and what do you expect the conversation to be like?
        Secretary King. I think there are a number of protections
    around that. One is the peer review process at the outset that
    I was just talking with Senator Roberts about. There's also the
    transparency requirements that I think will help us understand
    where subgroups are not performing, and we'll be able to see
    are States making progress there.
        But one of the things the Department is going to need to be
    vigilant about is the law provides a lot of flexibility for
    States around how to intervene in schools that are struggling
    or schools with low graduation rates or schools with struggling
    subgroups, but we've got to make sure that those interventions
    actually translate into progress and that States respond when
    that progress isn't made.
        Senator Bennet. Could you talk also a little bit--it's
    often been said up here that this law is a civil rights law,
    and I agree with that. I think there's not really any other
    reason for the Federal Government to be involved in education
    other than that at the K-12 level. Could you talk about what
    you're doing, the Department is doing to ensure that as we go
    forward that spirit is maintained, and the commitment to equity
    that I think everybody up here shares to one degree or another
    is also maintained?
        Secretary King. Yes. We tried throughout the accountability
    regulations to preserve the important civil rights guardrails,
    making clear that States need to provide disaggregated data for
    all subgroups, not just at the summative level but for each of
    the accountability indicators that they put in place; that
    States need to have a clear process in place for identifying
    schools that have consistently underperforming subgroups, and
    then have meaningful intervention in those schools to improve
    subgroup performance; that there's clear data disaggregation
    around equitable access to resources so that we can ensure that
    schools are providing opportunity on an equitable basis to our
    students of color, our low-income students, our English
    learners, our students with disabilities.
        This work is going to require continued vigilance on the
    part not only of the Federal Government but of States and
    districts to make sure that we don't let kids fall through the
    cracks.
        Senator Bennet. My time is almost up, Mr. Secretary. I
    wanted to get in one last question. There are no more Federal
    models for escalating consequences as there were in No Child
    Left Behind. That's now left to the States and local districts
    to figure out, to research and design these, and I just wonder
    whether you've thought that through a little bit, about how
    people are going to have the research they need in order to
    implement targeted school improvement strategies in this new
    world.
        Secretary King. Yes. It's very important that folks do that
    informed by evidence about what works, and certainly in efforts
    like the Education Innovation and Research Fund, the work of
    IES will help to provide that evidence base. We try in the
    regulations to talk about how States can, as they move
    progressively forward in more intense interventions if schools
    aren't making progress, they need to rely on stronger evidence
    of effectiveness as they move through those levels of
    intervention, because we do have some good evidence around
    interventions that work. We know that in schools with
    struggling English learners, professional development for
    teachers around working with English learners using dual
    language strategies has a strong evidence base, and we want to
    make sure that folks are thinking about that as they plan their
    interventions.
        Senator Bennet. Thank you, Mr. Secretary.
        Thank you, Mr. Chairman.
        The Chairman. Thank you, Senator Bennet.
        Senator Collins.

                          Statement of Senator Collins

        Senator Collins. Thank you, Mr. Chairman. Mr. Chairman, as
    I've listened to the debate at this hearing today, I am
    reminded of a provision that I wrote that was included in the
    Dodd-Frank Act that was known as the Collins Amendment. I had a
    longstanding battle with Federal regulators on the
    implementation of that amendment, and finally the Banking
    Committee actually held a hearing on what was the intent of the
    Collins Amendment. And needless to say, I was the lead-off
    witness. I started off by pointing out that I was Collins, I am
    Collins, I'm still around, and I know what my intent is.
        I would say to you, Mr. Secretary, hearing the debate
    today, that Senator Alexander and Senator Murray, who are the
    authors of this rewrite of the Elementary and Secondary
    Education Act, are still here. They know what their intent is.
    They were careful in drafting the bill. And that's why there is
    this frustration that many of us are feeling.
        I want to talk about the reporting requirements that are
    included in your proposed regulations. I think all of us can
    agree that transparency is essential, but reporting
    requirements should not be so onerous that small school systems
    in rural States have difficulty in complying unless they are
    specifically authorized by the Every Student Succeeds Act. We
    want to make sure the reporting requirements give parents and
    communities the information about their State accountability
    systems, but the proposed regulations establish many more
    reporting requirements than required by the law.
        They include, among other things, how States calculate and
    report data on the report cards, additional data for charter
    school students, and procedures for calculating reporting
    district and school expenditures.
        Two questions. Can you point to specific authority in ESSA
    that you believe allows the Department to propose these
    additional reporting requirements, which appear to me to be
    contrary to the intent of the law? And second, how does the
    Department square these additional reporting requirements with
    the mandate in the law that report cards be concise,
    understandable, and accessible?
        Secretary King. We believe the reporting requirements in
    the draft regulations are consistent with the statute. We
    certainly are open to feedback on the reporting requirements,
    as we are to the entire regulation, look forward to feedback
    from stakeholders. There are places in the statute where, in
    order to fulfill the requirement of the statute, additional
    data will be necessary for States. But again, we are open to
    feedback on the proposed regulations, and if there are places
    where folks think there is already, for example, an existing
    data report that addresses something, we're open to
    consolidating those. So this is a place where we look forward
    to stakeholder feedback.
        Senator Collins. To me it's obvious in the law what is
    required, so I hope you'll take a look.
        I want to second the comments made by the Chairman about
    the summative rating from three rating categories for each
    school. The Act requires that States evaluate their schools on
    academic and non-academic factors, but it does not require that
    each school be given a single rating. So, here we go. We seem
    to be going in the proposed regulations away from the new
    innovative educational approaches in favor of maintaining the
    status quo and the inflexible requirements of No Child Left
    Behind that were discouraging to teachers, to parents, to
    administrators, and students alike.
        How does a summative rating, which essentially reduces a
    school to a single number or letter grade, support the goal of
    State flexibility, which was a fundamental premise of the
    rewrite of this law?
        Secretary King. The summative rating language in the
    regulation does not require the use of a letter grade or a
    numerical index. A State could use those, but a State could
    also use a categorical system consistent with the statute. The
    statute requires that States identify schools for comprehensive
    support, that States identify schools for targeted support, and
    then there will be schools that are in neither of those
    categories. The statute envisions a categorical system, at a
    minimum. That's consistent with our summative rating approach.
        Also, to identify the bottom 5 percent of schools that will
    get that comprehensive support, States will need to have a
    methodology to identify those schools that will require
    relative comparison of school performance, exactly what's
    intended by the summative rating language.
        We think that the summative rating is exactly consistent
    with the statute.
        Senator Collins. I would beg to differ, but my time has
    expired.
        The Chairman. Thank you, Senator Collins.
        Senator Casey.

                           Statement of Senator Casey

        Senator Casey. Thank you, Mr. Chairman.
        Mr. Secretary, thanks for being here today and for your
    testimony. We all want to make sure that we're making the right
    investments and making the right decisions with regard to
    children. I've often said that if kids learn more now, they'll
    earn more later, and that's not just a rhyme, it's literally
    the truth. We know that. That starts certainly with great
    teachers at the core of that process of learning more so they
    can earn more later.
        I want to ask you two basic questions about teachers. First
    on the question of professional development, we know that in
    ESSA part of my legislation, the so-called BEST Act, was
    included to make sure that States and districts, school
    districts, implement evidence-based activities to strengthen
    the teaching profession and keep great teachers in the
    classroom.
        Could you describe the work that your Department is doing
    to support districts in providing effective professional
    development? And then I have a second question about teachers.
        Secretary King. Yes. We certainly believe professional
    development can be key to improving academic outcomes, and also
    improving teachers' ability to serve particularly at-risk
    populations of students, English learners, students with
    disabilities. We plan to issue guidance on title II, and we
    have some examples of best practice around the use of title II
    dollars to support high-quality professional development. We
    also are supporting States as they implement their equity plans
    around equitable access to effective teaching. Many of those
    equity plans rely heavily on quality professional development.
        We also have a number of professional development programs
    that are part of the Education Innovation and Research, or i3
    program, and as those evaluations come back, we will have even
    a broader evidence base around effective professional
    development strategies that States and districts will be able
    to access.
        Senator Casey. I appreciate that because we can't seek to
    have great teachers in classrooms if we don't have great
    professional development.
        I wanted to ask you as well--it's an issue that I think
    Senator Bennet raised earlier, and I want to expand upon it a
    little bit. This question of engagement by stakeholders, which
    is always the intent that we have educators, teachers, and
    other education professionals, parents and community leaders
    involved, and I know there's been a fairly robust and
    significant engagement. But I wanted you to give us a sense of
    how do you measure that, how do you demonstrate that there's
    been that kind of engagement, because I know that you sent a
    letter to State leaders highlighting the importance of that
    kind of engagement. I know and I would applaud what Senator
    Murray and Representative Scott have done in raising this
    issue. But I want to get your sense of where we are with
    engaging all of those critically important stakeholders.
        Secretary King. Yes. There are some encouraging signs. The
    Council of Chief State School Officers issued a guide to
    stakeholder engagement, pointing out best practices, and they
    did that in partnership with over 30 organizations, civil
    rights organizations, educator organizations. I think that was
    an important step, an important resource for States.
        As I've talked with State chiefs, I've heard about efforts
    to do statewide tours, to hold public hearings, the effort to
    reach out to tribal leaders and civil rights organizations,
    parent groups, particularly parents of students who have been
    historically underserved, like students with disabilities and
    English learners.
        But there is certainly a range, and one of the reasons we
    issued the Dear Colleague letter is because of a concern that
    in some States they've been slower to do that stakeholder
    engagement, and in some States they've had a challenge around
    teachers and principals in particular getting the time that
    they need, the release time from their districts to participate
    in these activities. We wanted to try to encourage States to be
    very active in getting their districts to make sure educators
    can participate fully.
        We also in the regulations set out a requirement for
    frequent, consistent engagement of stakeholders. I think the
    success of the law is partly bound up with how effectively
    States mobilize a diverse cross-section of stakeholders in this
    work.
        Senator Casey. I appreciate that. We just want to hear all
    those voices, especially the voices of educators.
        I'll submit for the record a question on the work on
    suspensions and expulsions, trying to reduce the use of those
    practices. We'll submit that in writing. Thanks very much.
        Secretary King. Thank you.
        The Chairman. Thank you, Senator Casey.
        Senator Murkowski.

                         Statement of Senator Murkowski

        Senator Murkowski. Thank you, Mr. Chairman.
        Secretary, I wanted to followup from a conversation that we
    had last time you were before the committee, and that relates
    to the cancellation in the State of Alaska of the Alaska
    Measures of Progress, the AMP assessment. As you know, we were
    compelled to cancel that statewide assessment because we had
    significant widespread, totally unexplained and unfixed
    technical problems that prevented students from being able to
    complete the AMP, a lot of frustration there, as I mentioned to
    you. You received a letter last week that outlines the Federal
    law requires assessments to provide valid, reliable data that
    informs instruction, and it has to be of adequate technical
    quality and consistent with national recognized testing
    standards.
        The State Department of Education has requested a waiver
    from the requirement to assess during the 2015-16 school year.
    The question to you this morning is will you approve the
    State's waiver?
        Secretary King. As you know, we've been in close
    communication with leadership in Alaska. I think we're awaiting
    the submission of some materials describing some of what took
    place as part of their waiver application. We will certainly
    review those when they come in.
        Senator Murkowski. How much time do you figure you're going
    to need to make this determination? Because this is obviously
    very, very important to the State of Alaska.
        Secretary King. Yes. In the past in these situations it's
    been a matter of weeks that we've needed to review the material
    submitted by the State, including the State's plan to make sure
    that they have a system in place to ensure that they're----
        Senator Murkowski. You've had it for some time now, but
    you're saying that you're requiring additional information from
    the State?
        Secretary King. We can followup on the details. I know
    there's information that we are awaiting from the State on the
    events that occurred, and also their plans to ensure that next
    year they'll be able to implement assessments consistent with
    the law.
        Senator Murkowski. As we've had the conversation, it's not
    as if they want to avoid assessment. But again, when you have
    things totally beyond your control, when Kansas basically goes
    dark, if you will, and you cannot complete the testing, it
    really is a situation that calls out for review and for waiver.
    So we would ask you to move on that very quickly.
        You have indicated that you are waiting for some
    information from the State. I am still waiting for some
    information from your offices. When you were before the
    committee in April, you committed to make sure that my office
    was looped in as the Department and the State worked through
    the assessment vendor. I'm told that we are still waiting for
    answers to some 13 different questions that we sent to you. Can
    you commit to me that you will get these questions answered to
    me by the end of the week? Can you look into that for me?
        Secretary King. I can certainly look into it. I don't know
    if some of the answers to those questions are tied to the
    materials that we're awaiting, but certainly I can followup
    with you on that.
        Senator Murkowski. I would like your diligence on that. I
    appreciate it.
        I would ask you about a proposal--this is this diversity
    proposal, or diversity priority, excuse me, that you have
    proposed to add for all of the Department's K-12 and post-
    secondary competitive grants. This priority would require all
    applicants to seek to increase schools' racial and
    socioeconomic diversity, and I understand that schools and
    campuses can satisfy the requirement by investigating the
    barriers to diversity, changing school assignment policies,
    creating or expanding school choice, or changing how funds are
    allocated to schools. I think we would all recognize that
    increasing diversity in our schools is a worthy goal. I also
    understand the concerns about outcomes of students that are
    enrolled in some of our Nation's very high-poverty schools.
        We've got a different situation in Alaska, and I hope that
    you recognize that we have some very, very isolated regions in
    the State. These are regions that are bigger than most other
    States. Poverty is high. The population in most of these is
    almost entirely Alaska Native. There are no roads. Eighty
    percent of the communities in Alaska are not accessible by
    road. Oftentimes where you do have roads, it's very dangerous
    to transit in the winter.
        We know the barriers. We know the barriers very well. Many
    of the schools are barely able to sustain a K-12 school, so
    school choice is not an issue here. Then allocating funds is
    not going to change the facts on the ground. It is still a very
    small school, very isolated, geographically islanded.
        The proposal, as we look at it, could essentially prevent
    many, many rural Alaskan school districts, and even some of the
    University of Alaska campuses, from qualifying for any
    competitive grants from the Department. Of course, these are
    just exactly the grants that are designed to help the schools
    serve these students better.
        I would ask if you would look at this proposal and either
    redraft it so that schools in places like Alaska that are so
    remote and so unique are either exempt from this proposal or
    rescind it altogether. I think it is an issue where, again, we
    can't change the facts on the ground. We can't move that
    village into a place where it's on a road system. What do I do?
        Secretary King. That's understood. This priority would be
    one that would not be automatically applied to all grant
    programs. The inclusion of the----
        Senator Murkowski. But then wouldn't we be left out of
    funding opportunities?
        Secretary King. As we develop grant programs, this is one
    of the considerations that we would have, whether it is
    feasible for all of the grant applicants to pursue this
    particular priority. Many of our grants, as you know, have
    priorities around serving rural schools and rural communities.
    We would certainly take into account issues of geographic
    isolation as we assemble a grant application.
        Senator Murkowski. OK. I've raised it to you, and I would
    ask for your due consideration, either that Alaska be exempt as
    other States that are similarly situated or, again, redrafting.
    But if you could look at that, I would appreciate it.
        Thank you, Mr. Chairman.
        Thank you, Mr. Secretary.
        The Chairman. Thank you, Senator Murkowski.
        Senator Whitehouse.

                        Statement of Senator Whitehouse

        Senator Whitehouse. Thanks, Chairman.
        Thank you, Secretary King. Two topics from me.
        One, as you know, there was a middle schools element in
    ESSA. We understand that you do not intend to propose any
    regulations in that area. We are working with the middle
    schools groups to try to get a consolidated view that we can
    work with you on for guidance, a letter of guidance with
    respect to the middle school requirements. That's a preview of
    coming attractions, and I'm not going to hold you to anything
    until we've done our homework with the middle school groups.
        The second issue has to do with the provision of the bill
    related to innovation schools. As you know, if you are a very,
    very big, fancy foundation with a lot of money and you have an
    innovation idea, you have a very strong capacity to push that
    idea into and through the multiple layers of education
    bureaucracy. The concern that led to the innovation schools
    element in the bill was that if you're a school and you want to
    innovate in a certain way and you don't have a foundation or
    some big group that has adopted you, you just want to do what
    you think is best for the kids, you look out at multiple layers
    of forest. You look out first at the layer of forest of the
    municipal education oversight, then if you can get through
    that, then there's the second layer of the State education
    oversight apparatus, and how am I going to be able to get
    through that? If you can get through both of those, then
    there's the third problem of what do you do with the Federal
    education oversight apparatus.
        My concern was that unless there was a path of some kind
    that was illuminated through those forests, we lost an enormous
    amount of innovation from journeys that were never begun
    because at the very get-go, at the principal level of the
    school level, they took a look at the multiple-layered
    bureaucratic forest in front of them and said, you know what,
    not worth our effort, I have no idea how this could possibly
    turn out in our favor.
        To me at least, and to the groups that worked with me on
    this, to be able to move innovation out of just big
    intellectual centers and foundations and so forth and actually
    have it happen in schools is a really important thing. I wasn't
    in the conference, and so I can't vouch for what happened to
    this in conference. You and I have talked about what I've been
    told about who was the adversary of this provision in
    conference, but I would very much like to hear from you now as
    you look at the innovation schools piece what your intentions
    are, how seriously you think you take this, and whether you
    think there actually is a role for innovation at the school
    developed level rather than waiting around for big foundations
    to be the champions.
        Secretary King. Yes.
        Senator Whitehouse. And they're great, by the way. I've got
    nothing against the big foundations. They're important
    champions. I just don't think they're the only ones.
        Secretary King. That's right. First on middle schools, let
    me say I share your commitment on middle schools. I was a
    middle school principal. Now I'm a middle school parent. I
    think middle schools have a crucial role to play in students'
    long-term success, so I look forward to working together on
    that.
        On the innovation schools, I think the way that ESSA and
    the regulations work together creates significantly more space
    for school-based innovation, and we've been careful to think
    about that as we've been drafting the regulations. Certainly
    eliminating the one-size-fits-all school intervention approach
    of No Child Left Behind I think creates a lot of new space for
    States and districts to innovate in those schools that need to
    improve their performance.
        Senator Whitehouse. That obviously only applies to schools
    that have fallen into that pit and now need to try to extricate
    themselves. For a school that's performing relatively well but
    simply wants to do something innovative, unless you can tell me
    something else, you do need a path like the innovation schools
    pathway because at the local school level they have no way of
    knowing, nor do they have the administrative resources to
    attempt how they'd get through that multiple set of
    bureaucratic obstacles, hurdles and approvals all required in
    front of them.
        Secretary King. I think the way we've approached the
    regulations creates quite a bit of space in terms of the
    Federal role. There's no obstacle in the regulations to States
    creating a similar path through some of the existing State
    constraints. But I'm certainly happy to continue to talk about
    ways that we can encourage that.
        Senator Whitehouse. The principle of this is that there can
    be a process of alignment where the municipality, the Federal
    Government agrees that it will step out and let innovation
    happen if the State and the municipality have all done the same
    thing, and if certain requirements have been met at the school
    level from the get-go to show that this is a community-
    supported, stakeholder-supported, teacher-supported, well-
    developed effort. To say that we're not going to stop the State
    government from doing it is a little bit different than saying
    we'll accept that there should be a path that is lit for
    schools that want to do this so that they can know that if they
    follow this path, they can get to a result rather than just,
    like I said, a lot of these journeys were never begun, and who
    knows what the price was for the children from the journeys
    never begun?
        Secretary King. I think that's right, and this is the
    spirit behind our Teach to Lead work, where we've worked all
    over the country to bring together teacher leaders to develop
    innovative projects in their schools and districts. Certainly
    as we think about the guidance we'll put out around title II,
    we will highlight the kinds of flexibility at the State and
    local level that have helped those Teach to Lead projects to
    thrive.
        But certainly I'm open to continuing to talk about ways
    that we can further encourage that kind of State and local
    space for innovation. It's a shared commitment.
        Senator Whitehouse. Thank you, Chairman.
        The Chairman. Thank you, Senator Whitehouse.
        Senator Murray, do you have any concluding remarks?
        Senator Murray. Thank you, Mr. Chairman. I just want to
    comment on the summative rating, and you answered the question.
    I know there's been some discussion about that.
        Under our bill, States are actually required to develop
    accountability systems that hold schools accountable using
    multiple measures to judge school performance. States are
    required to do that because we wanted to make sure that we have
    better information to help States determine which schools are
    high performing and which ones need supporting, and to provide
    that information to parents as well. The bill also requires
    States to identify their lowest performing 5 percent of
    schools, high schools with graduation rates at or below 67
    percent, and schools with consistently underperforming
    subgroups. I did want to just clarify that.
        I do appreciate your response to that. I think we want to
    make sure this bill works. We want to make sure parents have
    information, schools have information, and the resources flow
    in the direction that we need them to go to. I appreciate your
    response.
        Secretary King. Thanks.
        The Chairman. Thank you, Senator Murray.
        I'd like to put in the record a letter from the Network for
    Public Education.

              ``Dear Senator Alexander, when the Every Student
            Succeeds Act was proposed, our organization gave it
            qualified support. We would have preferred the
            elimination of mandated annual testing. We believed
            that under ESSA, parents, citizens and teachers would
            have a greater voice in the creation of their State
            school accountability system. We are, therefore, deeply
            disappointed in the proposed regulations put forth by
            Secretary King. It is apparent that he is seeking
            through regulation to maintain Federal control of State
            accountability systems despite the clear intent of the
            law. We believe that he is attempting to rewrite the
            law and extend Federal overreach, in some cases even
            beyond what was under No Child Left Behind.''

        We'll include this in the record with specific items.
        [The information referred to was unavailable at time of
    print.]
        The Chairman. Mr. Secretary, I thank you for coming and
    listening. I think that, if I understood you correctly about
    the timeline that Senator Murray mentioned, that I mentioned,
    that States can expect to have more flexibility in terms of a
    transition year, then a year of implementation, and then a year
    of identifying schools that the regulation would appear to
    offer. If that is the case, I hope you'll make that clear to
    States soon. I think if you do that, that will be seen as a
    welcome demonstration of flexibility and the fact that you're
    actually listening to the feedback that you're getting in
    comments on the regulation. Would you expect that before long
    you would make that clear? You think you just did.
        Secretary King. I think I have, but I will say that the key
    question that I hope States will comment on is in the schools
    that they are providing additional support in 2017-18, how they
    will identify those schools. Will that be carrying over the
    schools from 2016-17? Will that be schools that are newly
    identified using the existing system, or schools that are
    identified using the new indicators, if they are available?
        This is a place where we've made clear to State chiefs and
    to others that we are eager for folks' feedback and look
    forward to responding to that comment in the final regulation.
        The Chairman. One other just general thought, and let me
    use Common Core as an example, as Senator Roberts was talking.
    Sometimes when I say we repeal the Common Core mandate, some
    people have said to me, well, there really wasn't a Common Core
    mandate. And the answer to that is, well, there really was, in
    effect, because while you didn't say every State has to adopt
    Common Core, you said, the Secretary said at the time in order
    to get a waiver from the requirements of No Child Left Behind,
    you've got to adopt challenging standards that are common to a
    significant number of States or get your State university
    system to do it, and, in effect, about the only way to meet
    that requirement was to adopt Common Core, and that's what 30
    of the 42 States who got their waivers did.
        I would caution you against any attempt in the regulation
    to do as Senator Roberts was saying, a two-step. You were
    saying very clearly, just as the law says, States set their own
    academic standards. But if the regulation makes it look like
    that you could reject the evidence, and by rejecting the
    evidence reject the standard, then that goes around the barn
    door. Do you envision that, that you would say to Kansas that
    you may set your standard but we don't like the evidence you
    used to set it, so therefore we're going to reject the
    standard?
        Secretary King. No. What we're trying to do in the
    regulation is describe the longstanding peer review process
    around States having high-quality assessments that align with
    their standards. Certainly if there's any lack of clarity
    around States' prerogative to set their standards, we want to
    emphasize that, and we're open to adding language that makes
    that even more clear.
        The Chairman. I would appreciate that. One place to look
    might be to look at the use of the word ``demonstrate'' as
    opposed to the word ``assure.'' That word was carefully chosen.
    ``Assure'' means let you know we've done it. ``Demonstrate''
    means prove it to us that you did it. Those are different
    words. I appreciate your response. I think that's a
    constructive response.
        I think this has been a good hearing and I appreciate your
    coming. This is the fourth hearing we've had on the
    implementation of this Act, and I'll conclude it the way I
    started.
        We want this Act to succeed, we'd like for you to succeed,
    and we'd like for the teachers and the school board members and
    the parents around the country to have the same feeling about
    this law at the end of this year that they did at the end of
    last year, which was one that they were pleased to see that
    Senator Murray and others, as well as the Republicans on the
    committee came to a consensus, resolved our differences,
    created a period of stability, and restored more responsibility
    to people closest to the children. If we could end the year
    with that same sort of feeling, why, you'll have done a really
    good job. So would the President, so will we, and we can step
    back and let the teachers and the school boards and the States
    have this new era of innovation.
        Thank you very much for coming.
        Secretary King. Thank you.
        The Chairman. I look forward to continuing the
    conversation.
        The hearing record will remain open for 10 business days.
    Members may submit additional information and questions to our
    witnesses for the record within that time, if they would like.
    That would be you.
        Thank you for being here today.
        The committee will stand adjourned.
        [Additional material follows.]

                              ADDITIONAL MATERIAL

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

      Response by Secretary John King to Questions of Senator Alexander,
       Senator Enzi, Senator Collins, Senator Hatch, and Senator Sanders

                               senator alexander
        Question. Your proposed regulation basically says that once a State
    identifies a school as needing improvement, the school is always going
    to be identified as in need of improvement unless it shows
    ``significant progress'' on federally mandated math and reading tests
    or other academic measures like graduation rates.
        The law says:

              ``Develop a State accountability system that is based on test
            scores, graduation rates, another academic indicator for
            elementary schools, English proficiency, and another indicator
            of school quality or student success of the State's choosing.''

        Test scores and the other academic indicators need have
    ``substantial'' weight in that system.
        But the law leaves up to the State what ``substantial'' means. And
    the Secretary is prohibited from prescribing ``the weight of any
    measure or indicator used to identify or meaningfully differentiate
    schools.''
        Your regulation basically says that once a school is identified for
    improvement, you have to improve on the tests and other academic
    indicators or you cannot move out of identification.
        So federally mandated tests and academic indicators are once again
    the primary means used to determine whether a school is succeeding or
    not.
        You also place several new requirements on any non-academic
    indicator a State may choose to include in its accountability system
    which severely limit what a State may include, when the law was clear
    we wanted States to have flexibility to include indicators they wanted
    to.
        This also reinforces the importance of tests and academic
    indicators.
        We have seen the results of a heavy focus on tests from the Federal
    level before, and it created an explosion of over-testing as schools
    and teachers prepared for these high-stakes tests.
        Don't you agree we need to change that? How does your proposed
    regulation move away from such a heavy focus on tests?
        Answer. The proposed regulations, like the statute, would require
    the use of indicators in the accountability system that go beyond test
    scores to promote a more well-rounded education for students, something
    we believe is important. As is required by the statute, our proposed
    regulations would require States to adopt at least one indicator of
    School Quality or Student Success while providing the flexibility to
    determine how many and which such indicators would be appropriate for
    each State's own context and needs. Our proposed regulations build on
    the statutory requirements by including critical guardrails that ensure
    that all of the indicators included in a State's system advance the
    statutory purpose of the accountability system overall.
        To give States flexibility to develop systems that reflect their
    priorities, the proposed regulations do not prescribe or suggest
    specific percentages for any of the indicators, or a range for weights.
    Instead, the proposed regulations would add clarity to what
    ``substantial'' and ``much greater'' mean by focusing on how the
    indicators come together and impact school differentiation and
    identification.
        The proposed regulations do not require a State to base
    identification solely on test scores and graduation rates--all
    indicators would be taken into account in differentiating schools, but
    they must be taken into account in a way that is consistent with the
    statutory requirements for weighting. For example, the proposed
    regulations would ensure that, together, academic achievement,
    graduation rate or academic progress, and ELP are given ``much greater
    weight'' than indicators of School Quality or Student Success by
    providing that performance on one or more School Quality or Student
    Success indicator alone could not prevent a school from being
    identified for support and improvement unless the school made
    significant progress (determined by the State) on at least one of the
    ``substantial'' indicators, too. Further, the proposed regulations do
    not require a State to establish exit criteria for identified schools
    that are based solely on test scores and graduation rates. Provided
    that the school no longer meets the State defined criteria for
    identification, under the proposed regulations, a State would have
    discretion to examine a myriad of other student outcomes in the school
    to determine whether improvements are sufficient for a school to exit
    status, consistent with the statutory purpose of school improvement
    plans to ``improve student outcomes.''
        As you know, the proposal was out for 60 day public comment, which
    recently closed on August 1, 2016. The Department will take all
    feedback and suggestions received under consideration as we finalize
    the regulation.
                                  senator enzi
        Question 1. I have heard from many individuals in my home State of
    Wyoming that they believe the U.S. Department of Education is
    attempting to supersede the clear intent of the Every Student Succeeds
    Act through the regulation process. More specifically, it has become
    apparent to me and many of my constituents that the Department of
    Education is attempting to assert more control over State Educational
    Agencies than what the bipartisan Every Student Succeeds Act clearly
    intended. What are you doing as Secretary to address these concerns?
        Answer 1. Education is, and should remain, primarily a State and
    local responsibility. What we do at the Federal level is support States
    and school districts to improve opportunity for all students, invest in
    local innovation, research and scale up what works, and protect our
    students' civil rights, providing guardrails to ensure educational
    opportunity for all children. The Every Student Succeeds Act provides
    greater flexibility for local communities and States to provide equity
    and excellence for all students. However, since the U.S. Department of
    Education was first established, it has played an essential role in
    protecting the civil rights of all students, especially our low-income
    students, students of color, students with disabilities, and English
    learners. The Department will continue to work with States and
    districts to implement their authority under the new law so we can all
    ensure that every child in this country, regardless of background or
    circumstance, has access to an excellent education that prepares her or
    him for college and career.

        Question 2. Is the growing trend of offering ``guidance'' in lieu
    of promulgating rules a deliberate practice of your Department? What
    force and effect does guidance have? Why is guidance being used instead
    of rules? The most recent guidance on bathroom policies and gender
    equity in Career and Technical Education come with associated threats
    to affect Federal funding streams if not followed. How is this
    consistent with ESSA and the clear intent of Congress to give States
    more flexibility with Federal funds?
        Answer 2. Consistent with the Administrative Procedure Act, the
    Department has issued guidance documents, across multiple
    Administrations, in order to assist States, school districts, schools,
    and other stakeholders in understanding the Department's policies and
    practices and interpretations of the statutes and regulations it
    administers and enforces. The Department does not issue guidance in
    lieu of promulgating regulations, but rather, elects to issue
    additional types of written materials as authorized by Federal law. The
    guidance documents themselves do not have the force and effect of law.
                                senator collins
        Question. During the reauthorization process, I worked with the
    junior Senator from Vermont and others to develop and improve an
    innovative assessment pilot program to give States and school districts
    the opportunity to move away from standardized tests and toward
    assessments that can measure learning competency and proficiency. This
    pilot program is one way to address concerns about over testing and
    could support those States, like Maine, Vermont, and others, that want
    to focus on what students are learning and how well they are applying
    that knowledge, not just how well they can take a test. We hoped these
    regulations would have come out in May, but they did not.
        When will the Department be issuing regulations or guidance on the
    Innovative Assessment Pilot?
        Answer. The Department, as laid out in the Administration's Testing
    Action Plan, is committed to ensuring that all assessments students
    take are high-quality, fair, and worth the time students spend taking
    them. Critically, assessments must also provide valuable information on
    student learning and progress to parents, educators, and students
    themselves. States have made significant strides in recent years to
    improve the quality of their assessment systems, incorporating more
    complex question types and writing, measuring a broader range of skills
    and knowledge, and using technology to improve how assessments are
    administered and scored. However, we know that there is still more we
    can do to improve the testing experience--today, in too many schools,
    redundant and ineffective tests continue to consume valuable
    instruction time.
        We believe that innovation in the design and delivery of large-
    scale State assessment systems is one way in which States can build on
    the work that has already been done, and ESSA's innovative assessment
    demonstration authority under title I, part B supports this idea by
    giving selected States time to pilot innovative assessments before
    implementing them statewide. These pilots can also help develop
    evidence for new high-quality assessment models that can be replicated
    in other States, moving the entire field of assessments forward through
    innovation.
        On July 11, the Department published an NPRM in the Federal
    Register that promotes and helps operationalize this new flexibility
    for statewide assessment systems in the law. The public comment period
    on these proposed regulations closes September 9, after which the
    Department will address the comments we receive and develop the final
    rules.
        Separately, on August 5 the Department released an invitation for
    States to apply for Enhanced Assessment Grants, which included a
    competitive priority for States who wish to develop, evaluate and
    implement innovative assessment types and design approaches.
                                 senator hatch
        Question 1. In ESSA, we spelled out three ways to resolve payment
    for extra transportation costs between child welfare agencies and
    districts. If there are additional costs, the child welfare agencies
    can reimburse the district for extra costs, the districts can agree to
    pay the extra costs, or the two can reach an agreement about how to
    split these costs. The proposed regulations appear to put the districts
    on the hook as a default payer if no agreement can be reached, which I
    believe could undermine a good faith collaborative process between
    districts and child welfare agencies. Can you explain how this is
    consistent with statutory language?
        Answer 1. With the enactment of ESSA, title I, part A of the
    Elementary and Secondary Education Act (ESEA) now includes vital new
    protections to support children in foster care in achieving educational
    stability and success in school. The new foster care provisions in
    title I are intended to minimize disruptions for children in foster
    care by requiring SEAs and LEAs to collaborate. Specifically, under
    section 1112(c)(5) of the ESEA, an LEA that receives title I funds must
    assure in its local plan that it will develop and implement clear
    written procedures, in collaboration with the State or local child
    welfare agency, governing how transportation to maintain children in
    foster care in their school of origin when in their best interest will
    be provided, arranged, and funded for the duration of a child's time in
    foster care. The statute further provides three options, as outlined in
    the question, that child welfare agencies and school districts may
    agree to in order to pay for any additional transportation costs. The
    statute, however, does not address how to pay for additional
    transportation costs if the child welfare agency and the school
    district do not agree to any of the statutory options. The Department
    published an NPRM to implement provisions of ESSA regarding school
    accountability, data reporting, and consolidated State plans on May 31,
    2016, including proposed regulations regarding the transportation costs
    for students in foster care. We will review public comments we receive
    on this issue and will clarify our position in the final rule, taking
    into consideration the public comments.

        Question 2. To followup on my previous question, the guidance you
    recently released on foster care youth seems to offer a different
    option than the regulations or the law. Question 28 of the guidance
    mentions developing a local or State dispute process for resolving
    agreement issues. It seems counterintuitive to have a local dispute
    procedure in place if the local entities could not originally reach an
    agreement. Can you elaborate more on how you envision this working, and
    explain why you think this is consistent with the proposed regulations?
        Answer 2. On June 23, 2016, the Department of Education and the
    U.S. Department of Health and Human Services released joint guidance on
    ensuring educational stability for children in foster care, which
    addresses the new foster care provisions in title I. Non-regulatory
    guidance creates no new requirements beyond what is in the statute.
        Question 28 of the guidance, as highlighted in the question,
    contains an explanation of the statutory requirements pertaining to the
    LEA transportation procedures, developed in collaboration with the
    State or local child welfare agency (e.g., that even if the two
    agencies cannot reach agreement, their procedures must still ensure
    that a child in foster care promptly receives transportation to his or
    her school of origin); it also provides suggestions and recommendations
    for SEAs, LEAs, and child welfare agencies to consider, based on
    stakeholder feedback and current practices in the field. One of these
    recommendations is that SEAs and LEAs work with child welfare agencies
    to establish State or local dispute resolution procedures, in the event
    that they face difficulty reaching agreement regarding how
    transportation costs will be funded. For example, if an LEA and child
    welfare agency cannot reach agreement on any of the three options for
    transportation cost payments in the statute, the State or local dispute
    resolution procedures could include a process that the LEA and child
    welfare agency would follow in order to reach agreement or the
    procedures could specify a default position for how costs will be
    covered, if no agreement can be reached (such as that the two agencies
    must split the costs equally).
        We will review the public comments on the issue of transportation
    costs that we received in response to our NPRM published on May 31,
    2016, and will clarify the requirement in the final rule, based on the
    public comments.

        Question 3. In the guidance, you mention that title IV-E funds may
    be used by the child welfare agency to pay for transportation costs. It
    is my understanding that there is still some confusion in the field
    about the best way to draw down these funds for this purpose. It would
    also be helpful to highlight how these funds could be used with other
    Federal funds, provided by districts, to create collaborative cost-
    sharing agreements for transportation. Can you or your staff provide
    more detail on best practices for how to do this?
        Answer 3. The Departments of Education and Health and Human
    Services are holding a technical assistance webinar series in July
    through early September to walk through the new foster care guidance
    and to help SEAs, LEAs, and child welfare agencies successfully
    implement the ESSA foster care provisions by December 10, 2016. One of
    the webinars, currently scheduled for the week of August 29, will
    specifically address the transportation requirements in the statute,
    the provisions in the guidance, and promising practices from the field
    on developing joint transportation procedures. Additionally, the
    Department of Health and Human Services recently released a letter to
    the field on the title I foster care provisions under ESSA. The letter
    states that the Department will release an Information Memorandum on
    child welfare agencies' role in ensuring educational stability for
    children in foster care later this summer. Specific questions about the
    use of funds under title IV-E of the Social Security Act for
    transportation should be addressed to the Department of Health and
    Human Services for potential inclusion in the Department's upcoming
    Information Memorandum.
                                senator sanders
        Question 1. I supported the Every Student Succeeds Act (ESSA)
    because it continues the civil rights mission of the Elementary and
    Secondary Education Act (ESEA) to ensure all students have access to a
    high-quality education. I also strongly supported ESSA because it
    overhauled the flawed, blame and shame approach of the No Child Left
    Behind Act, which reduced schools and students to test scores.
        Under NCLB, Vermont had to label every single one of its schools as
    ``in need of improvement.'' It is of the utmost importance that
    implementation of ESSA reflect congressional intent and the public
    desire to break away from the overly prescriptive, one-size-fits-all
    NCLB, while maintaining strong Federal guardrails.
        I am concerned that some of the draft regulations mark a
    continuation rather than a break from NCLB. I am hoping that you can
    address the following concerns and if necessary make changes to the
    regulations that comport with congressional intent and Vermont's
    commitment to equity, quality, and continuous improvement.

              1. As we move away from the broken No Child Left Behind Act
            it is essential that in implementing the Every Student Succeeds
            Act that we do not repeat the same test and punish approach. I
            was proud to work to both lower the high stakes attached to
            tests and help schools reduce the amount of time dedicated to
            testing and test perpetration.
              A key part of moving away from test based compliance and
            toward deeper learning, is how we assess what students have
            learned and know. That is why I worked with my colleague,
            Senator Susan Collins, to include the innovative assessment
            pilot in this reauthorization. This pilot will allow States to
            create their own assessments that can be imbedded with
            instruction and assess deeper knowledge. This would be a much
            needed move away from the isolating test experience and a move
            away from multiple choice tests. This new frontier can only be
            accomplished if the regulations allow States to actually
            innovate, while ensuring the tests produced are of high-
            quality.

        Can you give a status update as to where the innovative assessment
    pilot is in terms of regulations? In addition to this pilot, what is
    the Department doing to reduce over-testing and lowering the high-
    stakes nature of testing?
        Answer 1. The Department, as laid out in the President's Testing
    Action Plan, is committed to ensuring that all assessments students
    take are high-quality, fair, and worth the time students spend taking
    them. Critically, assessments must also provide valuable information on
    student learning and progress to parents, educators, and students
    themselves. States have made significant strides in recent years to
    improve the quality of their assessment systems, incorporating more
    complex question types and writing, measuring a broader range of skills
    and knowledge, and using technology to improve how assessments are
    administered and scored. However, we know that there is still more we
    can do to improve the testing experience--today, in too many schools,
    redundant and ineffective tests continue to consume valuable
    instruction time.
        We believe that innovation in the design and delivery of large-
    scale State assessment systems is one way in which States can build on
    the work that has already been done, and ESSA's innovative assessment
    demonstration authority under title I, part B supports this idea by
    giving selected States time to pilot innovative assessments before
    implementing them statewide. These pilots can also help develop
    evidence for new high-quality assessment models that can be replicated
    in other States, moving the entire field of assessments forward through
    innovation.
        Under ESSA, statewide assessment systems under title I, part A also
    allow students taking advanced mathematics courses in eighth grade in
    States that offer end-of-course tests in high school mathematics to
    avoid unnecessary, redundant testing by allowing those students to take
    the assessment typically administered to high school students enrolled
    in the course; and allow States to permit a district to use a single,
    locally selected, nationally recognized high school assessment across
    the district in place of the statewide high school assessment.
        On July 11, the Department published two notices of proposed
    rulemaking in the Federal Register that promote and help operationalize
    these new flexibilities for statewide assessment systems in the law.
    The public comment period on these proposed regulations closes
    September 9, after which the Department will work to address the
    comments that are received prior to issuing final rules later in the
    year.
        Separately, on August 5 the Department released an invitation for
    States to apply for Enhanced Assessment Grants, which included a
    competitive priority for States who wish to develop, evaluate, and
    implement innovative assessment types and design approaches.

        Question 2. The regulations as proposed would result in Vermont
    making accountability decisions for the 2017-18 school year, based of
    old data from schools operating under NCLB in the 2016-17 school year.
    It is not fair to link a new accountability to an old system that did
    not work for Vermont's students, educators, and parents. Is the
    Department of Education (ED) going to properly align new accountability
    systems with data collected under these new systems, by allowing States
    to make their first accountability decisions from data accumulated
    during the 2017-18 school year, to inform decisions for the 2018-19
    school year?
        Answer 2. In order to provide time for an orderly transition to the
    new ESSA accountability systems and to ensure that there is not a gap
    in supports for students in the lowest-performing schools, the proposed
    regulations would require that all States identify schools for
    comprehensive and additional targeted support for the 2017-18 school
    year (consistent with the effective date for the majority of the
    provisions in the ESSA), with annual identification of schools with
    consistently underperforming subgroups for targeted support beginning
    in the 2018-19 school year.
        We know that States and districts are eager to move to new, multi-
    measure accountability systems as quickly as possible, but we also want
    to ensure that there is sufficient time to meaningfully engage
    stakeholders in developing each State's accountability system and
    system of supports for low-performing schools. As proposed, the
    regulations would allow States to add new measures or replace measures
    over time as they gather new data.
        As I've said many times, we are eager to get feedback from a wide
    variety of stakeholders on the proposed regulations, including on the
    timeline for implementation, and we will consider that feedback in
    developing the final regulations.

        Question 3. I want to ensure that as States go through the process
    of submitting their ESSA plans that they have ample time for community
    input and feedback. The deadlines of March 6 or July 5, set by the
    Department may be unworkable for schools--occurring during summer break
    or into the academic year. From the feedback I have received from
    educators in Vermont, there seems to be a need to adjust the submission
    dates or shorten the review process to ensure that States receive
    feedback at a time that allows for appropriate community input. What
    changes is the Department willing to make changes to the submission
    date and or process for State plans?
        Answer 3. As with all of the issues contained in the Notice of
    Proposed Rulemaking (NPRM) that the Department published on May 31,
    2016, we look forward to considering those public comments related to
    the submission date and process for consolidated State Plans.
    Specifically on the topic of stakeholder engagement, the Department is
    very concerned that States have sufficient time to meaningfully engage
    with a wide and diverse group of stakeholders during the development
    and implementation of their consolidated State Plans. Thus, the
    feedback that the Department receives will help us set the actual
    submission dates. In addition, on June 23, 2016, I issued a Dear
    Colleague Letter highlighting the importance of stakeholder engagement.
    Given this emphasis on stakeholder engagement, the Department is
    mindful of the need to establish submission dates for the consolidated
    State Plan that support State efforts to conduct meaningful stakeholder
    engagement.

        Question 4. I support the Department's attempt to set a floor for
    the size of grants made to schools identified for Comprehensive and
    Targeted Support and Improvement. Unfortunately, the minimum grant
    amounts of $500,000 for schools identified for Comprehensive Support is
    too large for many Vermont schools--exceeding the total school budget
    for 14 districts and is completely unworkable for the 26 other
    districts with budget's less than a million dollars. The Department
    needs to set multiple options for States in establishing minimum grant
    sizes for Comprehensive and Targeted Improvement Schools, and allow for
    a process of minimal burden for States that must set different minimum
    grant sizes that meet their unique needs. How will the Department amend
    its minimum grant size regulation for Comprehensive and Improvement
    Schools so that it works for small and rural States like Vermont?
        Answer 4. We are eager to support all States, including those with
    many small or rural schools, in implementing the statutory and final
    regulatory requirements for schools identified for Comprehensive
    Support and Improvement. In order to ensure that these schools receive
    adequate funding to implement at least one evidence-based intervention
    and to support all students, the proposed regulations would clarify
    that States must prioritize funding available under section 1003(a) of
    the ESEA for these schools and award no less than $500,000 per school
    per year, unless the State determines that a district needs an amount
    of funding smaller than the minimum award in order to implement its
    school improvement plan. This would allow States to make grants below
    $500,000 as they deem appropriate to meet local needs while still
    ensuring sufficient resources to implement the selected interventions.
    We look forward to reviewing public comment on this issue and will
    consider the comments received in promulgating final regulations.

        Question 5. I am happy to see that section 200.3(a) of the proposed
    regulations offers increased transparency on demographic and academic
    achievement data for charter schools. In addition, we should have
    transparency about the management status of these schools. Is the
    Department open to amending this regulation to give the public more
    information noting if a charter school has a management organization,
    and if it does, whether that management organization is a non-profit or
    for-profit entity?
        Answer 5. We look forward to reviewing public comment on the
    proposed regulations and will consider those comments as we work toward
    promulgating the final rule. ED recently began collecting information
    on charter school authorizers, including authorizer type, such as State
    department of education, State board of education, public charter
    school board, local educational agency, university, community college,
    not-for-profit organization, and non-educational government entity.
    Going forward, ED will work toward ensuring public access to this
    information.

                Response by Secretary John King to Questions of
                                 Senator Warren

                      i. student loan servicing re-compete
        Question 1. In April, the Department's student loan bank, the
    Office of Federal Student Aid (FSA), released a solicitation to procure
    services to develop a new student loan servicing platform to improve
    customer service and assist borrowers in distress. Prospective firms
    seeking to work with FSA would need to demonstrate experience
    ``servicing a large number of student loan borrowers successfully and
    converting a large volume of borrower accounts from another student
    loan servicing solution onto the offeror's solution.'' \1\
    ---------------------------------------------------------------------------
        \1\ https://www.insidehighered.com/sites/default/server_files/
    files/Federal_Aid_Servicing_
    Solution_-_Solicitation_Statement_of_Objectives.pdf.
    ---------------------------------------------------------------------------
        This performance requirement suggests that only firms currently in
    the business--including those who have provided poor service to the
    Department--would qualify to compete.

        a. Does the bank believe there were non-incumbent companies
    (companies that do not currently have contracts with the Department)
    that could have reasonably submitted a competitive bid during Phase I
    of the re-compete? Please provide a list of examples.
        b. Three offerors advanced to Phase II. Each of these offerors
    includes one or more incumbent servicers. Does the Department plan to
    re-open the competition to ensure that new players can enter this
    broken market?
        c. In 2014, the bank released a Request for Information related to
    student loan servicing. Which servicers replied to this request? Please
    provide their submissions.

        Answer 1. The Department continues efforts to advance a new loan
    servicing vision that puts the needs of borrowers at the center. In
    this effort we are focused on driving strong outcomes for borrowers by
    ensuring a consistent set of servicing expectations, providing
    transparency in whether those expectations are being met, establishing
    strong oversight and accountability for vendors, and leveraging
    opportunities for multiple partners to compete in providing high-
    quality service to borrowers. That's why the Department's leadership
    has directed Federal Student Aid (FSA) to evaluate Phase II
    solicitation applicants in part on their plan to deploy a team of
    vendors with successful experience in counseling student loan borrowers
    on the best repayment plan or other benefit--such as loan forgiveness
    or loan discharge--appropriate for their individual circumstances.
        Specifically, we have encouraged vendors to form teams that combine
    the benefits of experience and existing infrastructure with cutting
    edge approaches to technology and customer care. Two of the three
    successful Phase I proposals included non-incumbent team members, and
    all offerors have the opportunity to expand their teams in Phase II to
    address the detailed requirements, including the provisions of the July
    20, 2016, policy memo. We also plan to issue another solicitation
    [given budget constraints it is unlikely we will be able to do this
    within 12 months of award--we can't do the second solicitation until we
    have the solution in place with the original team so we will know the
    technical requirements; at this point we do not expect to have 2017
    funding to support this effort--I think this is addressed in question 2
    so I would not address timing here] to supplement the work of the
    contract to ensure participation of additional vendors.
        The Department received 27 responses to the 2014 Request for
    Information; the full lists of respondents, along with the submissions,
    are provided in the attachments to this response. A great share of the
    responses were from public policy and consumer protection organizations
    rather than from servicers and have contributed to our understanding of
    the common challenges borrowers face in servicing and that are
    addressed in the Department's policy direction to FSA.

        Question 2. What is the Office of Federal Student Aid's (FSA)
    expected timeline for Phase II of the re-compete? What is the timeline
    for subsequent phases of the re-compete, including subsequent re-
    compete processes to hire additional entities and/or sub-contractors?
        Answer 2. The Department expects to issue a Phase II solicitation
    later this year. We expect the timing of subsequent procurements to
    follow approximately 12 months after the contract award, subject to
    availability of funds to support implementation efforts under the
    initial award. Each phase allows for participation of additional
    entities and/or sub-contractors in key aspects of improving servicing
    for borrower.

        Question 3a. For each current TIVAS servicer (FedLoan/PHEAA,
    Navient, Great Lakes, Nelnet), please provide data regarding the
    proportion of delinquent borrowers (borrowers between 7-90 days
    delinquent) that have been contacted by the servicer regarding Income-
    Driven Repayment (IDR) programs during the last year.
        Answer 3a. Our servicers attempt to contact all delinquent
    borrowers at multiple touchpoints when a payment is first missed
    through day 90 of delinquency. These outreach attempts involve one or
    more communication methods, including phone calls, e-mail, and
    traditional mail, and most include information regarding income-driven
    repayment. (Under the current servicing contracts, which were
    structured to foster competition based on performance, outreach methods
    and content vary across vendors.) The actual number of borrowers
    contacted varies, given the validity of address or other contact
    information.

        Question 3b. For each current TIVAS servicer (FedLoan/PHEAA,
    Navient, Great Lakes, Nelnet), please provide data regarding the
    proportion of delinquent borrowers that have enrolled IDR programs
    during the last year.
        Answer 3b.

    ------------------------------------------------------------------------
                                                                 Proportions
               Servicer code                  Servicer name          (In
                                                                   percent)
    ------------------------------------------------------------------------
    578................................  Navient...............         5.9
    579................................  Pheaa.................         6.3
    580................................  Nelnet................         6.3
    581................................  Great Lakes...........         5.4
    ------------------------------------------------------------------------

        For each current TIVAS servicer (FedLoan/PHEAA, Navient, Great
    Lakes, Nelnet), please provide data regarding the proportion of
    delinquent borrowers who were previously enrolled in an IDR program but
    have not recertified into such a program during the last year.

        Answer 3c.

    ------------------------------------------------------------------------
                                                                 Proportions
               Servicer code                  Servicer name          (In
                                                                   percent)
    ------------------------------------------------------------------------
    700578.............................  Navient...............         2.4
    700579.............................  Pheaa.................         2.3
    700580.............................  Nelnet................         .05
    700581.............................  Great Lakes...........         4.0
    ------------------------------------------------------------------------

        Question 4. With respect to Phase II, I appreciate your 30th
    directive to FSA Chief Operating Officer, Jim Runcie, directing the
    bank to make past performance ``the most important noncost factor in
    the evaluation.'' \2\ In adhering to this directive, how, specifically,
    will FSA:
    ---------------------------------------------------------------------------
        \2\ http://sites.ed.gov/ous/files/2016/06/John-King-servicer-past-
    performance-memo.pdf.

        a. consider past investigations, lawsuits, and settlements for
    violations of State or Federal consumer protection laws or laws meant
    to protect students and members of our armed services, including
    evidence of wrongdoing compiled by State and Federal law enforcement
    agencies;
        b. consider servicers' failure to pay existing fines for past
    sanctions;
        c. evaluate servicers' previous record of enrolling distressed
    borrowers into alternative repayment or debt relief plans, including
    the sampling or data points FSA plans to use; and,
        d. evaluate servicers' previous rates of IDR recertification?

        Answer 4. The Department is currently preparing the Phase II
    solicitation, which will include the criteria to be used in evaluating
    proposals. In accordance with the Secretary's directive, past
    performance will be the most important non-cost factor and will be
    considered at two different phases of the selection process. Generally,
    an offeror's past performance is an indicator of its ability to perform
    a new contract successfully and will first be used by the evaluators to
    assess the risks associated with how the offeror would perform the
    contract. Consistent with Federal Acquisition Regulations, after the
    initial evaluation is completed, the Contracting Officer must consider
    the prospective contractor's performance record, among other factors,
    in order to make an affirmative determination of whether that firm is
    responsible. Only responsible firms may receive an award.
        Both evaluators and the Contracting Officer, in their respective
    assessments, will consider past performance data for an offeror
    including that which indicates the offeror has violated State or
    Federal consumer protection laws, engaged in wrongdoing in its loan
    servicing activities, failed to pay fines for past sanctions, or
    performed poorly in enrolling distressed borrowers in repayment or debt
    relief plans or in recertifying participants in Income-Driven Repayment
    (IDR) programs.
        Evaluators have discretion in applying their judgment in the
    evaluation of an offeror's past performance and their work is subject
    to important legal constraints. Under the law, Federal agencies must
    also give every offeror the opportunity to comment on adverse past
    performance information being considered which the offeror has not
    previously had a chance to address.
        The specifics of how evaluators are to consider certain past
    performance information (e.g., rating schemes they may use, internal
    guidance they may consult, evaluation forms they may fill out) is
    confidential source selection information. As such, it must be
    protected from unauthorized disclosure in accordance with the
    Procurement Integrity Act, 41 U.S.C. 2102, and implementing
    regulations, to ensure the integrity of the evaluation process and the
    fair treatment of all participants.

        Question 5. Each of the three offerors that have been advanced to
    Phase II includes a market participant (Navient, Nelnet, and PHEAA)
    that has been caught up in the ``9.5 percent scandal'' that plagued the
    student loan industry. The Department's Inspector General issued
    reports on each of these firms and how they overbilled the
    Department.\3\
    ---------------------------------------------------------------------------
        \3\ http://www2.ed.gov/about/offices/list/oig/auditreports/fus009/
    a03i0006.pdf.

        a. How will FSA consider the 9.5 percent scandal in its evaluation
    of past performance?
        b. Has the Department recovered the $22 million in excess payments
    billed by Navient, as noted by the Inspector General and the
    Department's own investigation?

        Answer 5. The Department will consider this type of information in
    its evaluation of past performance and when making a responsibility
    determination on a prospective contractor. Consistent with Federal
    Acquisition and Regulations, the agency will assess whether the
    potential vendor has a satisfactory record of integrity and business
    ethics. Please refer to the response to Question 4 above for more
    information on how past performance information may be used.
        At this time, the Department has not recovered any of the excess
    payments from Navient. On July 27, 2016, FSA received Navient's appeal
    of FSA's Final Audit Determination related to the Office of Inspector
    General's report that Navient overbilled the Department for special
    allowance payments in the amount of $22 million.

        Question 6. In response to allegations that it violated the Fair
    Credit Reporting Act, one of the Department's largest servicers, PHEAA,
    asserted ``sovereign immunity'' from this law.\4\
    ---------------------------------------------------------------------------
        \4\ http://www.scotusblog.com/wp-content/uploads/2016/02/pele-op-
    below.pdf.

        a. Does the Department believe it is appropriate to retain
    contractors that believe they do not need to follow Federal consumer
    financial protection laws?
        b. Will the Department require, by contract, that contracted
    servicers may not assert sovereign immunity on allegations or claims
    related to its actions on Federal student loans?

        Answer 6. In evaluating offers and selecting contractors, the
    Department focus is each offeror's ability to perform the work as
    required; that includes ensuring compliance with required Federal laws
    and regulations. The Department is currently preparing the Phase II
    solicitation, which will include detailed requirements, driven by the
    policy direction outlined in the Department's recent memo to FSA It is
    expected that among those requirements will be a requirement to comply
    with Federal consumer financial protection laws. If an offeror is
    unable or unwilling to successfully carry out the requirements of the
    contract, that information would be considered by Department
    procurement officials in the evaluation and in selecting the awardee. A
    failure to commit to important work requirements could lead to
    disqualification of an offeror.
        As to PHEAA's claim of sovereign immunity in past and current
    litigation, that in and of itself would not prejudice it in the
    evaluation of past performance. The Comptroller General has indicated
    that in evaluating past performance agencies may not penalize offerors
    simply for asserting their legal rights. To the extent there is
    evidence that any offeror's claims or assertions of rights were
    frivolous, were asserted in bad faith, or had an adverse impact on
    contract performance, or if there is evidence of abusive use of
    litigation, then evaluators may weigh this information in the
    assessment of past performance.

        Question 7. In evaluating past performance, how, specifically, will
    the Department analyze a sample of servicers' loan portfolios to:

        a. compare and assess the proportion of delinquent borrowers;
        b. compare and assess what proportion of delinquent borrowers have
    been contacted regarding IDR programs;
        c. compare and assess what proportion of delinquent borrowers have
    enrolled IDR programs; and,
        d. compare and assess what proportion of delinquent borrowers who
    were previously enrolled in an IDR program, but have not recertified
    into such a program?

        Answer 7. Success in helping borrowers avoid delinquency and
    default will be an element of the past performance evaluation. Details
    on how these factors will be assessed are still under development, but
    will likely include the elements outlined in your question.

        Question 8. In evaluating past performance, does the Department's
    student loan bank plan to require companies involved in the bidding for
    contracts to disclose any pending civil investigative demands,
    subpoenas, lawsuits, or settlements relating to their servicing
    practices prior to awarding a contract?
        Answer 8. FSA is currently preparing the Phase II solicitation,
    which will include instructions to offerors on the information to be
    provided in their proposals. While those instructions are not yet
    finalized, it is expected that offerors will be requested to provide
    information regarding any pending civil investigative demands,
    subpoenas, lawsuits, or settlements relating to their servicing
    practices.

        Question 9. The Department has said that it intends to create
    mandatory servicing standards. How will you ensure that these standards
    are privately and publicly enforceable?
        a. Specifically, will the Department create a third party
    beneficiary right for borrowers in the contracts?
        b. Will the Department insert the enforceable standards in the
    promissory notes that students sign?
        c. If not, how else would the Department ensure enforceability?

        Answer 9. Generally, Federal agencies may enforce the requirements
    in their contracts by asserting a claim against the contractor for
    breach-of-contract damages and/or other remedies available under the
    contract. This may include a claim for failure to comply with service
    standards that have been incorporated into the contract. The Contract
    Disputes Act establishes the procedures and requirements for asserting
    such Government claims and for resolving related disputes.
        Even in the absence of enforcement actions by the Department or by
    private plaintiffs, the Department believes that it can effectively
    ensure a high rate of compliance with servicing standards through a
    number of contract administration measures. They include:

        1. Financial incentives built into the compensation structure of
    the servicing contracts that would adjust compensation based on the
    quality of customer service achieved by the contractor;
        2. Formulae for allocation of accounts to customer service
    providers that take into account the quality of the provider's customer
    service during current or past periods of performance;
        3. Reports on the quality of the contractor's customer service
    submitted to the Contractor Performance Appraisal Reporting System
    (CSPARs). CPAR reports are available to, and are frequently consulted
    by, contracting officers across the Federal Government;
        4. Docking or withholding of the contractor's compensation due to
    defective performance, including through the application of liquidated
    damages or administrative remedies clauses, subject to applicable
    procedures and legal requirements;
        5. Customer feedback mechanism established under the contract for
    the resolution of customer complaints; and,
        6. Initiation of suspension or debarment proceedings should there
    be adequate grounds to suspend or debar based on the contractor's
    failure to perform.

        The Department is considering these and related measures as it
    finalizes the Phase II Solicitation. After award, as part of its
    enhanced monitoring and oversight activities, the Department is
    committed to applying every available measure vigorously and invoking
    its enforcement rights when appropriate, in order to ensure the highest
    quality of customer service for borrowers.

        Question 10. Where, in addition to the contracts, will the
    standards be available? For example, will there be a handbook or
    manual? If so, how will this differ from the standards in the
    contracts? Will the contracts and standards be public?
        Answer 10. Standards and contracts will be available to the public.
    Published standards will not differ from those included in the
    contracts.

        Question 11. How does the Department intend to adopt the Treasury
    Department's recommendations on best practices in performance-based
    contracting, and build these recommendations into the Department's
    incentive model? \5\
    ---------------------------------------------------------------------------
        \5\ https://www2.ed.gov/finaid/loans/repay/best-practices-
    recommendations.pdf.
    ---------------------------------------------------------------------------
        Answer 11. Consistent with the Treasury Department's
    recommendations, we are structuring the servicing re-compete to
    incorporate a compensation structure that incentivizes servicers to
    meet or exceed clearly defined service levels tied to ensuring
    borrowers receive the information and assistance they need to
    effectively manage their loans. In addition, we have established a
    Customer Feedback System that creates a standardized complaint process
    for borrowers who have issues regarding their interactions with their
    servicer. Last, we are expanding our oversight, monitoring, and vendor
    management processes to better assess compliance with contractual
    requirements.

        Question 12. Is the Department planning to create new financial
    incentives for the new servicing contracts? If so, which elements of
    the current metrics is the Department planning to keep and which will
    the Department change or improve? How does the Department plan to
    compensate specialty servicers? Has the Department evaluated the
    performance or effectiveness of the current specialty servicers and are
    these evaluations public? Please send my office the specialty servicer
    contracts.
        Answer 12. The Department is considering a broad range of
    approaches to create financial incentives that encourage accountability
    and high performance. In general, we expect that the new contract will
    include much more detailed and specific requirements and accompanying
    performance expectations, with incentives and disincentives tied to the
    vendor's success in meeting or exceeding those expectations.
        The requested evaluation and contract materials related to TEACH
    Grant, Public Service Loan Forgiveness, and Total and Permanent
    Disability Discharge processing, are provided in the attachments to
    this response.

        Question 13a. Which specific offices within the student loan bank
    and the Department will be involved in the review of prospective
    bidders? According to public information sources, the Department's
    student loan bank's Deputy Chief Operating Officer, Matthew Sessa,
    formerly worked at PHEAA. Has the Department's ethics office
    specifically prohibited Mr. Sessa from participating in any discussion
    related to student loan servicing? \6\
    ---------------------------------------------------------------------------
        \6\ https://www.linkedin.com/in/matthew-sessa-13b5a44.
    ---------------------------------------------------------------------------
        Answer 13a. Staff from a number of offices will participate in the
    review, including primarily FSA's Acquisitions, Finance, Technology,
    and Business Operations offices.
        Currently, Mr. Sessa is precluded from participating in any
    particular matters involving PHEAA.

        Question 13b. How many other employees at the bank are barred from
    participating in decisionmaking related to student loan servicing and
    the re-compete, due to their personal financial interests or recent
    employment history?
        Answer 13b. When particular matters are identified, such as the
    evaluation of proposals, FSA screens every individual proposed to
    participate in the evaluation for conflicts of interest. Individuals
    found to have a conflict of interest are not selected. None of the
    employees selected to participate in the evaluation of the loan
    servicing proposals was found to have a conflict of interest due to a
    personal financial interest, recent employment history, or otherwise.

        Question 13c.
        Answer 13c.

        Question 13d. How will the Department ensure that employees at the
    bank are barred from participating in decisionmaking related to student
    loan servicing and the re-compete, due to their personal financial
    interests or recent employment history?
        Answer 13d. The Department is committed to ensuring the highest
    standards of ethics and integrity. Guidance documents are shared with
    employees specific to seeking employment, including post-employment
    rules. These documents are distributed by the Department's Ethics
    Division. As you will see from the documents, the April 15, 2014
    document provides guidance on specific laws and regulations that govern
    employment matters. The second document provides employees information
    in a conversational tone to help ensure the technical aspects of the
    laws and regulations are understood. Both documents make clear that
    there are certain restrictions on Federal employees, particularly those
    that have been involved in procurement activities. Compliance with
    ethical standards and other rules applicable to procurement is promoted
    through training and ongoing outreach efforts to employees at all
    levels. The Department thus ensures that employees are well-versed in
    the conflict of interest requirements as they relate to their job
    duties and responsibilities.
        Where an evaluation team is organized for procurements above the
    Simplified Acquisition Threshold (SAT) (currently greater than
    $150,000) the following steps are taken:

        1. At the time the evaluation teams are empaneled, evaluators are
    advised regarding avoiding conflicts of interest, protecting
    confidential information and other rules of conduct applicable during
    the competition. Any individual who is concerned about potential
    conflicts of interest (COI) is referred to OGC for vetting. None of the
    individuals involved in the Phase I evaluation had any COI due to
    recent employment history. The Phase II evaluators will be subject to
    similar screening and rules of conduct.
        2. Each participant is required to complete a Non-Disclosure
    statement which requires reporting of COI, prohibits release of source
    selection information outside the panel and explains that only the
    Contracting Officer and the head of the agency may release proposal
    information or source selection information about the procurement.
        3. Information about ongoing procurements is closely held and only
    individuals with an actual need to know are provided information not
    available to the public.
        4. Vendors are likewise informed about COI and all Department
    contracts contain COI provisions compelling vendors to report COIs
    including any associated with Department employees.
                       ii. general student loan servicing
        Question 14a. A November 2015 Government Accountability Office
    (GAO) report found ``weaknesses in the processes for selecting calls to
    be monitored and for documenting results.'' Specifically, the GAO found
    that ``FSA monitors far fewer outbound than inbound calls, even though
    one servicer said it makes 60 times more outbound calls than it
    receives inbound calls, and outbound calls are often made to borrowers
    who are delinquent and at risk of default.'' \7\
    ---------------------------------------------------------------------------
        \7\ http://www.gao.gov/products/GAO-16-196T.
    ---------------------------------------------------------------------------
         Does the Department and FSA plan to increase the number of full-
    time employees monitoring calls made between servicers and borrowers?
    If so, how many FTE's will be allocated?
        Answer 14a. Yes. Over the last 9 months, FSA has increased its Call
    Monitoring Capacity by 55 percent. Additionally as a point of
    clarification, inbound calls generally equate to a conversation with
    the borrower, where as numerous outbound call attempts are required to
    yield a conversation.
        We will continue to evaluate resource needs and expect to bring on
    additional staff, provided funding is available.

        Question 14b. How do the Department and FSA currently determine
    which phone calls to monitor?
        Answer 14b. Each servicer is required to provide a listing of calls
    of varying lengths from the previous month with fully identifiable
    information for each call. The servicer is required to send information
    regarding inbound general servicing calls, outbound collection calls
    and all of the specialty line calls (which would include military
    specific lines). We should note that the vast majority of outbound
    calls are an attempt to make contact with a borrower that may not
    result in an actual contact with the intended party. FSA selects a
    random sample to review.

        Question 14c. How has Department and FSA addressed this weakness
    found by the GAO?
        Answer 14c. The Department has taken a number of steps to address
    GAO's recommendations. Each month, calls are sent to the servicer for
    review on a monthly report. These reports include calls that have been
    escalated throughout the month of review as well as any other calls
    that did not meet the passing standard. The servicer is provided with
    feedback and allowed a subsequent response. Following the response from
    the servicer, the final report will be produced to be archived and sent
    to the appropriate internal FSA entities.
        Escalated call reviews are sent to the servicer if there is a
    specific reason for immediate escalation/resolution. The servicer is
    expected to respond to the escalation as soon as possible, generally
    within 2 days. The response is then recorded and archived for use in
    trending and analysis for any further occurrences that may need to be
    escalated further or brought to management's attention.
        In addition, we have enhanced our new Call Monitoring Tool, which
    now allows monitors to more thoroughly analyze reporting to identify
    areas in need of improvement.

        Question 14d. What is the process for ensuring that servicers
    implement the necessary changes when deficiencies are found? Has the
    Department or FSA discovered instances of servicers failing to
    implement changes? If so, what steps did the Department or FSA take as
    a result, and how will these past deficiencies factor into FSA's
    evaluation of past performance?
        Answer 14d. When deficiencies are found with call selection (i.e.
    call quality), servicers are notified of the deficiency and are
    required to address the deficiency within 5 business days of receipt of
    the notification. The servicer is asked to address each failure or
    escalation reported with a written response including what corrective
    action they will take to address the deficiency. FSA is informed when
    corrective action steps are completed and necessary changes are
    implemented. FSA then monitors the servicer's calls providing the
    servicer with feedback as to whether there is improvement in the area
    of deficiency where changes were made. To date we have not found
    instances of servicers failing to implement changes.

        Question 15. The same GAO report found that FSA has failed to
    provide servicers with clear guidance on how to apply over or under
    payments. Is there an updated timeline on when FSA will provide such
    guidance to ensure that borrowers receive consistent servicing
    practices as they repay their student loans? \8\
    ---------------------------------------------------------------------------
        \8\ Id.
    ---------------------------------------------------------------------------
        Answer 15. We have met with servicers to discuss the need for a
    comprehensive approach to payment allocation that minimizes customer
    confusion and improves the transparency of the process. Having a common
    approach to payment allocation will provide common and consistent
    customer messaging on allocation. Changes to payment allocation logic
    require system changes and revisions to customer interfaces (e.g.
    website and IVR), call specialist training, and letters, statements,
    and disclosures. Given the scope and cost of such a change across the
    nine current servicers, the Department has deferred any redesign
    pending the servicer re-compete.

        Question 16. A June 2016 GAO report discovered that borrowers may
    have difficulties with contacting servicers through their call centers
    due to where they live and the hours of operation at call centers.
    Specifically, Department officials stated that they ``have no minimum
    standard for call center hours and each servicer sets its own.'' \9\
    What steps has the Department taken to address this concern?
    ---------------------------------------------------------------------------
        \9\ http://www.gao.gov/products/GAO-16-523.
    ---------------------------------------------------------------------------
        Answer 16. As directed by the Under Secretary in his recent Policy
    Memo, borrowers can expect to be able to reach their Servicer during
    and after normal business hours, including availability after 5 p.m. in
    all continental U.S. time zones and some weekends and as such, call
    center hours that align with this expectation have been included in
    Phase II of the Loan Servicing Solicitation requirements.

        Question 17. This same 2016 report also found that,

              ``no performance metrics relate to compliance with program
            requirements, servicers with more compliance errors experience
            no reduction in assigned loans, even as their borrowers may
            experience servicing problems.'' \10\
    ---------------------------------------------------------------------------
        \10\ Id.

        Does the Department plan to incorporate this as a metric moving
    forward, both with the re-compete and single servicing platform? If so,
    how does the Department plan to incorporate and weight this metric?
        Answer 17. As noted in our response to Question 12, the Department
    is considering a broad range of approaches to create financial
    incentives that encourage accountability and high performance against
    program requirements. Final decisions will in part be a function of the
    structure of the winning proposal; as such, we are not able to specify
    which, if any, elements of the current metrics will be included in
    future contracts. In general, we expect that the new contract will
    include much more detailed and specific requirements and accompanying
    performance expectations, with incentives and disincentives tied to the
    vendor's success in meeting or exceeding those expectations.

        Question 18. Will the Department or FSA regularly release findings
    from examinations of its contracted servicers and subcontractors?
        Answer 18. The Department does not plan to release formal Past
    Performance reporting (PPIRS), consistent with governmentwide practice
    and applicable regulations. We are considering what level of reporting
    is appropriate for other servicer reviews.

        Question 19. Please provide all Internal Review Reports of
    contracted servicers and debt collectors over the past 5 years.
        Answer 19. The requested reports are enclosed.
                        iii. student loan portfolio data

        Question 20. I understand that the Department produces a number of
    documents on a recurring basis for evaluating the health of the loan
    portfolio and the performance of student loan servicers. This includes
    things like the Operations Services Reports.
        Describe each of these document types, their use, and their
    recurrence, including the student loan servicer performance reports
    that FSA leadership receives to assess the performance of their loan
    portfolios. Please provide copies of these documents to my office. Will
    the Department release these documents to the public?
        Answer 20. FSA relies on one report to evaluate servicer
    performance, the Operations Services Portfolio Report. The Operations
    Services Portfolio Report (attached) produced monthly, provides an
    overview of the entire portfolio at a glance, and includes the volume
    of borrowers in various repayment statuses (non-defaulted, defaulted,
    current, delinquent, etc.). The report also tracks categories of
    interest including the breakdown of the portfolio by school type and
    payment plan type, the percentage of borrowers in various stages of
    delinquency, and it identifies possible issues such as duplicate
    disbursements. Key statistics are illustrated in a variety of charts
    and graphs.
        Copies of the requested material have been submitted to your
    office. As part of its commitment to increasing transparency, Federal
    Student Aid proactively publishes information relating to the Federal
    student loan portfolio on the FSA Data Center at https://
    studentaid.ed.gov/sa/about/data-center/student/portfolio. This series
    of reports is updated quarterly and includes information pertaining to
    the breakdown of the outstanding portfolio by program type, loan type,
    servicer, loan status, repayment plan, and delinquency status.

        Question 21. Will the Department publish quarterly data on the
    number of borrowers certified into Public Service Loan Forgiveness, or
    other programs intended to benefit borrowers to allow me and other
    policymakers, as well as the public, to understand their effectiveness?
        Answer 21. Although no borrower will be eligible to receive
    forgiveness under the Public Service Loan Forgiveness Program until
    October 2017, borrowers interested in PSLF are encouraged, but not
    required, to submit an Employment Certification Form (ECF) annually or
    whenever they change jobs to help track their progress toward meeting
    the PSLF eligibility requirements. On August 19, 2016, Federal Student
    Aid released information about the Public Service Loan Forgiveness
    program, including the number of borrowers who have submitted
    Employment Certification Forms and the status of those forms. In
    addition, the Administration is working to enhance the program's
    effectiveness by simplifying the process of applying for PSLF. The
    United States Digital Service is partnering with FSA to digitize the
    PSLF application so that eligible borrowers do not struggle with paper
    processes to have their loans forgiven.

        Question 22. I understand that the Department has received requests
    from researchers to access anonymized NSLDS and other data and that the
    requests are on hold. Can you explain why the requests are on hold and
    what your timeline is to resolve any delays?
        Answer 22. FSA has received requests for datasets that remove data
    elements such as Social Security Number, name, and date of birth. Even
    without these identifying data elements, other data elements in the
    requests could constitute personally identifiable information,
    especially in combination with each other and other publicly available
    data. FSA is committed to safeguarding the privacy of students and
    their families. As such, FSA is currently researching ways of providing
    truly de-identified data to the public while complying with all
    relevant laws governing data privacy and use.
        In addition, FSA is launching a pilot of its Advanced Insights
    through Data (AID) effort, which seeks to provide federally affiliated
    researchers with access to FSA data that has not been anonymized in a
    secure environment that protects student privacy. For additional
    details of this effort, please see response to question 23.

        Question 23. Earlier this year the White House announced ED would
    start a process for granting researchers access to Federal student aid
    data through the Advancing Insights through Data (AID) Project. What is
    the status of AID? How many individuals have been granted access, what
    is the process for granting access, and where can individuals learn
    about how to apply?
        Answer 23. The AID initiative is an effort to provide federally
    affiliated researchers with secure onsite access to student aid data
    while protecting student privacy. The effort is currently in a pilot
    phase with a single research effort. The pilot is helping inform
    broader requirements around privacy, security, technology, resources,
    and other issues needed to ensure a successful and valuable full-scale
    research program. Beginning in 2017, all eligible researchers will have
    an opportunity to participate by submitting a formal research proposal.
    We are actively working on the pilot phase of the program with the
    Federal Reserve Board. Partially based on what we learn from the pilot
    program, we expect to publish additional information about how
    individual researchers can participate next year.
                        iv. enterprise complaint system
        Question 24. Will the Department or FSA release annual reports on
    complaints submitted to the new complaint system? If so, will these
    reports identify the number of complaints submitted by servicer and
    nature of the complaint?
        Answer 24. FSA will release annual reports submitted to the FSA
    Feedback System, as required by the Student Aid Bill of Rights.
    Although the Student Aid Bill of Rights requires FSA to publish its
    initial report in October 2017, FSA plans to publish its initial report
    in November 2016. FSA does expect these reports to include data on the
    number of complaints submitted by servicer, as well as the nature of
    such complaints.

        Question 25. Will FSA ensure that every single complete complaint
    gets immediately sent to the Federal Trade Commission's Sentinel?
        Answer 25. FSA is working with the Federal Trade Commission (FTC)
    to finalize the process by which complaints are sent to the FTC's
    Consumer Sentinel system.

        Question 26. How will FSA ensure that servicers, debt collectors,
    schools, and other Department contractors are resolving complaints and
    are accountable to students and borrowers? What is FSA's quality
    assurance process?
        Answer 26. FSA staff has access to all correspondence between
    complainants and servicers, debt collectors, and other Department
    contractors. This provides an unprecedented level of oversight over the
    complaint resolution activities of such entities.
        System management teams perform quality assurance on all lines of
    business within the feedback system, including review of
    correspondence, categorization, routing, and resolution for adherence
    to quality standards. Responses or resolutions that do not meet quality
    standards are re-opened for a second resolution, and action is taken
    regarding the responsible party--whether an FSA employee or a
    contractor--as warranted.
        The newly created Enforcement Unit will regularly monitor
    complaints against IHEs in furtherance of investigations of possible
    violations of the title IV regulations.

        Question 27. Will the complainant have direct access to all
    correspondence and information associated with his or her complaint
    through the system? Will the complainant be able to read a servicer,
    debt collector, or school's response and associated information?
        Answer 27. During case submission, complainants are asked whether
    they prefer to be contacted via email or via phone. Correspondence with
    the complainant is managed according to the complainant's preference.
        Servicers and debt collectors may respond directly to complainants
    regarding complaints; as a result, complainants are able to directly
    read responses from these organizations to them. Schools do not respond
    directly to complainants regarding complaints; they respond to
    employees within FSA's Program Compliance unit. In this case, the
    Program Compliance team relays the information to the complainant.

        Question 28. Will FSA ensure that all complainants are asked
    whether they are satisfied with the resolution of their complaints, and
    will complaints from unsatisfied borrowers be reviewed by staff? Will
    complaints be kept open until they are resolved and the complainant is
    satisfied?
        Answer 28. Complainants who log in with their FSA ID are asked
    whether they are satisfied with the resolution of their complaint, and
    to rate their complaint satisfaction on a 1-5 scale. Any complainant
    (FSA ID-authenticated or not) who responds to the email detailing their
    case resolution triggers a flag for an FSA employee to review their
    case, who is able to re-open or provide additional information if
    warranted.

        Question 29. Will students and borrowers who file complaints know
    exactly what to expect from the Feedback system? Does FSA plan to
    release a public guide to detail the life cycle of complaints and
    suspicious activity reports, and who is responsible at what stage?
        Answer 29. Students and borrowers who file complaints are provided
    information regarding exactly what to expect from the Feedback System.
    For example, they are told that FSA expects to respond to complaints
    within 15 days and resolve complaints within 60 days in most cases, a
    timeframe in alignment with Federal best practices.

        Question 30. Will the Department or FSA release annual reports on
    complaints submitted to the new complaint system? What information and
    will be contained in FSA's October 2016 report about the Feedback
    system? If so, will these reports identify the number of complaints
    submitted by service and nature of the complaint?
        Answer 30. FSA is currently designing the October 2016 report. The
    report will include the number of complaints submitted by servicer, as
    well as the nature of such complaints.
                                v. other issues
        Question 31. What is the Department's current practice regarding
    public access to servicing contracts? Specifically, does the Department
    make public the contracts and guidance, as well as any modifications to
    contracts? Please provide a copy of the contract or contractual
    modification with MOHELA to provide borrower defense assistance,
    including a description of the parameters, requirements of this
    contract, financial incentives, and whether these documents are public.
    If these documents are not public, then please explain why not. Please
    provide a copy of the guidance.
        Answer 31. Servicing contracts and major modifications are posted
    publicly at: https://www.fbo.gov/spg/ED/FSA/CA/FSA-TitleIV-09/
    listing.html.
    https://www.fbo.gov/spg/ED/FSA/CA/NFP-RFP-2010/listing.html.
        Given the large volume of modifications and guidance issued, much
    of which is administrative in nature and all of which would need to be
    reviewed and redacted prior to posting, that information is not
    typically shared with the public.

        Question 32a. Institutions of higher education are required to meet
    certain standards of financial responsibility. The Department
    determined that Corinthian Colleges had a financial composite score of
    0.9 for fiscal year 2011, which fell below the minimum required
    financial composite score. However, the Department's student loan bank
    did not require any letter of credit to protect against losses to the
    taxpayers. Why did the Department decline to order Corinthian to
    produce a letter of credit? Please provide all documents and memoranda
    related to this decision.
        Answer 32a. CCI failed its financial composite score in fiscal year
    2011, and ED required an LOC; however, over the subsequent year, CCI
    appealed this score, delaying the remittance of an LOC. At the
    conclusion of this appeal, ED determined CCI failed in fiscal year
    2011, but registered a passing score in fiscal year 2012, which would
    have released any LOC back to CCI. Specifically, on October 31, 2012,
    the Department notified Corinthian Colleges (CCI) that its fiscal year
    2011 audited financial statements indicated a failing composite score.
    That triggered the requirement to remit a Letter of Credit to the
    Department in the amount of $175 million within 75 days of the date of
    the correspondence (see Department correspondence dated October 31,
    2012). CCI requested in correspondence dated November 2, 2012, and
    November 12, 2012, that the institution be permitted additional time to
    make a determination on the LOC request. Furthermore, CCI requested a
    meeting to discuss the basis for the financial determination and
    referenced letters from two financial experts essentially disputing the
    manner in which the department treats ``goodwill impairment'' in its
    financial composite scores (see CCI correspondence dated November 2,
    2012 and November 12, 2012). To fairly consider the claims made by CCI
    and ensure the veracity of the Department's approach, the Department
    contracted with an accounting firm (Deloitte) to independently evaluate
    its methodology for conducting financial analysis and the treatment of
    items in the composite score ratios such as ``goodwill impairment.''
        During the period of contract award and Deloitte's subsequent
    analysis and recommendations (see ``Deloitte'' attachments)--spanning
    December 2012 through May 2013--the Department and CCI continued to
    discuss the request for a LOC request dated October 31, 2012. In a
    letter dated December 11, 2012, the Department noted that while it was
    considering the issues CCI raised in its November 2012 letters, the LOC
    remission date would be extended to essentially 10 days after the
    Department's official response to the November 2012 letters from CCI
    (see Department correspondence dated November 11, 2012. In addition,
    the Department requested additional information on various matters
    related to CCI's financial status which resulted in the institution's
    response dated December 24, 2012 (see CCI correspondence and
    attachments dated December 24, 2012).
        On August 16, 2013, the Department's Chief Compliance Officer,
    Robin Minor issued correspondence to CCI executives upholding the
    determination that CCI had failing financial composite score of 0.9 for
    fiscal year 2011 but passing composite score of 1.5 for fiscal year
    2012 (see Department correspondence dated August 16, 2013). The August
    2013 correspondence rendered any LOC remitted for a failed composite
    score for fiscal year 2011 irrelevant in this case. This is due to the
    fact that any LOC remitted in relation to the failed composite score
    for fiscal year 2011 would have had to be relinquished due to the
    passing score calculated for fiscal year 2102.

        Question 32b. Who at the Department's student loan bank made the
    final decision not to order the letter of credit?
        Answer 32b. FSA's Program Compliance Office, FSA's Chief Operating
    Officer, and the Department's Office of the General Counsel were
    involved in these decisions.

        Question 32c. How much does the Department expect taxpayers in
    closed school discharge and borrower defense claims because the bank
    failed to order a letter of credit from Corinthian?
        Answer 32c. The June 29, 2016, release from Joseph Smith, Special
    Master for Borrower defense (BD), reported that the Department had
    approved 3,787 BD claims by former CCI students, with an aggregate loan
    amount of $73,110,502. In addition, as of June 24, 2016, closed school
    loan relief has been granted to 7,386 CCI students, with an aggregate
    outstanding principal of $97,613,625. The Department has calculated
    that its potential exposure to CCI closed school discharge claims is
    approximately $200 million. The total amount of borrower defense relief
    that may be granted to former CCI students depends on the total number
    of applications from eligible borrowers. As we reported in the last
    Special Master report, the Department has granted more than $73 million
    in borrower defense relief. We are continuing to receive more
    applications from CCI students, and we are continuing our outreach to
    potentially eligible students.

        Question 33a. With respect to borrower defense, is the Department
    planning to publicly issue guidance regarding how FFEL borrowers can
    apply for borrower defenses? If so, what is the timeline and how will
    this guidance be made public?
        Answer 33a. Yes. In the coming months, the Department will provide
    additional guidance on its Web site to clarify that a FFEL borrower can
    apply for borrower defense upon consolidating their FFEL loans into
    Direct Consolidation Loans. The Department will further explain that
    prior to consolidation; the Department will provide FFEL borrowers with
    the opportunity to obtain a pre-determination with respect to whether
    they are eligible for relief under the Direct Loan borrower defense
    regulations.

        Question 33b. Do you believe guidance for FFEL loan holders to
    grant forbearances to FFEL borrowers who apply for defense to repayment
    is necessary or can FFEL loan holder currently grant forbearances?
        Answer 33b. While FFEL loan holders have discretion in determining
    when to grant forbearance, the Department is developing guidance to
    clarify that loan holders can grant forbearance to borrowers who apply
    for relief based on a borrower defense claim. The Department will
    provide such guidance in the form of a Dear Colleague Letter. This
    guidance will clarify that the Department will contact FFEL loan
    holders to request that they grant forbearance to FFEL borrowers with
    pending defense to repayment claims. Moreover, the proposed borrower
    defense rule published in June would also provide that FFEL loan
    holders will be required to place loans in forbearance when the
    Department makes such a request.

        Question 33c. Do you plan to issue guidance on this topic?
        Answer 33c. Yes, the Department will issue guidance in the above-
    referenced Dear Colleague Letter in the coming months.

        Question 34. In my February 2016 Questions for the Record, I asked
    you to ``please provide the guidance that the Department currently
    gives student loan servicers regarding borrower defense discharges,
    closed school discharges, and other student loan discharges.'' You said
    your staff would ``be pleased to further discuss our guidance to
    student loan servicers'' in a meeting with my staff. Months later, my
    staff has never seen such guidance. Does the Department provide
    guidance to student loan servicers regarding borrower defense
    discharges? If not, then why not? If so, then please provide the
    guidance.
        Answer 34. On June 1, 2015, the Department notified all servicers
    of an impending announcement (subsequently issued on June 8, 2015)
    regarding Borrower defense to Repayment. This announcement explained
    that under law certain borrowers would be eligible for full or partial
    discharge of their student loans based on different scenarios involving
    the school they attended. Servicers were informed that borrowers could
    begin this process by providing information directly to the Department,
    that a call center would be prepared to provide support, and that
    servicers would be asked to apply administrative forbearances to
    borrower accounts while the Department completed the review process.
    Such forbearances were to be non-interest capping, applied to the
    borrower's account within 5 days, and designed to cover any existing
    delinquency, plus a period covering the next 12 months. Information
    regarding the borrower defense program was also posted on the
    studentaid.ed.gov Web site and we prepared servicers to assist
    borrowers with closed school loan discharges.
        Servicers were also provided with an internal guide entitled
    ``Borrower defense in a Nutshell,'' which was designed to explain the
    history of borrower defense, prepare servicers for a significant
    increase in applications from borrowers seeking relief, and outline
    various resources available to borrowers to assist them in the
    application process. Further, the Department provided a Question and
    Answer document (with multiple updates) for servicers to share with
    their customer service representatives to assist them in correctly
    responding to borrower questions on borrower defense. Copies of these
    documents are provided in the attachments to this response.
        The Department established a dedicated Web site as the primary
    location for borrowers to obtain information on debt relief and apply
    for administrative forbearances. This Web site was located at: https://
    studentaid.ed.gov/sa/about/announcements/corinthian.
        In addition, a borrower defense ``Hotline'' was set up to help
    borrowers understand and exercise their options. Servicers were advised
    of the hotline number--(855) 279-6207--and the hours of availability
    (Monday-Friday from 8 a.m. to 8 p.m. Eastern time). One of the
    Department's Federal servicers was then selected to operate the call
    center and also set up a Web site to receive forbearance requests from
    borrowers who attended CCI.
        Specific to CCI, as schools were closing the Department provided
    prompt closure notifications to servicers and required them to
    implement customary closed school procedures, which includes
    proactively reaching out to impacted borrowers to assist them in
    completing closed school discharge requests. To track the volume of
    closed school applications and borrower defense inquiries, the
    Department required servicers to submit a weekly report with
    information specific to CCI students, which enabled the observation of
    trends, assisted in the development of initiatives, and also informed
    decisions related to CCI and borrower defense.
        More broadly, we have instructed servicers to refer borrowers
    inquiring about borrower defense to our Web site or instruct them to e-
    mail the Department. The servicers send the Department borrower
    applications or correspondence indicating the student was harmed by
    actions or failures to act by a school. That is the case whether or not
    the inquirer uses the exact terms ``borrower defense'' or ``defense to
    repayment.''
        In addition, the Department took the lead in notifying CCI students
    of their potential eligibility for discharge by initiating a borrower
    defense email campaign. More than 325,000 CCI students received these
    messages, which encouraged them to apply for discharge through the
    studentaid.ed.gov/Corinthian Web page, contact FSA's Hotline, or review
    information contained on ED's blog post ``For Corinthian Colleges
    Students: What You Need to Know about Debt Relief.''

        Question 35. What is the status of the PCA contracts, and how do
    these contracts interact with the servicing re-compete (if at all)?
        Answer 35. Proposals under the PCA solicitation are still under
    review; this process is completely separate from the servicing
    solicitation.
        See the solicitation notice here: https://www.fbo.gov/
    index?s=opportunity&mode=
    form&id=2fc9caba34a9c5f65fb9eb37550df06a&tab=core&_cview=1.

        Question 36a. Last year, my office published a report detailing its
    investigation of the flawed reviews conducted by the Department's
    student loan bank. I am pleased that the Department is prohibiting the
    bank from conducting the review and is instead retaining an independent
    firm.\11\ What error rate would exceed the Department's tolerance level
    and lead to termination of the contract?
    ---------------------------------------------------------------------------
        \11\ http://www.warren.senate.gov/files/documents/
    SCRA_ED_Report_August2015.pdf.
    ---------------------------------------------------------------------------
        Answer 36a. The Department signed a contract on August 19, 2016,
    with an external vendor to conduct the audit. The review does not
    establish a specific error rate as the Department believes it is not
    prudent to pre-determine a specific threshold. Rather, the Department
    believes it is important to be able to determine the specific elements
    of the violations to determine if action should be taken.

        Question 36b. Will the Department publicly release this error rate
    prior to conducting the review?
        Answer 36b. The Department expects to release the results of the
    findings of the independent auditor.

        Question 36c. Will the Department's student loan bank's executives
    be prohibited by the Secretary to determine any sanctions?
        Answer 36c. Senior management within the Department, including
    representation from the Acquisitions Office, will be involved in
    determining any appropriate actions.

        [Editor's Note: Due to the high cost of printing and the large
    volume of supplemental materials submitted, the materials are
    maintained on cd's in the committee file.]
        [Whereupon, at 11:49 a.m., the hearing was adjourned.]

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