[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
CHALLENGES AND OPPORTUNITIES IN HIGHER EDUCATION
=======================================================================
6HEARING
before the
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, FEBRUARY 7, 2017
__________
Serial No. 115-3
__________
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COMMITTEE ON EDUCATION AND THE WORKFORCE
VIRGINIA FOXX, North Carolina, Chairwoman
Joe Wilson, South Carolina Robert C. ``Bobby'' Scott,
Duncan Hunter, California Virginia
David P. Roe, Tennessee Ranking Member
Glenn ``GT'' Thompson, Pennsylvania Susan A. Davis, California
Tim Walberg, Michigan Raul M. Grijalva, Arizona
Brett Guthrie, Kentucky Joe Courtney, Connecticut
Todd Rokita, Indiana Marcia L. Fudge, Ohio
Lou Barletta, Pennsylvania Jared Polis, Colorado
Luke Messer, Indiana Gregorio Kilili Camacho Sablan,
Bradley Byrne, Alabama Northern Mariana Islands
David Brat, Virginia Frederica S. Wilson, Florida
Glenn Grothman, Wisconsin Suzanne Bonamici, Oregon
Steve Russell, Oklahoma Mark Takano, California
Elise Stefanik, New York Alma S. Adams, North Carolina
Rick W. Allen, Georgia Mark DeSaulnier, California
Jason Lewis, Minnesota Donald Norcross, New Jersey
Francis Rooney, Florida Lisa Blunt Rochester, Delaware
Paul Mitchell, Michigan Raja Krishnamoorthi, Illinois
Tom Garrett, Jr., Virginia Carol Shea-Porter, New Hampshire
Lloyd K. Smucker, Pennsylvania Adriano Espaillat, New York
A. Drew Ferguson, IV, Georgia
Brandon Renz, Staff Director
Denise Forte, Minority Staff Director
C O N T E N T S
----------
Page
Hearing held on February 7, 2017................................. 1
Statement of Members:
Foxx, Hon. Virginia, Chairwoman, Committee on Education and
the Workforce.............................................. 1
Prepared statement of.................................... 3
Scott, Hon. Robert C. ``Bobby'', Ranking Member, Committee on
Education and the Workforce................................ 4
Prepared statement of.................................... 6
Statement of Witnesses:
Akers, Dr. Beth, Senior Fellow, Manhattan Institute, New
York, NY................................................... 9
Prepared statement of.................................... 12
Cruz, Dr. Jose L., President, Lehman College of the City
University of New York, Bronx, NY.......................... 27
Prepared statement of.................................... 29
Gilligan, Mr. Kevin, Chairman and Chief Executive Officer,
Capella Education Company, Minneapolis, MN................. 39
Prepared statement of.................................... 41
Kirwan, Dr. William E., Co-Chair, Task Force on Federal
Regulation of Higher Education, Rockville, MD.............. 18
Prepared statement of.................................... 20
Additional Submissions:
Bonamici, Hon. Suzanne, a Representative in Congress from the
State of Oregon:
Prepared statement of.................................... 94
Davis, Hon. Susan A., a Representative in Congress from the
State of California:
Prepared statement of.................................... 96
Rooney, Hon. Francis, a Representative in Congress from the
State of Florida:
Article: UV Letters...................................... 80
Scott, Hon. Robert C. ``Bobby'', a Representative in Congress
from the State of Virginia:
Letter February 21, 2017, from The George Washington
University............................................. 102
Takano, Hon. Mark, a Representative in Congress from the
State of California:
Letter February 2, 2017, from Sixteen Organizations...... 77
Prepared statement of.................................... 105
Questions submitted for the record by:
Ms. Bonamici............................................. 116
Messer, Hon. Luke, a Representative in Congress from the
State of Indiana....................................... 110
Roe, Hon. David P., a Representative in Congress from the
State of Tennessee...................................108, 121
Mr. Scott..............................................111, 114
Stefanik, Hon. Elise, a Representative in Congress from
the State of New York.................................. 108
Thompson, Hon. Glenn ``GT'', a Representative in Congress
from the State of Pennsylvania.......................108, 119
Response to questions submitted:
Dr. Akers................................................ 122
Dr. Cruz.....................................111, 114, 116, 124
Dr. Kirwan............................................... 128
Mr. Gilligan............................................. 126
CHALLENGES AND OPPORTUNITIES IN HIGHER EDUCATION
----------
Tuesday, February 7, 2017
House of Representatives,
Committee on Education and the Workforce,
Washington, D.C.
----------
The committee met, pursuant to call, at 10:30 a.m., in Room
2175, Rayburn House Office Building, Hon. Virginia Foxx
[chairwoman of the committee] presiding.
Present: Representatives Foxx, Hunter, Walberg, Guthrie,
Rokita, Messer, Byrne, Bishop, Grothman, Stefanik, Allen,
Lewis, Rooney, Mitchell, Smucker, Ferguson, Scott, Davis,
Courtney, Fudge, Polis, Wilson of Florida, Bonamici, Takano,
Adams, DeSaulnier, Norcross, Blunt Rochester, Krishnamoorthi,
Shea-Porter, and Espaillat.
Staff Present: Emmanual Guillory, Professional Staff
Member; Tyler Hernandez, Deputy Communications Director; Amy
Raaf Jones, Director of Education and Human Resources Policy;
Nancy Locke, Chief Clerk; Dominique McKay, Deputy Press
Secretary; James Mullen, Director of Information Technology;
Krisann Pearce, General Counsel; Jenny Prescott, Professional
Staff Member; Brandon Renz, Staff Director; Alex Ricci,
Legislative Assistant; Emily Slack, Professional Staff Member;
Alissa Strawcutter, Deputy Clerk; Tylease Alli, Minority Clerk/
Intern and Fellow Coordinator; Jacque Chevalier, Minority
Deputy Education Policy Director; Michael DeMale, Minority
Labor Detailee; Denise Forte, Minority Staff Director; Mishawn
Freeman, Minority Staff Assistant; Christian Haines, Minority
Education Policy Counsel; Stephanie Lalle, Minority Press
Assistant; Arika Trim, Minority Press Secretary; Katherine
Valle, Minority Education Policy Advisor; and Christopher
Zbrozek, Minority Education Detailee.
Chairwoman Foxx. Good morning, everyone. A quorum being
present, including Duncan Hunter, the Committee on Education
and the Workforce will come to order. We're delighted to have
everyone here. I want to welcome everyone to today's hearing on
America's higher education system.
These are exciting times in higher education. Institutions
across the country are providing their students new
opportunities to earn a degree. As a result, we're seeing more
diversity on campuses and the idea of a traditional student has
been turned on its head. Today's students come from a wide
range of backgrounds, they are at various stages in their lives
and careers, and they have new, unique, and changing needs.
Perhaps the only thing that hasn't changed in recent years
is the importance of a higher education. A post-secondary
degree or certificate is still vitally important to helping
individuals pursue successful and fulfilling careers. It is
also essential in helping many men and women achieve their own
dreams and goals and earn success in their lives.
Thankfully, today there are more opportunities for more
0individuals to pursue higher education than ever before.
However, America's higher education system is also facing a
number of significant challenges.
For one, the cost of college is going up. Since 2005,
average tuition and fees have increased by 25 percent at 4-year
private nonprofit institutions. At 4-year public institutions,
they've increased by more than 40 percent.
And what do we have to show for that rise in cost? Have
graduation rates gone up? Actually, it's estimated that among
students who started colleges in the fall of 2010, only 55
percent had earned a degree or certificate by 2016.
We've worked in recent years to make changes that will
strengthen America's higher education system and help ensure a
college degree is accessible and affordable. It's clear that
more has to be done.
Fortunately, with reauthorization of the Higher Education
Act, we have an opportunity to do just that -- advance bold,
responsible, and meaningful reforms. We also have a strong
foundation already in place.
Through years of hearings, roundtables, meetings, and
legislation action, this committee, including many of the
members here today, developed a set of principles that will
guide the work ahead.
The first is empowering students and families to make
informed decisions. Choosing a college or university is an
important decision that will have a lasting impact on a
student's life. It's vitally important that individuals have
the information they need to choose the right school and make
decisions about how to pay for their education.
The second principle is simplifying and improving student
aid. There are currently 6 different types of Federal student
loans, 9 repayment plans, 8 forgiveness programs, and 32
deferment and forbearance options, each with its own rules and
regulations. The current system is too complex and it leaves
students and their families confused about their financial
options and responsibilities.
Third, we must work to promote innovation, access, and
completion. For years, and particularly in the past 8 years,
the Federal Government has tied States and institutions up in
red tape. That red tape has made it more difficult for students
to complete their education quickly and affordably. It has also
gotten in the way of innovation that would make it easier for
students to pursue and earn a college degree. It's time for the
Federal Government to get out of the way.0
The fourth and final principle is providing strong
accountability in a limited Federal role. Today, institutions
are subject to a great deal of Federal reporting requirements
and regulations. In fact, rules and regulations across the
Federal Government currently impose an estimated $27 billion in
compliance costs on colleges and universities. Unfortunately,
those costs are often passed on to students in the form of
higher fees and tuition.
We need to repeal unnecessary reporting requirements and
address many of the harmful and misguided regulations imposed
by the former administration. However, we should do so while
also delivering strong, commonsense accountability in Federal
programs.
It's clear that we have our work cut out for us, but
inaction is not an option. Today marks the beginning of the
next phase in our effort to strengthen America's higher
education system for students, parents, institutions, and
taxpayers. I look forward to the important work that lies
ahead. Let's get to work.
With that, I yield to Ranking Member Scott for his opening
remarks.
[The statement of Chairwoman Foxx follows:]
Prepared Statement of Hon. Virginia Foxx, Chairwoman, Committee on
Education and the Workforce
These are exciting times in higher education. Institutions across
the country are providing their students new opportunities to earn a
degree. As a result, we are seeing more diversity on campuses, and the
idea of a ``traditional student'' has been turned on its head. Today's
students come from a wide range of backgrounds. They are at various
stages in their lives and careers. And they have new, unique, and
changing needs.
Perhaps the only thing that hasn't changed in recent years is the
importance of a higher education. A postsecondary degree or certificate
is still vitally important to helping individuals pursue successful and
fulfilling careers. It is also essential in helping many men and women
achieve their own dreams and goals and earn success in their lives.
Thankfully, today there are more opportunities for more individuals
to pursue higher education than ever before. However, America's higher
education system is also facing a number of significant challenges.
For one, the cost of college is going up. Since 2005, average
tuition and fees have increased by 25 percent four-year private
nonprofit institutions. At four-year public institutions, they have
increased by more than 40 percent.
What do we have to show for that rise in costs? Have graduation
rates gone up?
Actually, it is estimated that among students who started colleges
in the fall of 2010, only 55 percent had earned a degree or certificate
by 2016.
We've worked in recent years to make changes that will strengthen
America's higher education system and help ensure a college degree is
accessible and affordable. It's clear that more has to be done.
Fortunately, with reauthorization of the Higher Education Act, we
have an opportunity to do just that--advance bold, responsible, and
meaningful reforms. We also have a strong foundation already in place.
Through years of hearings, roundtables, meetings, and legislative
action, this committee--including many of the members here today--
developed a set of principles that will guide the work ahead.
The first is empowering students and families to make informed
decisions. Choosing a college or university is an important decision
that will have a lasting impact on a student's life. It's vitally
important that individuals have the information they need to choose the
right school and make decisions about how to pay for their education.
The second principle is simplifying and improving student aid.
There are currently six different types of federal student loans, nine
repayment plans, eight forgiveness programs, and 32 deferment and
forbearance options--each with its own rules and requirements. The
current system is too complex, and it leaves students and their
families confused about their financial options and responsibilities.
Third, we must work to promote innovation, access, and completion.
For years--and particularly in the past eight years--the federal
government has tied states and institutions up in red tape. That red
tape has made it more difficult for students to complete their
education quickly and affordably. It has also gotten in the way of
innovation that would make it easier for students to pursue and earn a
college degree. It's time for the federal government to get out of the
way.
The fourth and final principle is providing strong accountability
and a limited federal role. Today, institutions are subject to a great
deal of federal reporting requirements and regulations. In fact, rules
and regulations across the federal government currently impose an
estimated $27 billion in compliance costs on colleges and universities.
Unfortunately, those costs are often passed on to students in the form
of higher fees and tuition.
We need to repeal unnecessary reporting requirements and address
many of the harmful and misguided regulations imposed by the former
administration. However, we should do so while also delivering strong,
commonsense accountability in federal programs.
It's clear that we have our work cut out for us, but inaction is
not an option. Today marks the beginning of the next phase in our
effort to strengthen America's higher education system for students,
parents, institutions, and taxpayers. I look forward to the important
work that lies ahead. Let's get to work.
______
Mr. Scott. Thank you, Madam Chair.
And I thank the witnesses for coming. I look forward to
your testimony.
Today's hearing is an opportunity to hear directly from
different sectors and voices within the higher education
community. It's important for us to continue to work with a
diverse array of leaders who will inform the development of
research-backed policy solutions as the committee works to
reauthorize the Higher Education Act.
Madam Chair, during the last Congress, our committee
enjoyed bipartisan cooperation on a number of issues -- Every
Student Succeeds Act, juvenile justice, career and technical
education, even several bipartisan higher education bills. I
think there is room for more bipartisan collaboration in higher
education, and
in the past, we've come together to produce bipartisan
higher education bills to address specific issues. This past
success does not mean that the process of a higher education
reauthorization will be smooth and straightforward, but I'm
committed to working with you. Let's see if we can't get that
done.
And to that end, the House Democrats remain focused on
ensuring that the Higher Education Act continues to provide
pathways for a better life. Quality higher education must be
accessible and affordable to empower America's working families
to succeed in our economy, and that means improving the system
to work for all students and families.
That was a promise made by President Lyndon Johnson when he
signed the Higher Education Act into law in 1965. He said then
that this means that a high school senior anywhere in this
great land of ours can apply to any college or any university
in any of the 50 States and not be turned away because his
family is poor.
Unfortunately, for too many working families, the promise
of the HEA has eroded. For too many of our students, access to
economic opportunity provided through higher education is, in
fact, in jeopardy.
Faced with borrowing substantial sums of money in order to
enroll, higher education feels out of reach or not worth the
cost for too many students. This inequity of opportunity serves
to limit lifetime prospects, especially for low-income
students, first-generation students, and students with
disabilities.
Any action we take in this Congress on higher education
should increase the number of students who attend college,
lower the cost of those that do, and help students complete a
meaningful degree, on time, that will have value in the job
market. The logical place to start is a renewed focus on
institutions of higher education that enroll 75 percent of the
students, that is, 2- and 4-year public colleges. These schools
are the only higher education options in many communities and
they have a track record of adapting to meet the educational
needs of their communities and serving as engines of mobility
into higher-income careers. Unfortunately, we've seen a
disturbing trend of State support dwindling over the past few
years.
Democrats remain committed to a higher education system
that has multiple pathways to obtaining a meaningful credential
that is not necessarily a 4-year on-campus degree, but we
remain committed to protecting access to the 4-year on-campus
degree for any person qualified and desiring one. That will
likely take sustained increased investment and resources.
And while I understand that many members claim we don't
have the money to commit to higher education, I would counter
that taxpayer money spent on higher education is a vital
investment in our Nation's security and workforce. We live in a
global economy where education remains one of the best
competitive advantages that we have, and we can't lose that
advantage by failing to invest in education.
As the richest country in the world, we have resources to
ensure that all students have access to multiple high-quality
higher educational opportunities. We can increase the maximum
Pell Grant award. We can provide funds to help schools create
supports needed to accelerate completion. We can support the
important work done at our Historically Black Colleges and
Universities and other minority-serving institutions. We can
devise loan repayment and forgiveness options that allow
student borrowers to repay their loans without surrendering
their economic freedom.
We can do all these things, but we have to make them within
a system of priorities. You'll remember, Madam Chair, that in
2013, Congress renewed the Bush-era tax cuts at a cost of $3.9
trillion, including significant benefits for the top 1 percent.
The next couple of weeks, we actually raised the interest on
Federal student loans. We gave tax breaks to millionaires and
billionaires and then charged poor students more to borrow
money to go to college.
If the American people want our higher education system to
remain the envy of the world, we can't do it on the cheap. That
means we have to have a priority to find solutions that promote
sustained investments at both the Federal and state levels.
Unfortunately, some higher education institutions fail to
deliver on quality education. And so to protect the robust and
sustained public investment, we need a strong triad of Federal
regulation, State authorization, and private accreditation to
guarantee institutional and program quality. All three play
essential and necessary roles in ensuring the fitness of our
higher education system.
Federal regulations protect the sizeable investment of
higher education and provide consumer protections for students
themselves. State authorizers, those closest to the students,
must be a check to ensure that local actors provide quality
instruction that is best suited for students in that State.
Accreditors must be skilled arbiters of quality education.
We will likely need to assess the duties of all three legs
of this triad in a comprehensive reauthorization, but if we're
going to protect students and taxpayers effectively, I think we
need to realize that deregulation for the sake of deregulation
doesn't make any sense.
Going to and graduating from college remains one of the
most consistent methods for eliminating many barriers to upward
mobility facing millions of Americans. Look at President Obama,
raised by a single working mother and her family, parlayed his
college education into a successful career, leading all the way
to the Oval Office.
Similarly, Madam Chair, you know the power higher education
has to change lives, because you dedicated large portions of
your life to the pursuit of higher education and its
improvement.
One of the members of our committee, the gentleman from New
Jersey, Mr. Norcross, a new member of the committee, got his
start in higher education at a community college before moving
on to what he calls the other 4-year degree, an apprenticeship
with the International Brotherhood of Electrical Workers.
All of these examples show what can be achieved when
deserving students have the opportunity of a post-secondary
education. They and many others like them prove that the
opportunities opened by college are limitless. New models that
provide skills necessary to succeed in today's global economy
may have the potential to be the engines of upward mobility in
the future.
But if we focus solely on economic outcomes to write higher
education policies and fail to look at the intangible benefits
of higher education, we may be missing a lot of opportunities
for many people.
A 4-year degree may not be for everyone, but it should be
available to all who are academically qualified to attend and
wish to pursue it. Protecting that access while incentivizing
new models that serve today's students will make higher
education work for all of America's working families.
Thank you, Madam Chairman. I yield back.
[The statement of Mr. Scott follows:]
Prepared Statement of Hon. Robert C. ``Bobby'' Scott, Ranking Member,
Committee on Education and the Workforce
Good morning Chairwoman Foxx, and members of the Committee. To the
witnesses, thank you for being here, I look forward to your testimony.
Today's hearing is an opportunity to hear directly from different
sectors and voices within the higher education community. It's
important for us to continue to work with a diverse array of leaders
who will inform the development of research-backed policy solutions as
the committee works to reauthorize the Higher Education Act.
During the last Congress our committee enjoyed bipartisan
collaboration on issues from ESSA to CTE and even on some discrete
bipartisan higher education bills. I think there is room for more
bipartisan collaboration in higher education, and in the past we have
come together to produce bipartisan higher education bills addressing
specific policy issues. That past success does not mean that the
process of a comprehensive reauthorization will be a smooth and
straight forward path, but I am committed to working with you, Madam
Chairwoman, over the course of this Congress to see if we can get to a
comprehensive bill.
To that end, House Democrats remain focused on ensuring that the
Higher Education Act continues to provide pathways to a better life for
all Americans. Quality higher education must be accessible and
affordable to empower America's working families to succeed in our
economy. That means improving the system to work for all students and
families.
That promise was made when President Lyndon Johnson singed HEA into
law in 1965. He said, ``[This] means that a high school senior,
anywhere in this great land of ours, can apply to any college or any
university in any of the 50 states and not be turned away because his
family is poor.'' Unfortunately, for too many working families, the
promise of HEA has eroded. For far too many of our students, access
to economic opportunity provided through higher education is in
jeopardy.
Faced with borrowing substantial sums of money to enroll, higher
education feels out of reach or not worth the cost for many students.
This inequity of opportunity serves to limit lifetime prospects,
especially for low-income students, first-generation students, and
students with disabilities. Any action we take this Congress on higher
education should increase the number of students who attend college,
lower the cost for those who do, and help students complete a
meaningful degree on time that will have value in the job market.
A logical place to start is with a renewed focus on the
institutions of higher education that enroll 75 percent of students:
two- and four-year public colleges. These schools are the only higher
education options in many communities, and have a track record of both
adapting to meet the educational needs of their communities and serving
as engines of mobility into higher income careers.
Democrats remain committed to a higher education system that has
multiple pathways to attaining a meaningful credential that is not
necessarily a four-year on-campus degree, but we also remain committed
to protecting access to a four-year on campus degree for any person
qualified and desiring of one.
That will likely take a sustained, increased investment of
resources. And while I understand that many Members claim we don't have
the money to commit to higher education, I'd counter that taxpayer
money spent on higher education is a vital investment in our nation's
security and workforce. The globalization of the marketplace has
altered the way the U.S. and other countries compete for business. With
the rapid development of this global marketplace, the U.S. is no longer
the single dominant country in the world economy. And in our global
economy, the main competitive advantage we have in America is our
advantage in education. We certainly can't compete with other countries
when it comes to the lowest wages, when many around the world may work
for a few dollars or even a few pennies a day. Nor can we compete in
terms of location. You no longer have to be located near your co-
workers; with today's technology - video-conferencing, smartphones,
tablets -if you can work across the hall from your co-workers, you can
now work across the globe from your co-workers. Goods can be shipped
around the globe in a matter of days if not hours, so there's no
advantage for a manufacturer to build his factory near his customers.
No, the main reason that America remains strong and continues to
attract business investment is because we have well educated workers.
As the richest country on earth, we have the resources to ensure
that all students have access to multiple, high-quality higher
education opportunities. We can increase the maximum Pell Grant award.
We can provide funds to help schools create the supports needed to
accelerate completion. We can devise loan repayment and forgiveness
options that allow student borrowers to repay their loans without
surrendering their economic freedom.
We can do all those things, if we look at the fiscal decisions made
here in Washington in the collective, and not as individual choices. In
2013, Congress renewed the Bush-era tax cuts, including significant
benefits for the top one percent, and in the next week raised the
interest rate on federal student loans. We gave tax breaks to
millionaires and billionaires and then charged poor students more to
borrow money to go to college. If the American people want our higher
education system to remain the envy of the world, we can't do it on the
cheap. That means working to find policy solutions that promote
sustained investment at both the federal and state levels.
Unfortunately, some in higher education fail to deliver on a
quality education, and so, to protect the robust and sustained public
investment, we need a strong triad of federal regulation, state
authorization, and private accreditation to guarantee institutional and
program quality. All three play essential and necessary roles in
ensuring the fitness of our higher education system.
Federal regulations protect the sizable investment in higher
education, and provide consumer protections for students themselves.
State authorizers, closest to students, must be a check to ensure that
local actors provide quality instruction that is best suited for
students in that state. And accreditors must be skilled arbiters of
academic quality.
We will likely need to assess the duties of all three legs of the
triad in a comprehensive reauthorization. But if we are going to
protect students and taxpayers effectively, I think we need to realize
that blind deregulation in service of ideology can be as disastrous as
federal overreach and overregulation.
Going to and graduating from college remains one of the most
consistent methods for eliminating the many barriers to upward mobility
facing millions of Americans. Former President Obama, raised by a
single working mother and her family, parlayed his college education
into a successful career leading all the way to the Oval Office.
Similarly, you
Madam Chairwoman, know the power of quality higher education has to
change lives, having dedicated large portions of your life to the
pursuit of higher education and its improvement. Mr. Norcross, a new
member on this committee, got his start in higher education at a
community college, before moving on to what he affectionately calls the
``other 4-year degree'', an apprenticeship with the International
Brotherhood of Electrical Workers (IBEW).
Each of these individuals is an example of what can be achieved
when deserving students have access to a postsecondary education. They,
and many others like them, prove that the opportunities opened up by a
college education are limitless.
New models that provide the skills necessary to succeed in today's
global economy may have the potential to be engines of upward mobility
in the future. But, if we focus solely on economic outcomes to write
higher education policy, and fail to look at the intangible benefits of
higher education, we may be placing an insurmountable obstacle in front
of the academy door for thousands of students who are taking their
first step into higher education. A four-year college may not be for
everyone, but it should be available to all who are academically
qualified to attend and wish to pursue it. Protecting that access,
while incentivizing new models that serve today's students, will make
higher education work for all of America's working families. Thank you
Madam Chairwoman, I yield back.
______
Chairwoman Foxx. Thank you, Mr. Scott.
Pursuant to committee rule 7(c), all members will be
permitted to submit written statements to be included in the
permanent hearing record. And without objection, the hearing
record will remain open for 14 days to allow such statements
and other extraneous material referenced during the hearing to
be submitted for the official hearing record.
We'll now turn to introductions of our distinguished
witnesses.
Dr. Beth Akers is a senior fellow at the Manhattan
Institute. Previously, she was a fellow at the Brookings
Institution Center on Children and Families. Additionally, Dr.
Akers was a staff economist with the President's Council of
Economic Advisers under President George W. Bush, where she
worked on Federal student lending policy as well as other
education and labor issues.
Dr. William English ``Brit'' Kirwan currently serves as
chancellor emeritus of the University System of Maryland after
retiring from his 13-year chancellorship in 2015. During his
time as chancellor, he served as the co-chair of the Task Force
on the Federal Regulation of Higher Education. Before serving
as chancellor, Dr. Kirwan was the president of Ohio State
University for 4 years and of the University of Maryland
College Park, for 10 years.
Dr. Jose Luis Cruz is president of Lehman College of the
City University of New York, CUNY. Prior to his appointment at
CUNY, Dr. Cruz served at several institutions, including
California State University Fullerton and the University of
Puerto Rico system. Additionally, he was the vice president of
higher education policy and practice at the Education Trust in
Washington, D.C.
Mr. Kevin Gilligan serves as chairman and CEO of Capella
Education. Previously, he was president and CEO of United
Subcontractors, Inc., USI, a national construction services
firm, and president and CEO of Honeywell International's
second-largest business, Automation and Control Systems.
[Witnesses sworn.]
Chairwoman Foxx. Let the record reflect the witnesses
answered in the affirmative.
Before I recognize each of you to provide your testimony,
let me briefly explain our lighting system. We allow 5 minutes
for each witness to provide testimony. When you begin, the
light in front of you will turn green. When 1 minute is left,
the light will turn yellow. At the 5-minute mark, the light
will turn red, and you should wrap up your testimony. Members
will each have 5 minutes to ask questions.
Now, Dr. Akers, you are recognized for 5 minutes.
TESTIMONY OF DR. BETH AKERS, SENIOR FELLOW, MANHATTAN
INSTITUTE, NEW YORK, NY
Ms. Akers. Thank you. Good morning, Chairwoman Foxx,
Ranking Member Scott, and members of the Committee on Education
and the Workforce.
My name is Beth Akers. I'm a senior fellow at the Manhattan
Institute, where I research higher education policy. I've been
engaged in research in this field since 2008, when in my role
as staff economist at the Council of Economic Advisers, I
assisted the Department of Education as they quickly
implemented the Ensuring Continued Access to Student Loans Act.
My testimony is also informed by the time I spent
researching this subject, first as a Ph.D. student in the
economics department at Columbia University, then as a fellow
at Brookings, and now at the Manhattan Institute.
Perhaps among the most well-known facts about higher
education is that it's expensive and getting more so every
year. But it also pays large financial dividends, both to the
student in terms of heightened future wages and consistent
employment, and to society through greater tax revenue and
reduced reliance on social safety nets.
We should be concerned about the trajectory of college
costs, but we should also be concerned with building a system
of finance that supports students in making investments in
themselves, even in the current high-priced environment.
Student loans, which allow students to borrow from their
futures selves, are an invaluable tool for students to finance
investments they would not have otherwise been able to afford,
and they are a tool that works quite well for many borrowers.
My research shows that the typical borrower faces loan
balances that are modest compared to their lifetime earnings.
The large balances we often hear about in the media are, in
fact, exceedingly rare, with just 7 percent of young borrowers
with balances greater than $50,000 and 2 percent greater than
$100,000, and these large balances are most often held by
borrowers with advanced degrees that provide the opportunity
for very high earnings. The monthly expense of repaying these
burdens is also relatively small, with the average borrower
paying only about 7 percent of their monthly income on
repayment.
But those statistics aren't much of a consolation if you
are one of the unlucky students who paid the price for college
but saw no return. College is a gamble, it's always been a
gamble, but in the current high-cost marketplace, the
consequences of making a losing bet on college are bigger than
ever before.
We can't say exactly how many students end up underwater on
their student loans, but the fact that almost half of those who
start college degrees fail to complete them suggests that there
is a large pool of former students who will see little to no
return on their investment.
In addition to making it possible for young people to
borrow from their future to enroll in college, we also need to
ensure that adequate safety nets exist to support those who
don't experience the anticipated returns. In doing so, we
should recognize that it's not the high price of higher
education that's the first order problem, rather, it's that
some students will pay that price but never see a return.
Rather than using public resources to make college less
expensive across the board, Federal funds should be targeted to
encourage people to go to college who would not have gone
otherwise and to provide relief to those who made a losing
gamble on college.
As the committee considers reauthorization of the Higher
Education Act, I'd like to encourage you to consider two
primary challenges. The first is complexity in the Federal
student aid program. Our system of Federal financial aid is
needlessly complex, and research has shown that complexity is a
significant barrier to college enrollment for students from our
lowest-income households.
I believe there are three steps to simplifying our system
that are critical. First, rather than requiring potential
students to jump through hoops to find out how much they are
eligible for in aid, we should use data already collected by
the IRS to determine eligibility. We should do away with the
FAFSA, or at the very least make it much simpler to complete.
Second, we should eliminate the menu of options for student
loans and replace it with a single loan program with terms that
are easy to understand.
And third, we should put all student subsidies into a
single grant program. This means eliminating tax credits for
enrollment, deductions for student loan interest, and combining
all Federal grants into a single program. The goal of this
proposal is not to reduce subsidies necessarily, but rather to
make them more transparent and, therefore, more effective.
The second challenge that should be a priority as you
consider reauthorization is our malfunctioning student loan
repayment system and safety net. Many are surprised to learn
that our Federal student loan program has a robust system of
safety nets. This likely stems from the fact that there isn't a
single income-driven repayment plan, but rather a set of
programs, each with different eligibility requirements and
benefits, none of which are the default option for borrowers.
We need to do away with this malfunctioning system and
replace it with a universal income-driven repayment plan that
is the default repayment option for all borrowers. Ideally,
payment would be collected through income withholding so that
payments could automatically fluctuate with the borrower's
income.
Before closing, I'd like to offer quick remarks on the idea
of restoring private sector participation in Federal student
lending. Bringing market discipline into Federal student
lending isn't a bad idea, but a return to the FFEL program
would be a step in the wrong direction. There are good ways to
inject market discipline into student lending. The best
approach is to redesign the Federal lending program to focus on
undergraduate students. Scaling back or eliminating Federal
lending to graduate students and parents of college students
would organically create an opening for private lenders to
participate.
Another smart approach would be to support innovations in
the private education finance sector by establishing a
regulatory framework for new financial products, such as income
share agreements, which have the potential to address many of
the financial challenges currently facing students.
Thank you for the opportunity to address you today. I'm
very pleased that the committee is devoting its attention to
this issue, as a well-functioning system of higher education is
critical to our collective economic and social well-being. I
look forward to answering your questions today and serving as a
resource in the future.
[The testimony of Ms. Akers follows:]
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Chairwoman Foxx. Thank you, Dr. Akers.
Dr. Kirwan, you're recognized for 5 minutes.
TESTIMONY OF DR. WILLIAM E. KIRWAN, CO-CHAIR, TASK FORCE ON
FEDERAL REGULATION OF HIGHER EDUCATION, ROCKVILLE, MD
Mr. Kirwan. Good morning. I'm Brit Kirwan, chancellor
emeritus of the University System of Maryland. I want to thank
Chairwoman Foxx and Ranking Member Scott and the members of the
committee for the opportunity to speak about streamlining and
refocusing Federal regulations impacting higher education
today.
I'm here this morning to provide commentary on the report
of a commission created by four members of the Senate HELP
Committee: Chairman Lamar Alexander and Senators Barbara
Mikulski, Michael Bennet, and Richard Burr. The commission
consisted of 16 college and university presidents and
chancellors from across all sectors of higher education. I was
privileged to co-chair the commission with Nick Zeppos,
chancellor of Vanderbilt University.
The charge to the commission was to study and recommend
ways to reduce the Federal regulatory burden on colleges and
universities, while maintaining vitally important protections
for students, families, and taxpayers. We in higher education
recognize, with deep gratitude, the extraordinary fiscal
commitment the Federal Government makes to our enterprise.
Therefore, we recognize and embrace our obligation to be
transparent, responsible, and accountable stewards of taxpayer
money.
Through the task force's work, we learned that many
regulations are well developed to address critically important
issues and provide appropriate measures of institutional
accountability. On the other hand, we also discovered that too
many regulations are poorly framed, confusing, overly complex,
ill-conceived, or poorly executed.
The problem is exacerbated by the sheer volume of mandates,
rules and regulations, and subregulations. There are more than
4,000 pages of text in the Higher Education Act and related
documents. Placed on the floor, these pages would rise to a
height of between 4 and 5 feet. And the volume grows daily
since the Department of Education issues official guidance to
amend or clarify its rules at a rate of more than one document
sent to our institutions every working day throughout the year.
Over time, requirements have been layered upon
requirements, resulting in a tangle of regulations and an ever-
increasing cost of compliance, which, quite frankly, is a
factor driving rising tuitions and harming affordability
efforts.
This last point is very important. Clearly, all colleges
and universities, public and private, need to tighten their
belts, reduce costs wherever possible, and emphasize efficiency
in their operations, and this has been happening at
institutions across the country. The reality is that the cost
of regulations must either be passed on the students in the
form of higher prices or in a reduction of services to them.
The task force report highlighted 10 of the most
problematic regulations identified through our conversations
with stakeholders. In total, the full report identifies 59
unduly burdensome regulations with proposed streamlining
solutions. The Senate HELP Committee, I understand, reached
agreement on the vast majority of these recommendations.
I'm pleased to note that the House supported and the
Department has already moved forward to address one of our
recommendations, namely, the use of prior-prior tax data in the
student aid verification process.
In addition to looking at specific regulations of concern,
the task force also examined ways to improve the process by
which regulations are developed and implemented. Our report
contains several ideas for reforms in this area, and I will
highlight just two.
First, the Department should recognize when institutions
are acting in good faith. Very few violations of Federal
regulations are deliberate or reflect negligence by
institutions, nor are all violations equally serious.
For example, in the summer of 2014, the University of
Nebraska at Kearney was fined $10,000 for mistakenly
misclassifying a 2009 incident involving the theft of $45 worth
of goods from an unlocked custodian's closet as a larceny
rather than a burglary. Because the Clery Act does not require
the reporting of larceny, the university did not report the
incident on its annual security report. In an audit, the
Department ruled that the incident was a burglary, in the
Department's opinion, and fined the institution the $10,000.
Second, the Department should be required to act in a
timely manner when conducting program reviews and investigating
and resolving complaints. While institutions are required to
adhere to strict timelines in terms of responding to agency
requests, there's no time limits imposed on the Department in
terms of issuing a final determination after a program review.
By way of example, in May 2013, Yale University was ordered
to repay financial aid funds based on a Department of Education
audit undertaken in 1996. The repayment was in 2013. Taking
over 17 years to complete a program review and issue fines
should not be considered acceptable.
Again, I thank you for the opportunity to present some of
the task force's recommendations, and I look forward to your
questions.
[The testimony of Mr. Kirwan follows:]
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Chairwoman Foxx. Thank you very much, Dr. Kirwan.
Dr. Cruz, you're recognized for 5 minutes.
TESTIMONY OF DR. JOSE LUIS CRUZ, PRESIDENT, LEHMAN COLLEGE OF
THE CITY UNIVERSITY OF NEW YORK, BRONX, NY
Mr. Cruz. Chairman Foxx, Ranking Member Scott, and members
of the committee, thank you for the opportunity to testify this
morning. My name is Jose Luis Cruz. I am the proud president of
Lehman College of the City University of New York.
Lehman College serves 13,000 undergraduate and graduate
students across 90 degree programs, plus 12,000 students in
certificate and workforce development programs. Fifty percent
of Lehman undergraduates have a household income of less than
$30,000, 80 percent are students of color, and 41 percent speak
a language other than English at home.
The perspectives I bring today have been shaped by my
personal experiences as a student who benefited from Federal
and State aid, a faculty member and administrator at three
large university systems, and an advocate for low-income
students and students of color.
We can all agree on the importance of our post-secondary
education system, particularly in today's economy, but right
now our system is far too inequitable. Low-income students
today enroll in college at rates lower than high-income
students did in the mid-1970s and are far more likely to enroll
in institutions that graduate few of their students and create
disproportionate debt.
Lehman College and other public 2- and 4-year institutions
are tackling these inequities head-on. A comprehensive study by
the Equality of Opportunity Project concluded that mid-tier
public universities have the highest mobility rate of any
sector. The City University of New York alone propelled almost
six times as many low-income students into the middle class
than all the eight Ivy League campuses, plus Duke, MIT,
Stanford, and Chicago combined.
So how are we doing this? Lehman and the City University of
New York, like many other 2- and 4-year colleges across the
country, are creating alternate and well-coordinated pathways,
improving graduation rates, and reducing the time it takes our
students to graduate with a degree or a certificate, and
establishing public-private partnerships in leading-edge
workforce development areas. Programs like the City University
of New York's Accelerated Study in Associate Programs, also
known as ASAP, and Lehman's adult degree program are just two
examples of how colleges and universities are committed to an
equity-focused system.
These practices are changing the lives of students, and
with the right policy environment and sufficient investment,
they could be replicated across more institutions in the
Nation. What we need, however, are equity-driven investments
and policies to help move the work forward. I've often heard
that the Federal Government has no more money left, but from my
experience managing budgets, it's all about where your
priorities are at.
My written testimony details several investment and policy
recommendations to tackle inequities. Specifically, I want to
highlight the importance of four of them.
One, establishing a well-thought-out Federal-State
partnership focused on renewing State investments, which have
decreased by 20 percent since 1990, and focused on ameliorating
funding inequities among colleges and universities within a
given State.
Two, investing in the Pell Grant program and strengthening
it for the future. Pell's buying power has decreased
significantly since its inception, forcing low-income students
to disproportionately borrow more money for college.
Three, strengthening the direct loan program by reducing
interest rates and simplifying and expanding eligibility of
repayment options.
And four, improving the quality of data available. With the
right infrastructure, the burden would be minimal and the data
far more actionable.
We must also ensure strong protection exists for students
and families. The gainful employment rule, restrictions on
incentive compensation, and enactment of borrower defense have
gone a long way to protect taxpayers and students from the
worst for-profit colleges. Congress should strengthen these
provisions, not weaken them, and improve accreditation to
ensure Federal aid goes to the highest-quality institutions.
In closing, I believe that we can and must do a better job
of building a system that sustains rather than erodes
opportunity. Thank you.
[The testimony of Mr. Cruz follows:]
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Chairwoman Foxx. Thank you very much, Dr. Cruz.
Mr. Gilligan, you're recognized for 5 minutes.
TESTIMONY OF MR. KEVIN GILLIGAN, CHAIRMAN AND CHIEF EXECUTIVE
OFFICER, CAPELLA EDUCATION COMPANY, MINNEAPOLIS, MN
Mr. Gilligan. Thank you, Chairwoman Foxx, Ranking Member
Scott, and distinguished members of the committee. My name is
Kevin Gilligan, and I'm the chairman and CEO of Capella
Education Company. I'm honored to be in front of this committee
as a voice for innovation in higher education and the American
workforce.
Before I discuss our work in the innovation space, I'd like
to echo the comments of my fellow panelists around the
challenges presented by the complexity and density of higher
education regulation and the barriers they can present to new
models and improving outcomes. We have a set of policy
priorities that I'd like the opportunity to introduce to the
congressional record.
Our strategic focus at Capella is to create the most direct
path between learning and career advancement. We want to lead
the way in closing the skills gap. We do this through both
Capella University, which is an online, competency-based,
adult-serving institution where our average-age student is 40
years old and more than 50 percent of our students are learners
of color, and offerings outside of the degreed education space
focused on providing employers and individuals with job-ready
skills needed to compete in the 21st century economy.
In my written testimony, I focus on four areas of
innovation we'd like to highlight for the committee. In my
opening statement today, I'll touch briefly on two
opportunities for innovation.
Three years ago, I came before this committee to discuss
our FlexPath program, and I welcome the chance to update you on
what we've learned. In 2013, Capella University became the
first institution in the country to offer bachelor's and master
degree programs approved by the Department of Education that
measured learning through the direct assessment of competencies
instead of the accumulation of credit hours.
Today we offer eight programs within this competency-based
direct assessment model with over 3,000 FlexPath students and
more than 500 FlexPath graduates. Students earn the same degree
as in our credit hour model, but FlexPath provides a different
model for earning the degree.
Direct assessment works by decoupling student learning from
time. As you know, the credit hour is the current foundation of
higher education used to measure degree progress and around
which Federal financial aid is based. In some cases, we do not
believe that time-based tools constitute the best measurement
of student progress, especially for the adult contemporary
student. What matters is knowledge gained, not the amount of
time it took to gain it. This decoupling allows students to
move through their programs without any wasted time or money.
We have seen firsthand that FlexPath can be a powerful tool
for saving students time and money. Our early experience shows
that our FlexPath graduates paid 58 percent less for their
bachelor's degree than the graduates from our traditional
online programs, and FlexPath graduates borrowed 40 percent
less in Federal student loan funds than the traditional credit
hour graduates.
Competency-based direct assessment programs like FlexPath
are a powerful example of how seemingly minor changes to policy
can create the space for innovation to help eliminate a barrier
to access while providing the potential for significant cost
savings to the student and the Federal Government.
During your important work on reauthorizing the Higher
Education Act, we hope you will take the opportunity to develop
smart, responsible policy around competency-based direct
assessment.
Existing Federal financial aid rules are structured around
the traditional credit hour format, and those rules stifle the
opportunity to fully realize the power of the direct assessment
model. Often, schools have to retrofit a direct assessment
program into Title IV requirements in ways that create
confusion for students, institutional burden, and limits the
ability of programs to meet the needs of the contemporary
student.
In my written testimony, I've outlined four areas where I
believe policy can be changed to ensure direct assessment
models are available to students in a way that allows for
innovation without lowering the bar on quality or creating the
conditions for a race to the bottom.
One innovation I'd like to discuss outside the degreed
space is our RightSkill program. RightSkill is a partnership
formed with CareerBuilder to build a net new supply of job-
ready candidates for positions where significant supply-demand
imbalances exist. We're combining CareerBuilder data with
Capella's competency-based expertise to create a program aimed
at closing the skill gap at scale in critical need areas within
the workforce.
While it is still in the early stages, we have now placed
over 200 candidates in jobs, and we're partnering with nearly
30 employers, who are showing significant excitement for this
program. This partnership is an example of the innovation that
can come from the private sector.
These examples of innovation are just a few in a crowded
landscape of exciting new models. As policymakers, you're
gathering at a moment of unique opportunity to craft Federal
policy to remove barriers to innovation, strengthen outcomes,
simplify our system of education financing, and highlight
innovations in the private sector.
Let me close, Chairwoman Foxx, by thanking you and Ranking
Member Scott for the opportunity to come here today and engage
in a conversation about innovation and new models.
[The testimony of Mr. Gilligan follows:]
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Chairwoman Foxx. Thank you very much, Mr. Gilligan.
I will begin the questioning today and then invite my
colleagues to join me in order.
Dr. Kirwan, I read in your report that institutions spend
26.1 million hours annually completing DOE-mandated forms
alone. These numbers are staggering. Couldn't this money and
time be better spent on serving students?
And if we do our part to reduce meaningfully the burden of
Federal regulation and reporting requirements on colleges and
universities, do you think that could make a real impact on the
cost of college that students and families currently face?
Mr. Kirwan. Thank you, Chairwoman Foxx.
Absolutely, I do. There is just no question that the
regulatory burden and the reporting requirements add
significant costs to our institutions. There was a study done
at Stanford some years ago, and their estimate was that
reporting requirements added 7-1/2 cents to every tuition
dollar for a student at Stanford. A study at Hartwick College,
a private liberal arts school, produced similar kinds of data.
So there's just no question that this is adding to the cost
of operating a university and either requiring increases in
tuition or reducing services that we could provide to students.
So rather than having staff who are working on regulatory
reporting, it would be better to have those same staff advising
students about their progress towards a degree. So we
definitely have concluded that improvements could be made if
there wasn't such a heavy regulatory burden.
Chairwoman Foxx. Thank you.
Dr. Akers, in your testimony you discussed some of the
realities around student loan debt. It's a popular topic these
days, and with $1.3 trillion outstanding, it's clear why it is.
But I agree there's misinformation out there about what's
actually happening. Can you speak to who is borrowing the most
and who's most likely to default on their loans -- you
indicated a little bit of that in your testimony -- and why
that borrowing is not always paying off?
Ms. Akers. Certainly. So I think there's a pretty widely
held misconception that, in fact, it's the borrowers who have
the greatest outstanding debts who are in the most trouble.
Research tells us through a number of different studies that,
in fact, it's borrowers who have less than $5,000 in debt who
are most likely to be in default or have other measures of
financial distress, like being late on other sorts of financial
obligations, like cell phone bills and mortgage payments and
things like that.
It's important to reconcile this fact with this
misconception, because some of the existing policy proposals
assume that this is the case. For instance, refinancing would
work very well as a solution to help borrowers if it was, in
fact, those high-balance borrowers who are struggling the most,
but since it's not, refinancing actually would be delivering
benefits to people who need it the least.
Chairwoman Foxx. Thank you.
I want to go very quickly with this question, Mr. Gilligan,
and see if we can get it answered.
During the Obama administration, we noticed a coordinated
attack on the proprietary sector. Gainful employment borrower
defense were allegedly created to protect students, but what we
saw were policies doing exactly the opposite.
As you and I both know, the proprietary sector tends to
serve low-income and hardest-to-serve students, and these
policies have forced schools to roll back programs. From your
experience, how have these types of regulations and other
actions by the Department hindered your ability to serve the
needs of your students? Are there any actions in particular by
the Department that you believe should either be repealed or
modified?
Mr. Gilligan. Thank you, Chairwoman Foxx.
So I would start responding by saying that Capella believes
strongly that institutions should be transparent about their
outcomes and accountable for student outcomes and be good
stewards of Federal financial aid. So we need regulation, but
the regulation needs to be responsible and commonsense and not
lead to unintended consequences. So I'd give you two examples
of recent regulations that I think were well intended but would
in practice create challenges.
In the case of gainful employment, by establishing a one-
size-fits-all debt-to-income metric, it puts pressure on
important professional areas for degrees in teaching and
counseling and social work where because of programmatic
requirements for those degrees there's pressure on costs, but
because of an arbitrary debt-to-income ratio, if you don't meet
that ratio, those programs cannot be offered through Federal
financial aid, and that will ultimately have the impact of
limiting access or reducing the number of programs that
students can take advantage of. So I would say that's an
example of an issue with gainful employment.
With respect to borrower defense repayment, we certainly
agree that students who are deliberately misled or defrauded by
their institution should have remedies for that and be
protected, but our comment on borrower defense, like many
institutions, was that the rule was poorly written, it lacks
due process, and involves overreach. And we're particularly
concerned about the changes made to the financial
responsibility requirements and the arbitrary way in which they
can be administered.
We've submitted written comments on this, so we invite you
to read those if you'd like to understand our concerns better,
and we hope that Congress and the Department will revisit these
rules to create a more responsible version.
Chairwoman Foxx. Thank you very much, Mr. Gilligan.
Congressman Scott, you're recognized.
Mr. Scott. Madam Chair, I told our side, since you always
defer to the end, that I'll defer to Ms. Bonamici.
Chairwoman Foxx. I'm sorry.
Ms. Bonamici, then you're recognized.
I'm sorry. Thank you.
Ms. Bonamici. Thank you, Madam Chairwoman and Ranking
Member Scott.
Madam Chairwoman, in your opening statement you brought up
a $27 billion compliance cost to make a point about
overregulation of colleges and universities. And,
unfortunately, this figure comes from a flawed study that does
not actually estimate what its promoters suggest. It does not
measure actual compliance costs. It actually states no
distinction was made in costs that were incremental to what the
university would do in the absence of regulation, and very
little of what the report describes is actually specific to
higher education. In fact, 80 percent of the purported $146
million -- this was at Vanderbilt -- has to do with rules about
research, like protecting human subjects in medical research.
So we shouldn't rely on this report for policymaking.
And I wanted to follow up on Dr. Kirwan. You talked about a
task force. When I was in the state legislature, you we all
agree that nobody wants unnecessary regulations, and I
sponsored and passed a K-12 mandate relief bill to repeal
several statutes and regulations. And it had strong bipartisan
support, because we worked with all of the stakeholders, the
Department of Education, the teachers, the school boards, the
administrators, the school employees association. And I hope we
can approach this issue in a similar way with the input of all
of the stakeholders.
Like my colleague Mr. Norcross, I started at community
college and then worked my way through a 4-year university and
law school. And when I graduated, I took a job in public
service and still had little difficulty repaying the manageable
amount of debt that I accumulated during my 7 years of higher
education. So I know that this experience is less common. This
is a critical issue to be discussing.
And, Dr. Cruz, I want to ask you, we've heard a lot
recently about institutions that have defrauded students and
fabricated job placement rates, the sudden closure of ITT
Educational Services, for example, and now there are
investigations by State attorneys general, the SEC, the
Department of Justice. That's one example of an unscrupulous
for-profit school that collected Title IV dollars and left
students with an education of little value and poor job
prospects.
And you mentioned the importance of protecting students
from being defrauded. Can you explain the accountability
mechanisms that exist for public institutions and how they
differ from the for-profit institutions?
And I do want to have time for another question.
Mr. Cruz. Thank you. So the accountability mechanisms are
similar for both, for public and for-profit institutions. What
varies is the level of scrutiny to which each of the sectors
are held accountable. In the case of the for-profit sector, we
have the Federal regulations, we have State authorization, and
we have the accreditation of programs, just as we do for the
publics.
But the problem is that in the case of the for-profits,
State authorization is fairly symbolic. Institutions have to
basically state that they in fact exist. And from the
standpoint of accreditation, it has not been as strong as we
would like in terms of verifying that the programs are, in
fact, high-quality programs. In fact, an accreditation agency
was recently deauthorized from doing that work because they had
been authorizing some of the bad actors that you mentioned
earlier.
So basically what we're left with is just the Federal
oversight, which is currently primarily enforcing the gainful
employment regulations.
On the public side, you have the Federal, you have the
State, and you have the accreditation. And the State is much
stronger, because they basically go do things like authorize
programs and also determine whether or not the institutions can
increase tuition.
Ms. Bonamici. Thank you.
And I want to ask Dr. Akers and Dr. Cruz, last Congress I
introduced a bipartisan bill to help borrowers, particularly
distressed borrowers, continue to make affordable payments
based on their income. And I know, Dr. Akers, you talked about
income-based repayment. The bill uses tax data to automatically
recertify borrowers' income. It's a response to the research
that suggests that more than half of the borrowers don't
recertify on time, sometimes causing a sudden spike in
payments.
Do you agree that this committee and the Department of
Education should take steps to simplify the repayment
processes, especially for struggling borrowers, by including
automating income recertification for borrowers in income-
driven repayment plans? We worked very hard with the Department
of Education and the Treasury on this.
Ms. Akers. I fully support this step, as it's very clear
that the complexity in the repayment system is very likely
driving many borrowers into default needlessly when there are
safety nets that could be supporting them.
Ms. Bonamici. Thank you.
Dr. Cruz.
Mr. Cruz. I support it as well.
Ms. Bonamici. Thank you.
One more thing. In Oregon we have the Oregon Manufacturing
Innovation Center. It's an exciting new collaboration of
businesses, higher education partners, and workforce
development folks. And I just want quick input on how we can
support collaborative initiatives like this that recognize the
needs of students, workers, and businesses to build on the
strengths of our innovation economy.
Dr. Cruz.
Mr. Cruz. I think providing incentives for more of these
collaborations to move forward would be very valuable. As we
all know, the skill gaps across the country are primarily
regional in nature. So to the extent that we can provide basic
support for these coordinating bodies, we will likely be able
to see some success.
Ms. Bonamici. Thank you. I see my time has expired.
Thank you, Madam Chairwoman. I yield back.
Chairwoman Foxx. Thank you very much.
Mr. Walberg, you're recognized for 5 minutes.
Mr. Walberg. Thank you, Madam Chair. I appreciate the panel
being here.
Mr. Gilligan, you focused in the area of competencies in
your testimony, and I appreciate that, the skills gap issues
that are there, the most efficient way to address this problem.
I think in the, I believe, 3 years since you last testified in
front of this committee, that's still a problem, and I
appreciate the uniqueness that Capella seems to bring to the
process. And the fact that you're still around, I think,
indicates that as well.
In talking with my manufacturers, with small business all
across the spectrum, education as well, we're still finding
that skills gap, of actually dealing with what takes place in
the marketplace, what takes place on the manufacturing floor,
what takes place in the office structure, doesn't always match
up with what the student has come out. And, again, in
significant debt at times, but a process by which they paid for
an education, and yet it doesn't meet the real world situation.
Can you describe the work Capella has done to align the
competencies being taught to students with what employers want
in order to better meet the needs of the American workforce?
Mr. Gilligan. Yes. Thank you for the question, Congressman.
So we do it in two different ways. In our degree programs,
we work with employers and professional organizations to
understand what are the competencies that individuals need to
successfully perform the job that we're trying to re-skill or
up-skill them for, and then we design those competencies into
our curriculum, and then we teach to those competencies and we
assess our students against those competencies.
So when a Capella University student graduates, they not
only have a classical transcript that we're familiar with from
traditional colleges, but they have a competency portfolio that
they can then use with the employer to demonstrate these are
the competencies that I demonstrated proficiency or mastery
over during my course work at Capella. That's very valuable to
the student in being able to articulate what they know and what
they can do, which is really what employers want to understand,
but it's also valuable to the employer to translate that into
the workplace.
So we've been designing our programs that way for over 10
years, and it's one of the reasons, I think, just to go back to
gainful employment for a minute, that the income data on our
graduates compare so favorably to other institutions. I think
we've got very relevantly designed programs aimed at exactly
what the employer's looking at.
What we're increasingly seeing, though, is that a degree is
not always the answer, and this is why we developed our
RightSkill program by focusing with employers on what are jobs
you can't fill, what are the skills and competencies needed in
those jobs. So an example might be front-end web development or
information security. We design learning solutions around those
competencies. We then find individuals we think are qualified
to be successful in those fields, we train them and place them
with the employer.
Mr. Walberg. Is there continued feedback with the employer
as you go through this process as well?
Mr. Gilligan. So in the case of our degree-based programs,
we're able to track with employers how learners perform based
on the competencies we taught them. In the case of RightSkill,
and this is a newer model, but we're working with the employer
to place. And the employer actually pays us for the placement,
and we guarantee the employer that if that person we place
doesn't work out within a period of time, we'll replace that
person at our cost. So there is an accountability mechanism
that goes back to the employer.
Mr. Walberg. Okay. Let me go on. How can Congress encourage
more direct alignments between learning institutions and
employers in a way that strengthens the workforce and
ultimately drives down the cost of education?
Mr. Gilligan. Well, I spoke earlier about our FlexPath
program, and we're finding that FlexPath is very innovative,
not just for the consumer, because it reduces the amount of
time and cost to get the degree, but it also does align to the
employer. Anything we can do to create greater flexibility in
the system, keeping in mind we're serving working adults. These
are people that are working full-time, raising families, maybe
supporting extended families, and trying to fit college into
their incredibly busy lives. And so the more flexible we can
make it the better.
So FlexPath, I think, has gone a long way to doing that,
but there's still a requirement in the Federal financial aid
system to tie direct assessment programs back in certain ways
to the credit hour and to seat time. That creates complexity,
it confuses the student, and creates administrative burden. And
in our written testimony, I've provided some examples of some
simple changes we can make that I think would achieve a higher
level of flexibility without compromising academic quality.
Mr. Walberg. Thank you. My time has expired, and I yield
back.
Chairwoman Foxx. Thank you, Mr. Walberg.
Congresswoman Davis, you're recognized for 5 minutes.
Mrs. Davis. Thank you very much, Madam Chair. And I greatly
appreciate our starting this set of hearings and have the
ability to really look freshly, I think, at what we even think
of as higher education and how it is moving forward past high
school in many different ways. And a lot of you have spoken
about that and the multiple pathways.
I wanted, Dr. Kirwan, to just ask you briefly about your
experience on the task force. And I know you said that you saw
that there were certainly some transparent and responsible ways
to work with protections for students and for institutions, and
at the same time there are areas where that is a problem, and I
certainly understand that. And as a former school board member,
I can relate to that as well.
But I wanted to ask you, because recently we've heard that
some of the protections might be looked at, and I was concerned
about that. Title IX protections regarding sexual assault falls
within the important role of the Federal Government that you
acknowledged in your statement. I'm wondering what you think
about a recent comment, and you may have not seen that, but in
Reuters where Mr. Falwell, the recently appointed head of the
President's higher education task force, would push to remove
these safeguards. Any thought about that?
Mr. Kirwan. Thank you very much, Congresswoman Davis.
The task force did not in any way suggest the elimination
of these protections. In fact, I think there's a consensus, a
uniform view in higher education that the goals of the Clery
Act and the Uniform Crime Reporting, et cetera, are very
important.
The issue we did raise in the task force is the confusion
between some of the new reporting requirements and the Clery
Act. Activities have been defined as crimes in the Clery Act
that are not considered crimes in the Uniform Reporting Act. So
the only comment we made on this issue is that we would suggest
that the Congress get the Department of Justice to clarify so
that there is a consistent definition of what crimes should be
reported both in Clery and in the Uniform Reporting Act. But we
are 100 percent in support of the goals of these protections.
Mrs. Davis. Well, thank you. I appreciate that, and, again,
for your service on the task force. We know that can be really
valuable time that you're giving, and I appreciate that.
I wondered, Dr. Cruz, if you could share with us a little
bit more about the ways in which we are collecting more data
today and the importance of that and what you think are those
data points that give students the information that they need
to help them be the most informed going into this rather
lengthy and very important and costly endeavor as they move
forward in higher education.
Mr. Cruz. Thank you. I believe that we can do some
improvements with our data systems that, if we do them right,
will not be overly burdensome to the institutions but would go
a long way to helping students and their families have the
right information they need to make those decisions, and also
to provide institutions an opportunity to actually have
actionable data, data that they can look at and identify
potential areas for improvement.
So just in general, I would suggest that, for example,
right now with the College Scorecard, we can see data on
overall graduation rates, future earnings, debt levels, but
that's overall. If I'm a student or the parent of a student, I
would want to know what are the odds and what do those
statistics look like for students that look like me or my kid.
And so if we could disaggregate that data so I can see what are
the graduation rates for transfer students, for
underrepresented minorities, for low-income students, that
would be very helpful.
Mrs. Davis. And is that information that the universities,
colleges, schools have, even tech schools have?
Mr. Cruz. Yes, that is information we have and we collect
and, in fact, we share. I had the privilege of working with
Brit on the Access to Success Initiative where 22 systems
across the country with over 312 campuses and more than 3.5
million students collaborated, defined some metrics to
disaggregate, collaborated on the definitions --
Mrs. Davis. So that would not necessarily be burdensome on
the schools to do that, to provide that information?
Mr. Cruz. Correct.
Mrs. Davis. It shouldn't be. All right. Thank you very
much. I appreciate all of your testimony.
Chairwoman Foxx. Thank you, Congresswoman Davis.
Congressman Guthrie, you're recognized for 5 minutes.
Mr. Guthrie. Thank you very much.
And this is important to me. Eighteen years ago when my
young daughter was born, we were all happy and excited. Then I
did the math. I said, wait a minute, she and her brother are
going to be in the college at the same time. So I've got a
senior and a freshman in college this year. And so -- and it's
not just my experiences with the expense of college. And we
make -- it's that those are the peers. You talk to the parents
of your friend's children, and so a lot of them are going
through the affordability of college. And so it's something
that I hear about quite a bit and experience. And not only
experience, but hear about quite a bit.
So I have a few questions first for Dr. Akers. In looking
at our Federal aid system, I'm concerned about the perverse
incentives to overborrow, and appreciate you raising the issue
in your testimony. Can you expand a bit on what those
incentives are and discuss ways we could address them in
reauthorization?
Ms. Akers. Sure. So I think the place where this comes into
play the most is with the forgiveness provisions and the
current income-driven repayment plans that are available to
borrowers. So once borrowers hit a particular level of
borrowing, they're very likely to anticipate that they will be
eligible for forgiveness in the future, which means that any
marginal dollar that they borrow is a dollar that they will not
have to pay back.
And so the way that forgiveness is structured in the
current program does create this perverse incentive for
overborrowing. What I proposed is eliminating the forgiveness
provisions as they're written; instead, using the bankruptcy
system as a means for dissolving borrowers of debts once they
become financially insolvent.
Mr. Guthrie. Thank you. Thank you for the answer.
And, Dr. Kirwan, I notice your undergraduate University of
Kentucky. Go Cats. Hopefully we will get rolling again in the
next few weeks. March is approaching so we need to get it
going, right?
I have a question for you. We've heard today from Capella
about the exciting and innovative opportunities available to
students through distance education. And I know the University
of Maryland has been doing really great work in this space as
well. In your written testimony, you mentioned the State
authorization of distance education regulation as one the top
ten most problematic regulations. Can you elaborate on why this
regulation is so toxic for the growth of innovative online
programs?
Mr. Kirwan. I am happy to do so, Congressman Guthrie.
Historically, both Congress and the Department of Education
have required that an institution offering a degree program
need only seek authorization in within the State with which
it's located. What this distance education reg from the
Department of Education attempts to do is to require
authorization in every State where there is at least one
student taking a distance education program.
And the problem this creates is, is that a distance
education program from, say, the University of Maryland
University College, they would have to expend the funds to go
to every State, get a lawyer, go through the process, and get
approval for that program in the State. And that's just an
unreasonable cost to bear. And so there's, you know, an example
already of where Vanderbilt University developed a distance
education program. Because of this reg, they decided not to let
the program be taken in various States.
So we would very much hope -- you know, this has been a
very contentious issue in the higher education community.
Congress has spoken out, the House has spoken out about its
displeasure with this. And we would very much hope that in the
reauthorization process it would be clarified that the
requirement for obtaining authorization is only in the State
where the institution exists is delivering the program.
Mr. Guthrie. Thank you for that answer. I know you've led
and you've been president of and led systems in great
universities, but your loyalty is always to your undergraduate
institution. Right?
Mr. Kirwan. Go Cats.
Mr. Guthrie. So, Mr. Gilligan, in your testimony you
mentioned the success you've had with FlexPath program over the
last several years. Can you provide a little more detail about
how the program works and how it allows students with the
opportunity to complete their program more quickly and with
less cost than a traditional degree?
Mr. Gilligan. Yes, Congressman, happy to. So FlexPath --
the fundamental difference between a FlexPath program and a
credit hour program is in the FlexPath program you earn your
degree by demonstrating competencies as opposed to accumulating
credit hours. So students are decoupled from the credit hours
standard, which allows them to move faster. And this is
particularly effective for working adults, and that's who we
serve. We bring a lot of competency into the course room by
virtue of the work experience. So it's the ability to move
faster that creates the value for them.
And we offer FlexPath on a subscription pricing basis, so
there's 12-week cycles, and we charge between $2,200 and $2,500
a cycle. And in that cycle, students can consume or demonstrate
as many competencies as they're able to. So students see the
opportunity to go quickly, leverage a subscription model, and
that's where we're seeing dramatically lower completion costs.
And I would mention most of our bachelor students are
degree completers. It's very rare that a Capella student gets
their entire undergraduate degree at Capella. So typically,
we're looking at people that are bring some transfer credits
in, they never finished their degree at the bachelor level, and
they're looking for a way to get it done.
And if I can just quickly mention, a woman at Capella, a
FlexPath graduate by the name of Connie Pash recently was at a
White House meeting on innovation and higher education, and she
was one of four people talking about her experience as an
innovative model, and she's an FlexPath graduate. And what she
said was, ``I would not have gone back to college unless I
could take advantage of the flexibility and affordability that
FlexPath offered.'' And what she was really saying is the
credit hour model didn't work for me. And I can tell you that
there's a lot of Connie's out there.
Mr. Guthrie. Thank you. I'm running out of time.
I yield back. Thank you for the answer.
Chairwoman Foxx. Thank you. The gentleman yields back.
Mr. Courtney, you're recognized for 5 minutes.
Mr. Courtney. Thank you, Madam Chairman. And thank you for
holding this hearing. We're about 3 years late in terms of a
higher ed reauthorization. So hopefully this is a good sign
we're going to move forward. And again, I want to thank all of
the witnesses for your thoughtful testimony this morning.
Professor Akers, in particular I wanted to salute your
comments regarding the notion that restoring private sector
participation in Federal student lending is really not the best
path to move forward on. That idea kind of keeps popping up in
the political atmosphere or ether that's out there right now.
But again, just to drive that point home, I mean, to have
private lenders originate loans but have the Federal Government
there to insure it. I mean, there really is just no logic in
terms of protecting the taxpayers with that kind of an
arrangement. We sort of went through that whole process both
under the Bush administration and the Obama administration, but
maybe you could elucidate a little bit more on that.
Ms. Akers. Sure. Just to clarify my remarks, I did indicate
that I thought a return to the FFEL lending program --
Mr. Courtney. Right.
Ms. Akers. -- would be a step in the wrong direction. I
don't think that incorporating private -- the private lending
industry into student lending more broadly is a bad direction
to be headed. I just prefer to see that happen through the
paring back or potentially the elimination of loan eligibility
for parents and graduate students so that the market can serve
those populations independently of participating through a
Federal lending --
Mr. Courtney. Sure. And I'd like to sort of go into that
too. Also, we just passed a measure in terms of loan
forgiveness for people going to pediatric subspecialties last
year. It was either part of the Cures Act or the -- it was the
Cures Act. And, again, that was the result of a painful process
post-Sandy Hook, in terms of recognizing that we have an
appalling shortage of pediatric psychiatry in the country.
That's really being driven by the fact that the reimbursement
for people who go into that really important profession just
does not make it sustainable in terms of paying back student
loans.
So admittedly, it's through the National Health Service
Corps and not through the other program, the Public Service
Loan Forgiveness program. But I would argue that there are
really good reasons why we have set up loan forgiveness that is
not creating inefficiencies, it's just making sure that we have
critical workforce professions filled for our kids and for
other people, particularly in the healthcare system.
Ms. Akers. There are absolutely good reasons to be
providing subsidies to different professions in public service.
I'd commend those efforts because it sounds like those were
appropriate places to do that. The objection I have is
providing those subsidies through the Federal lending programs.
We have a problem, huge problem with complexity in this system.
Layering subsidies in through the repayment system compounds
the complexity of the system. And it's also an inefficient way
of subsidizing those types of employment. I'd much prefer to
see those subsidies be delivered through a different mechanism,
potentially through the Tax Code.
Mr. Courtney. All right. Well, I mean, certainly, we're all
ears in terms of those kinds of ideas. I just would say that
you constructed a while ago in one of the prior questions that
people are overborrowing because they know there's loan
forgiveness at the process there. I have a hard time sort of
really believing that students or families are sort of
calculating their borrowing decisions based on having to
exhaust the loan forgiveness program which takes decades. I
don't think people think that way.
And I think they're doing it because tuition is really high
and they believe that there's a gainful employment opportunity
that's going to take care of the debt, not that they're trying
to game the system in terms of getting loans forgiven.
Ms. Akers. I think you're right, actually. I do think that
there is a perverse incentive that exists for a particular
group of borrowers. It's probably a small group of borrowers. I
think you're right that the majority of the growth that we've
seen in student debt over the past two decades is driven
largely by increases in price and not through this type of
gaming behavior.
Mr. Courtney. Right. Thank you. And so, again, you're an
economist who follows the economy closely. Just maybe a pop
question, pop quiz, do you know what the 10-year Treasury rate
is today?
Ms. Akers. I do not.
Mr. Courtney. Okay. It's 2.46 percent. And one thing -- I
raise that point because when people take Stafford loans with a
10-year term, and particularly those who took it out in prior
years, there is a legacy interest rate that far surpasses what
the government is charging for its borrowing needs. And for the
government to be basically making a profit off the differential
is just totally unacceptable. And we need to set up a system
where people can write down their interest rates at least to a
comparable level as the Federal Government. This is not loan
forgiveness; this is just refinancing, which we do in other
sectors of the economy, whether it's housing, credit cards, et
cetera. We need to do it with student loans.
With that, I yield back.
Chairwoman Foxx. The gentleman yields back.
Mr. Messer, you're recognized for 5 minutes.
Mr. Messer. Thank you, Madam Chair. Thank you for this
important hearing.
You know, as we've talked about often in this committee,
our Federal higher education policy is largely built on access
and providing greater access to every American. By that measure
it's been wildly successful. Of course, in today's world a
couple of things have changed. One, if you're going to get an
economic benefit from college, you've got to complete a degree.
And if you don't, you have debt, you're in a lot of trouble.
So part of what this hearing is about is thinking about
innovation. I've got three different questions I hope to hit in
my 4-1/2 minutes. We'll see if I get to all three.
I want to start with Dr. Akers. And I appreciated in your
testimony that you mentioned income share agreements and how
that is not a silver bullet but an innovative approach to
providing access to college. In my home State of Purdue, under
Governor Mitch Daniels' leadership they've created a back
boiler program that has been very successful right out of the
gate.
And I would ask if you could explain, first, just the
concept of what an income share agreement is, some of the legal
challenges that is there at the outset of trying to start this
new idea, and any thoughts you might have on Federal policy
that we could implement to help encourage them.
Ms. Akers. Sure. So just to give a basic primer, income
share agreements are, essentially, a contract between a lender
or a financial institution and a student, where the student
takes money up front from that lender or from the financial
institution to pay their cost of attending higher education. In
exchange, they don't make fixed payments but instead, they
promise to deliver a fixed portion, a fixed percentage of their
income back to the financier.
So the reason that this is a system that works quite well
is because it solves two of the problems that students have.
First, they need cash up front when they're very likely to have
cash in the future because of the heightened employment
opportunities that come from going to college. And two, they
need risk mitigation. So going to college is a risky thing.
Students don't know with certainty what their future employment
outcomes are going to look like.
And so if we want to encourage more people to go into
college, we need to ensure those outcomes in some way. Income
share agreements succeed in doing that because, rather than
making a fixed payment, students pay back in proportion to the
earnings that they ultimately receive.
So right now, income share agreements are an emerging
market. The reason we don't have more growth in this industry,
I believe, is because there's lack of certainty around the
regulation --
Mr. Messer. So you can do it by contract, right? And some
folks are. But the point you're making is because it's not
clear in the law what the boundaries of this agreement is, some
folks see as a risky investment.
Ms. Akers. That's right. So it's on the capital side where
this is the problem. So the contracts are sort of clear. My
sense is that the institutions that are offering these
contracts are having difficulty raising capital to finance them
because of the lack of certainty among investors.
Mr. Messer. And what would we need to do in Congress, I
mean, just to essentially clarify that this is a legal way to
conduct business and set some boundaries in how --
Ms. Akers. Exactly right. So in particular, we would want
to see what are the boundaries for consumer protections for
these types of products. And I think the industry would welcome
this clarification.
Mr. Messer. Great. Thanks.
Next, I'd like to go quickly to Mr. Gilligan and follow up
on Mr. Guthrie's questions to you regarding FlexPath and
competency-based education. A very exciting story that you
told.
Could you talk a little bit about some of the challenges? I
think in your written testimony, you mentioned that the
regulation requiring regular and substantive faculty
intervention creates some challenges with these programs.
Mr. Gilligan. Yeah. So let me clarify that comment for you.
So there are two things about our direct assessment model that
are unique: One is that we are decoupled from the credit hours,
as I said. The other is that the faculty's at the center of the
model. And what that means is the faculty defines the
competencies, develops the curriculum, develops and administers
the assessment, and provides instruction to the assessment
process.
It's really critical to maintain that to ensure we have a
high quality, robust direct assessment model for the future,
because we don't want to have a race to the bottom.
Mr. Messer. Yes.
Mr. Gilligan. But as we have advances in new learning
methods and educational learning technology, the role of the
faculty is being defined. And I think we're at a point where we
should be revisiting what do we mean by regular and substantive
faculty interactions.
Mr. Messer. And in 40 seconds, what should we -- how should
we clarify that?
Mr. Gilligan. Well, I think we should have a conversation
around where are the areas that the faculty can create the
greatest value in the learning process and ensure that those
are reinforced. And if there are technologies available to
support one of those other ways, we ought to allow that into
the conversation.
Mr. Messer. Great. Thank you very much.
Mr. Cruz, I have some questions about reverse transfer
agreements and how important it is to be able to transfer back.
I'll provide those to you in writing. Thank you for that
innovative program as well.
I yield back to the chairman.
Chairwoman Foxx. Thank you very much, Mr. Messer.
Mr. Polis, I believe you are next, and I recognize you for
5 minutes.
Mr. Polis. I want to thank Chairwoman Foxx for convening
this important hearing. I know that this is an important
priority for Dr. Foxx and it is for me as well.
My district includes two flagship universities, Colorado
State University and University of Colorado Boulder, several
community colleges, and Colorado Mountain College. I hear
almost daily from constituents about the cost of higher
education and affordability, everything from student loans to
FAFSA, to the intimidating price tag that families face.
I'm very optimistic that today's hearing is the beginning
of a thoughtful bipartisan conversation on how we can update
the Higher Education Act to make more college more affordable
and accessible. And I want to say I look forward to working
with my colleagues on both sides of the aisle towards that end.
First, I want to highlight one of the strategies for
affordability, dual and concurrent enrollment. In Colorado,
about 24,000 students participated in concurrent enrollment
last year, students that take courses for college credit
usually in partnership with a community college while still in
high school. Students who participated were more likely to
enroll in college, less likely to seek remediation. We had a
number of students who graduated high school with an
associate's degree. Concurrent enrollment is truly a proven
strategy for bringing down higher education costs.
Dr. Cruz, can you discuss the benefits of concurrent
enrollment for first-generation and low-income students, and
specifically how exposure to concurrent enrollment in high
school can support their access to college?
Mr. Cruz. Dual enrollment programs are a particularly
interesting mechanism to help first-generation and low-income
students earn academic credit that can accelerate their work
once they get into college. But more importantly, as you
mentioned, it provides them an opportunity to engage with the
college environment.
The City University of New York has a very strong dual
enrollment program called CUNY Now that serves over 400 high
schools in the city through 17 of our campuses. Lehman has one
of these programs. We are in 60 schools and have around 1,700
students that come after school to Lehman to take classes with
Lehman College faculty. And so we have seen directly the impact
that this has on their ability to graduate. In fact, 30 percent
of the freshmen in City University of New York were at some
point part of these programs.
Mr. Polis. Thank you. And I do have a bipartisan bill we'll
be introducing soon with Representative Reed regarding support
for dual and concurrent enrollment programs that I hope can be
included in the Higher Education Authorization Act.
Next, I want to mention another cost-cutting strategy, and
that's open source textbooks. Open source textbooks are openly
licensed, free for use. As you know, on average, students spend
over $1,200 a year on books alone, one of the big detriments
and one of the big components of the cost.
Because tuition at community college is generally lower,
the proportional cost for textbooks is even higher than it is
at 4-year universities, and for students struggling to make
ends meet after paying for tuition, living expenses, thousands
of dollars in textbook costs often make college even less
affordable than it is.
Dr. Cruz, can you share what CUNY and Lehman College are
doing to support access to open textbooks as a way of bringing
down costs for students?
Mr. Cruz. Sure. So just a couple weeks ago, Lehman College
announced the first recipients of a faculty fellowship project,
a small grant that we're doing to incentivize faculty to
develop open textbooks for their courses. So we're doing this
for the first time now.
More recently, my previous position was as a provost and VP
of Academic Affairs at Cal State, Fullerton. In California,
state law created an incentive for institutions to move in this
direction, basically providing some grant funding for faculty,
not necessarily to create their own materials, but look at
existing materials and determine whether or not they could be
adapted to their curriculum, particularly courses to have
multiple sections and impact thousands of students. So there
are ways that we can scale that up and accelerate progress
across the country in this field.
Mr. Polis. Thank you.
For Dr. Akers, I want to discuss income-base repayment.
Now, there's a number of proposals. There's broad bipartisan
support for income-base repayment, but there is the question of
exactly what the parameters will look like. Some proposals
suggest students pay 10 or 15 percent of their income above a
certain level, some allow forgiveness. I have had a bipartisan
bill where repayment is capped at 150 percent of original
value, but there's not forgiveness.
Can you speak to the specifics of income-base repayment?
What percent is correct? How should we handle capping
repayment? What do you think the kind of best practice IBR
looks like?
Ms. Akers. I think, as I mentioned in my testimony, that
the first job is to streamline the program into a single
program. And I'll have to admit, I'm --
Mr. Polis. To be clear, I think all of the reform proposals
would do that. It's a question of what that single program
looks like.
Ms. Akers. Right. And I'll refrain from commenting on what
specific parameters I think would be best today. But I would
encourage policymakers to think about setting those parameters
with the thought in mind that they would be at least
reconsidered in the future after there's --
Mr. Polis. And perhaps you can follow up with your analysis
in writing so you can be more thoughtful about discussion of
what those -- pros and cons of those different parameters are.
I know that the committee would appreciate that as we move in
this direction.
Ms. Akers. Sure.
Mr. Polis. I thank the chair, and I yield back.
Chairwoman Foxx. Thank you very much, Mr. Polis.
Representative Lewis, you're recognized for 5 minutes.
Mr. Lewis. Thank you, Madam Chair. And thank you to the
guests for coming today.
There's -- obviously, in a hearing like this, there's a lot
of talk about repayment and financing and loan forgiveness, but
I want to go back to the cost, especially as regards to
taxpayers. As the chair pointed out in her opening statement,
we've seen this massive escalation in the cost of higher ed.
I've got a graph here in front of me from the Bureau of Labor
Statistics showing since 1996, the cost of food and beverage is
up 64 percent; medical care, 105 percent; child care, 122
percent. They all pale in comparison to college tuition, up 197
percent. The only thing that beats that are textbooks, up 207
percent.
Mr. Kirwan, you mentioned regulations in your testimony. I
want to get a little bit more specific there as to what we can
do to lower the cost. And everybody's got these anecdotes, I
understand that. But when I was going to undergrad, I think the
tuition for a full load in a semester for 16 credits was $350.
Now, this was in the early 1970s. That was a lot of fun before
running water. It was a while ago.
But the fact is we've got a cost crisis here. So we've
spent all day trying to figure out what we're going to do to
forgive the loans or to finance it. What are the regulations
that you would address that are driving the costs?
Mr. Kirwan. Well, thank you, Congressman Lewis. In our
report, we've identified, and I think I said, 59 regulations
that we feel have undue reporting requirements that are
definitely driving up the cost. So we have a specific set of 59
recommendations -- regulations in our report that we have
identified. And we've also proposed solutions that we think
would streamline and lower the cost of compliance.
In no way did the commission feel that higher education
should not be regulated or that regulations aren't an important
an -- an important tool. We need to be held accountable. But we
can streamline this process and take significant cost out of
the operation of our institutions.
I've referenced a study from Stanford University that said
that regulation could be as much as 7 percent of the tuition
costs at the student's experience.
Mr. Lewis. Actually, there's a study from Vanderbilt that
says they spent 11 percent of the University's entire budget
complying with regulations.
Mr. Kirwan. Right, right.
Mr. Lewis. So that's something we clearly need to look
toward and delve into a little more.
I also want to talk -- and I'll address this to Dr. Akers.
And I don't know how to describe this, but I used to have a
friend, who's sadly passed away, but he was a shop teacher for
30 years in Minnesota. And he was a lifelong Democrat, I'm a
lifelong Republican, but we used to lament the fact that so
many high schools don't have shop. We're not introducing kids
to a vo-tech training. It's cheaper, the loans are lower, and
they actually get a job when they get out from under that or
out from school.
Is there a general emphasis on a traditional 4-year liberal
arts degree, in many cases costing, you know, even in public
schools, $60,000, $70,000, $80,000, to the detriment of vo-tech
in this current system?
Ms. Akers. I'm not so sure that policy has been -- played a
big role in diminishing the role of vocations in our economy,
but I do think that the rhetoric surrounding higher education
has overcelebrated the bachelor's degree as a pathway to
financial success. It's become in a way part of the American
Dream, if you will. And I think that's done a large disservice
to students who would have been better served by alternative
pathways to employment.
Mr. Lewis. And what can we do to expose students that may
not be best suited or best served by a traditional 4-year
liberal arts degree and get them into some sort of technical
training?
Ms. Akers. That's not a question I'm prepared to talk about
today, but I'd be happy to follow up with you.
Mr. Lewis. Anybody else on the panel have an idea there?
Mr. Gilligan. Congressman, I would say continue to promote
innovative new models. So I mentioned earlier, RightSkill is a
model. College isn't for everybody, and employers are having a
difficult time finding skilled workers in not only technical
categories but nontechnical categories, like customer service
reps, entry-level recruiters. And using competency-base
learning, you can develop very low cost, affordable learning
solutions quickly. And when I say quickly, in a matter of a
month equip an adult with the skills that would make them
eligible for that job.
Mr. Lewis. Is that a euphemism for apprenticeships, what we
used to call apprenticeship?
Mr. Gilligan. No, no. It's basically understanding -- let's
just take customer service rep job -- what are the critical
competencies that the employer needs the candidate to be able
to demonstrate. You map those into a curriculum. You teach the
candidate those skills, you assess to validate that the
candidates learn those skills, and you put them into the
workplace.
Mr. Lewis. Thank you very much.
I yield back my time.
Chairwoman Foxx. Thank you very much.
Ms. Wilson, you're recognized for 5 minutes.
Ms. Wilson of Florida. Thank you, Madam Chairwoman Foxx and
Ranking Member Scott for holding today's hearing on higher
education. And I thank the witnesses for sharing their
testimony with us this morning.
As a former educator, school board member, and the founder
of the 5,000 Role Models of Excellence Project, a dropout
prevention mentoring program in the Miami-Dade County public
schools, I have been sending hundreds of boys of color to
college for nearly 25 years, also training them for the
workforce in general. I know how difficult it can be to afford
to go to college. That is why I support Pell grants and Parent
PLUS loans, and upon graduation being able to pay off these
loans in a manner that makes sense.
I've introduced the Student Loan Borrowers Bill of Rights
to provide basic protections to student loan borrowers, and the
Student Loan Debt Protection Act to allow a borrower to
discharge in bankruptcy a student loan. Less student debt
benefits not only the student loan borrowers, but our Nation as
a whole, since it allows them to have additional purchasing
power which in turn boosts our economy, creates jobs, and
increases the tax base.
Dr. Akers, the existing Parent PLUS program makes Federal
loans available to the parents of undergraduate students who
are unable to pay tuition upfront. And these loans are
particularly important to students at Historically Black
Colleges and Universities. Similarly, Federal loans to graduate
students help ensure that graduate education isn't restricted
only to those able to pay out of pocket or find a cosigner with
sterling credit. You've called for scaling back or eliminating
Federal loans to parents and graduate students and turning this
role over to private lenders.
Private student loans carry higher interest rates than
Federal loans for borrowers who have faced economic challenges
in their lives. Furthermore, Federal loans to parents and
graduate students already have the lowest default rates across
all Federal student loans.
Why, why should we replace this system with one that will
charge more to students who already face economic
disadvantages, if it doesn't shut them out entirely, Dr. Akers?
Ms. Akers. Thanks for the question. It's my belief that the
role of the Federal Government in student lending is to step in
where the private market would fall short. We -- it's a bit up
to speculation as to whether or not the parents currently being
served by PLUS would be completely served by the private
market, but I believe to a large degree they would. And the
same is true for graduate students.
We shouldn't necessarily have a system of Federal loans or
financing higher education that relies on students having a
parent who can borrow for them to access higher education. I
agree with you that access is an important issue to solve, but
I disagree that providing students loans when they're unlikely
to be able to repay them is the best mechanism to do that. I
prefer the access mission be addressed through the direct
subsidies, through Pell grants, and potentially through the Tax
Code.
Ms. Wilson of Florida. Do you agree that existing racial
disparities and family wealth and income mean that the private
market would charge more on average to minority students and
their families? Wouldn't the change you suggest have a
disproportionate effect on these students?
Ms. Akers. Yes, that's exactly right. So any sort of
introduction of underwriting in the student loan market would
likely have implications for access, and certain groups of
disadvantaged students would be impacted more severely. I would
argue again that subsidies is the correct place to address that
issue and not through the availability of debt.
Ms. Wilson of Florida. Why should we support a policy that
would make it harder to close racial gaps in educational
attainment? Do you think that's important?
Ms. Akers. Absolutely.
Ms. Wilson of Florida. But why should we support that kind
of policy to make it harder --
Ms. Akers. I think --
Ms. Wilson of Florida. -- for racial gaps to be closed in
higher education?
Ms. Akers. Because I believe that's the wrong instrument
for closing that gap. As I said, I would prefer to see
subsidies used for that objective.
Ms. Wilson of Florida. This question is for Dr. Cruz. It's
important that we have an understanding of all of the variables
and factors affecting the rise of college costs. I understand
that State disinvestment has led to tuition increases. What
else has driven the cost of colleges public 2- and 4-year
institutions, Dr. Cruz?
Mr. Cruz. Thank you, Congressman Wilson. State
disinvestments is the primary driver of cost in public
education. Other considerations include compliance, as Dr.
Kirwan mentioned earlier, but more importantly we have issues
about around personnel costs, the rising cost of health care,
and pensions for our employees. We have energy costs, we have
increases in the cost of maintaining and upgrading a tech
infrastructure on our campus to provide our students with the
best equipment, in smart classrooms and whatnot. We have
increased costs in our library subscription services for the
journals.
But also, we also have increased costs because we realize
and we have committed to ensure that our students are
successful. And because of the needs that our students have, we
have to direct more of our energy toward ensuring that they
have the support services inside and outside of the classroom
to succeed. So that's also been a primary area where we have
had to try to innovate given the State disinvestments in order
to make it work all together.
Chairwoman Foxx. The gentlewoman's time has expired.
We will send every member of the committee the link to the
report that Dr. Kirwan is referring to, but that's what it
looks like. And as he said, there are 59 recommendations. I'm
going to read it this week, but I'm told by other people who've
read it that you can do it on an airplane ride to a reasonably
far away place. So we're going to test that out. But everybody
will get a link to this. It actually is in the link -- it's
mentioned in the memo that went out about this hearing, but
we'll get another one to you.
Mr. Byrne, you're recognized for 5 minutes.
Mr. Byrne. Thank you, Madam Chairman.
Dr. Kirwan, I am the former chancellor of postsecondary
education from the State of Alabama. And I have a great
appreciation for the accreditation process. I think it made the
institutions that I was responsible for better. I will admit
that there were some interesting interactions between some of
my institutions and the creditors, but I think it made the
institutions better. I think it also helps in our efforts to
safeguard the taxpayers' money.
Therefore, I was really interested in the part of your
report that highlighted regulations that impact institutional
accreditation. And I wonder if you could expand on that just a
little bit and tell us if you have any specific recommendations
with regard to that.
Mr. Kirwan. Thank you very much, Congressman, for that
question. Like you, I feel the accreditation process is a very
important instrument. It was created to help institutions
improve their academic performance.
One of the concerns that the commission expressed in its
report is that over time, the accreditation expectations in
requirements placed on the accreditors has included a lot of
additional requirements unrelated to the academic mission of
the institution. I mean, for -- one small example is that
accreditors have to certify that institutions are meeting their
fire code laws, and that's not an area of expertise of the
people doing academic accreditation.
So I think sort of taking accreditation back to its
originally intended purpose would be one recommendation in
getting rid of some of the excessive requirements imposed on
accreditors would be one.
Secondly, I'm a great believer that accreditation needs to
ramp up the accountability that institutions must need. Putting
greater expectations on improved retention and graduation
rates, we need to find the means within the accreditation
process to ensure that institutions have improvement plans in
place and are under pressure to improve completion rates.
And thirdly, I think we need a system of accreditation that
would respect a differentiated accreditation process.
Institutions that are high performing, who finances are well
placed, shouldn't be expected to jump through the same hurdles
as institutions who are underperforming, low graduation rates,
challenge financials. So we need to develop in this country, I
think, a differentiated system of accreditation that respects
and puts emphasis on those institutions that are in the most
need of improvement.
Mr. Byrne. I appreciate that response. I think it's spot
on. We talked to one of the accreditors -- two of the
accreditors last year. They were talking about how they can
make the sort of differentiation that you just alluded to, so I
hope they'll do that.
Dr. Akers, I want to talk to you about refinancing for a
second. Would a Federal refinancing option actually help
struggling borrowers? And are there any refinancing options
currently available?
Ms. Akers. Sure. So refinancing Federal student loans would
actually help all borrowers. The problem is that it would help
the borrowers who need it the least the most. So it's the
borrowers with the very high balances that would benefit the
most financially from the refinancing. We know from research
that it's the borrowers with less than $5,000, many of whom
didn't complete a degree, who are struggling the most to make
student loan payments, but also to make other sorts of
financial obligations.
If we were to do refinancing, which I don't think is the
best approach to moving forward, I think it would need to be a
highly targeted program and one that aims to devote resources
to supporting the people who are really struggling.
Mr. Byrne. Madam Chairman, I appreciate this entire panel.
I think this has been very useful.
Higher education has been often used as the means of moving
up in society, but higher education is highly differentiated in
America, which is our strength. We've got not-for-profits, for-
profits, religious schools, 2-year colleges, 4-year colleges,
and we're not a one-size-fits-all Nation. And we shouldn't have
Federal policies trying to put this one-size-fits-all on our
institutions of higher education, because that diversity is the
great strength of what we provide to our people.
And I yield back.
Chairwoman Foxx. Thank you, Mr. Byrne. We can always count
on you for giving us lots to think about.
Congresswoman Adams, you are recognized for 5 minutes.
Ms. Adams. Thank you, Chairwoman Foxx, Ranking Member
Scott, for hosting this hearing to discuss the importance of
higher education. Education is clearly the pathway to a better
life and upward mobility. I want to thank the witnesses today
for sharing your thoughts on the current landscape of higher
education.
I am a former college professor and administrator, 40 years
at Bennett College in Greensboro, North Carolina. And I'm a
first generation, I was a first-generation college graduate. So
I know postsecondary education leads to economic mobility and
opportunity. Higher education can open doors, but working
families, low-income and minority students feel the burden of
student loan debt and the challenges to achieving a high-
quality higher education.
Approximately 8 million individuals rely on Pell grants to
pay for college. The Pell grant now covers just 29 percent of
college costs at public universities compared to 79 percent
almost 40 years ago when I got started. As a result, many low-
and middle-income students find themselves acquiring loans to
finance their education. And to make matters worse, statutory
adjustments that make sure the Pell grants keep pace with
inflation will soon expire. Republican budget resolutions over
the past several fiscal years have proposed making deep cuts to
Pell grants, balancing the funding needs on the backs of
college students who are working hard, sometimes two and three
jobs full-time to pay for school.
Dr. Cruz, can you explain to us the importance of
protecting Pell grants for the students where you've worked?
And what could policymakers do to responsibly expand and
strengthen the program for the next generation of students?
Mr. Cruz. Thank you, Congressman Adams. It is hugely
important, the Pell grant is. I believe that when you think
about how much low-income students are expected to contribute
towards their education, approximately 76 percent of their
household income after all aid is taken into account, you have
to realize that the Pell grant program as the foundation upon
which they finance their education is of utmost importance.
So there are a few things that I think can be done in the
short term. For certain, we should extend the increases due to
inflation adjustments moving forward. We should think about
bringing year-round Pell back, because it allows students to
progress through their degree at a faster pace. We should also
consider taking steps over time to try to get the buying power
of the Pell grant program back to where it should be. As you
know, when it started, it was about 75 percent of the total
cost of attendance. It's now around 25 percent. So can we get
it to 50 percent in the next 10 years? So those are some of the
areas that I think should be given some attention.
Ms. Adams. Thank you. In your written testimony, you
discuss how inequitable policies and practices impede our
ability to fulfill promises of opportunity and upward mobility.
Historically Black Colleges and Universities, HBCUs, while they
only make up less than 3 percent of our institutions of higher
education, graduate 20 percent of all African American
undergraduates, 25 percent of African American graduates in the
STEM field. These schools enroll a disproportionate number of
first-generation, low-income and minority students who must
borrow at higher rates.
So what role do you see Historically Black Colleges and
Universities and minority serving institutions playing in
closing the intergroup inequities in higher education?
Mr. Cruz. They have a crucial role. One, because they serve
the majority of the underrepresented students in our country.
And without us being able as a country to educate them better
and get them with the degrees they need to be successful, we
will never once again lead the world in educational attainment.
Also, it's important that they are resourced adequately so
that they can carry out this mission. Because the fact of the
matter is that they have the experience dealing with these
populations and it is in their mission. So to the extent that
we can support these institutions to narrow achievement gaps
across the country and also serve as models for others that are
now just starting to manage the new demographics of this
country, I think we'll be successful.
Ms. Adams. Thank you. So in your opinion, the diminished
purchasing power of Pell grants and reduced State and Federal
investment in higher education does impact students who attend
these schools that I'm talking about?
Mr. Cruz. It significantly does.
Ms. Adams. Thank you, sir.
Madam Chair, I yield back.
Chairwoman Foxx. Thank you, Congresswoman Adams.
Congressman Hunter, you're recognized for 5 minutes.
Mr. Hunter. Thank you, Madam Chairwoman. Good afternoon,
everybody.
Dr. Akers, my question is to you. When you opened up, you
said that college is a gamble. That's one of the quotes that
you made today. One of the ways that you reduce risk off of
anything, you buy down risk, is by having knowledge. Right? And
the more that you're made aware of the outcomes of students
going to any university, the more -- you're more informed in
your decisionmaking when kids choose what university that they
want to go to.
In a recent publication for the Manhattan Institute titled
Five Reforms to Improve Higher Ed, you ranked the repeal on the
ban of a student unit-record system as priority number two for
the higher ed act. Specifically, your quote is: ``As a first
step to ensuring that the Federal Government can generate and
publish comprehensive data on student outcomes, Congress and
the new administration should lift the ban.''
As you and many of my colleagues know -- in fact, Mr. Polis
is on this bill, Ms. Davis is on my bill, and it's the Student
Right to Know Before You Go Act. Marco Rubio was a cosponsor,
Speaker Ryan was a cosponsor. That act accomplishes that goal
that you mentioned, while at the same time providing program
level student outcome data institutions every 2, 6, and 15
years after completion.
So the question is, how would unlocking this data improve
our knowledge of student outcomes, and why is it important?
That's the first kind of softball opener.
Ms. Akers. Sure. Okay. I appreciate that. We have a market-
based system of higher education, albeit one that has a very
large degree of Federal and State intervention. What that means
is that we need to rely on consumers to play a role in policing
institutions for quality.
There is a huge problem of asymmetry of information in this
market. Without access to government data on student outcomes,
consumers would have a very difficult time holding institutions
accountable for the value that they provide.
Mr. Duncan. So right now at this point in time, we use the
Integrated Postsecondary Education Data System, IPEDS. How
would repealing the ban on the student unit record allow that
to work more coherently and have everything work together so my
-- I've got a 16-year-old son. He can look at SDSU, UCSD, USD
and say if I'm majoring in engineering, in 5 years, I'll be
making -- the average kid makes this much money. It takes him 6
months to get a job if going -- getting that degree from that
university. We then have knowledge that we're armed with and we
can make better decisions.
What would it do with IPEDS if you repeal the ban?
Ms. Akers. I'm sorry?
Mr. Duncan. Specifically. What would repealing the ban, how
would that play in IPEDS, which is the Integrated -- that's the
way that we do this now.
Ms. Akers. Sure, sure. So essentially, repealing the ban
would create a more comprehensive data system which would
capture the universe of borrowers rather than a sample of
borrowers currently captured by survey data.
Mr. Duncan. Because right now, what do they do? They --
each university has people call out, just call people, right,
every day. So you graduated 5 years ago. Do you have a job and
how much do you make? Right?
Ms. Akers. To be honest, I'm not exactly aware of that
process.
Mr. Duncan. That's how they do it.
Ms. Akers. Right. So the connection of IRS records on
earnings with Department of Education data would create --
rather than a survey level data which is subject to reporting
error, it would be more comprehensive and more correct.
Mr. Duncan. We would know exactly how much people are
making after getting certain degrees from universities, and all
anonymously, correct?
Ms. Akers. That's right. That's right. And the other
advantage is because of the greater availability of data, we
could have more granular level outcomes. So as was previously
mentioned, program level outcomes could be reported in addition
to institution level outcomes. The problem with reporting
institution level outcomes as it's done currently, it obscures
a lot of the information that there is variation outcomes
across programs within institutions.
Mr. Duncan. And I'm just curious too, you didn't mention
this at all in your opening statement, but you rank it as the
number two priority to fixing higher education.
Ms. Akers. Uh-huh.
Mr. Duncan. Okay. All right.
Dr. Kirwan, I've got a question. The same question to you
but not representing a Task Force on Federal Regulation of
Higher Education. But based on your experience at the
University of Maryland, what is your take on repealing the ban
on the student records?
Mr. Kirwan. Well, as you -- thank you, Congressman. As you
point out, this was not an issue that the Task Force addressed.
If you're asking my personal --
Mr. Duncan. If you would, just step outside of that. If you
would, just answer personally.
Mr. Kirwan. You're asking my personal view as a former
university president. I actually believe that the access to
unit-record data would be extremely valuable in higher
education because it would provide a means, not just as Dr.
Akers mentioned, but also in terms of improving performance.
You'd have a real sense of what's working, what isn't working.
Mr. Duncan. Competition between universities?
Mr. Kirwan. Exactly.
Now, I also recognize there, you create an enormous
database like that, there are confidentiality issues, and
that's a concern that needs to be addressed. But assuming that
can be addressed, I think it would be an important tool for
improving the performance of higher education.
Mr. Duncan. Thank you very much.
Thank you, Madam Chairwoman.
And if you would, please, I would like to meet with you
later, go over the bill, the Student Right to Know Before You
Go Act, and have you both take a look at it, especially you,
Dr. Akers. All right. Thank you.
Thank you, Madam Chairwoman.
Chairwoman Foxx. Thank you, Mr. Hunter.
Mr. Espaillat, you're recognized for 5 minutes.
Mr. Espaillat. Thank you, Madam Chair, for highlighting the
American Council of Education's task force report. But let me
remind my colleagues that the American Council of Education is
the primary lobbying organization for the Nation's colleges and
universities.
If we imagine for a moment that we were discussing, for
example, the automotive industry instead of colleges here, this
task force would be equivalent to a group of auto executives
and lobbyists talking about regulations they find often
burdensome without anyone speaking, for example, of vehicle
safety or the environment. There may be, of course, things we
can learn from the task force report, but we need to remember
at all time that this is a document that reflects a single
specific set of values and views and cannot represent a broad
consensus across higher education.
Dr. Kirwan, you have referred to compliance and you have
referred to regulations as a -- reasons for the increase, the
spike in the cost of a student's education. If the Department
of Education were to eliminate right now all regulations faced
by, say, Vanderbilt University, which you cite in the report,
would it cut its tuition by $11,000 for students?
Mr. Kirwan. Thank you, Mr. Congressman. I can't speak for
Vanderbilt University, so I don't know what they would do. But
I do want to reemphasize that this commission fully supports
the need for regulation and accountability. There was no
intention in any way to get out from under the expectation of
being responsible for taxpayer dollars to the students and
families we serve. So this task force was about smarter
regulation, not the elimination of regulation.
Mr. Espaillat. But 2 years ago, you and Nicholas Zeppos,
the chancellor of Vanderbilt University, coauthored the task
force report, and testified before the Senate. During his
testimony, Dr. Zeppos highlighted that Vanderbilt spent $146
million annually on Federal compliance, equating it to, and I
quote, approximately $11,000 in additional tuition per year for
each of his 12,757 students.
So if we eliminate these regulations, will there be in fact
a dramatic drop of $11,000 per students at Vanderbilt?
Mr. Kirwan. Well, again, Congressman, I really can't -- I
wasn't part of the Vanderbilt study. That study was not part of
our report. And so I really can't comment on that report or
what Vanderbilt would do. But I think no one is advocating,
that I know of, in higher education the elimination of all
regulations. It is -- the whole essence of this report is
smarter regulation.
Mr. Espaillat. Dr. Cruz -- thank you, Dr. Kirwan -- can you
tell me a little bit about the work that colleges and
universities are doing to better train students for jobs of
today and tomorrow, particularly in the county of the Bronx
where the Lehman College is at, where I know that the
healthcare arena is the primary employer of folks in that
particular county. Can you tell me what kind of activities,
what kind of initiatives you're taking at Lehman College to
ensure that there are more jobs available for the young people
that attend your college?
Mr. Cruz. Sure. So we have several initiatives at Lehman
College through which we interact with our community college
partners, industry, and the labor unions, particularly in the
healthcare industry with 1199 SEIU. And so we have a broad
portfolio of initiatives through our adult degree program in
particular. One of them, for example, involves developing
online programs for in-service healthcare workers so that they
can access higher-paying jobs that haven't been already
identified by the union and the health industry locally.
And more recently, we did a public-private partnership in
the high tech area in augmented reality and virtual reality
through which we are collaborating with a major vendor in the
country to train new coding experts in this area for the growth
that we're seeing in the Bronx in the tech field.
Mr. Espaillat. Thank you so much, Dr. Cruz.
Thank you, Madam Chair.
Chairwoman Foxx. Thank you very much.
Mr. Mitchell, you're recognized for 5 minutes.
Mr. Mitchell. Thank you, Madam Chair. And thank you to
everyone for being here.
Let me continue on some of the questions that Mr. Hunter
raised during his questioning. Dr. Akers, you referenced in
your testimony that, unfortunately, there are many that make a
losing gamble in going into higher education, be it
postsecondary college or a postsecondary program. Isn't part of
the problem that they're facing is exactly what Mr. Hunter
references, which is a lack of programmatic success data at
college and universities? You have institutional data, but you
don't have any data on specific programs within the university.
Ms. Akers. We do see that there are systematically bad
outcomes coming from particular institutions and particular
programs. This would lead you to believe that if students were
armed with better information on the front end, they could
choose institutions where they'd have a higher likelihood of
success. So yes, I think that's correct.
Mr. Mitchell. Does anybody else on the panel have any
opinion on that question? Mr. Gilligan?
Mr. Gilligan. Yes. So Capella fully agrees that
institutions should be transparent about outcomes and be
accountable for outcomes. And the more that we can make
information available, I think the more competitive the initial
will be, the more opportunity for innovation it would be. So we
fully support that.
Mr. Mitchell. Anybody else? Dr. Kirwan?
Mr. Kirwan. I echo my colleague's comment.
Mr. Mitchell. Okay. Thank you.
Another question for you. Let's talk a little about gainful
employment for the sake of -- you're all aware of the history
of it, I won't repeat it, it's got a pretty checkered history.
Let's be honest about it. How long are the regs? The new regs
are, what, 650 pages or something like that?
Question for you, did the commission -- Dr. Kirwan, did you
consider applying some version, albeit maybe irrational
version, if you can find one, of GE across the higher education
sector that, in fact, for purposes of accountability for all
institutions, for all programs, that gainful employment should
be applicable for all higher education? Did you consider that,
and what were your thoughts?
Mr. Kirwan. Well, the commission strongly supported the
concept of ensuring programs of a vocational nature that
prepared students for successful careers of study. There was
considerable concern about the gainful performance regulation,
not only about the way it was developed, but the fact that it -
-
Mr. Mitchell. Let me stop you, Dr. Kirwan.
Mr. Kirwan. Yes.
Mr. Mitchell. The distinction of vocational I think for me
is troubling.
Mr. Kirwan. Right, right.
Mr. Mitchell. It's troubling because, as one of my colleges
on the other side of the aisle indicated, that the journal is
in school, going to pediatrics, that those are vocations.
Mr. Kirwan. Right.
Mr. Mitchell. That people are expecting to get a career, to
earn an income and be able to pay their loans and support their
families.
Mr. Kirwan. Right.
Mr. Mitchell. So I think the vocational distinction that's
been made by the Department of Education is at best artificial,
and I have other terms for it that probably can't use in this
hearing.
Mr. Kirwan. Right.
Mr. Mitchell. On a broader scale, across the spectrum of
university programs, is there some rationale why it is we don't
consider gainful employment the gainful outcome for students?
I see Dr. Akers who is anxious, maybe she has an opinion on
it.
Mr. Kirwan. Well, certainly, I think providing data on the
economic gain produced by an institution in its academic
programs should be available and could be very useful to
parents and students.
Mr. Mitchell. And that data is currently not available?
Mr. Kirwan. That's correct.
Mr. Mitchell. Dr. Akers, your opinion?
Ms. Akers. It sounds like I need to work on my poker face a
little bit. But I think the observation you're making is
correct. I have actually suggested at times that gainful
employment might be applied across all institutions, but the
theme of my recommendation is really more that I'd prefer a
more outcome-based system of accountability and one that can be
applied across institutions equally.
Ms. Akers. When we survey students about why they go to
college, 90 percent of them report that among the top reason is
to have better earnings and planned outcomes in the future. So
I'd prefer to see a system of accountability that more better
matches what students are anticipating.
Mr. Mitchell. It certainly was the reason I went to
college, I was the first in my extended family to even attend
college let alone graduate and it certainly was to be able to
pay the bills.
The question for either of you, especially those who are
around for gainful employment when it first came out. Do you
remember the first data dump that was done by the Department
and which institutions topped that list, the first issue of
gainful employment, do you remember that one, sir?
Mr. Gilligan. I believe so, there were some Ivy league
schools I believe that were in that list. Is that what you're
referring to?
Mr. Mitchell. That would be correct. Some very interesting
Ivy league schools, and they were on there because of the cost
of their tuition, not that we don't think they are valuable
programs, correct?
Mr. Gilligan. I assume.
Mr. Mitchell. Thanks very much. My time's almost expired. I
yield back.
Thank you, Madam Chair.
Chairwoman Foxx. Thank you very much. Mr. Takano, you're
recognized for 5 minutes.
Oh, I'm so sorry. I apologize. It's Ms. Blunt Rochester. I
looked at it wrong on the list. I apologize.
Ms. Blunt Rochester. Thank you, Madam Chair and Ranking
Member Scott and to the witnesses. This is a very important
issue.
As a parent of adult children who are paying student loans,
as a former Secretary of labor and State personnel director in
the State of Delaware, and also as a person who has a lot of
constituents, this is one of our top priorities.
I want to ask, in Delaware we've had some great
partnerships between our colleges and our employers. Mr.
Gilligan and Dr. Cruz, how is labor market information used in
developing courses and programs? And also, do you have
suggestions to continue or improve the use of this kind of
information?
Mr. Gilligan. So thank you for the question. We do use
labor market data. We use different sources of data to
understand not only where is the job growth today and the
demand today, where is the demand going to be in the future,
and what are the skills and competencies that are going to be
required by employers in those areas. And then we use that to
inform the design of our curriculum.
Mr. Cruz. We have a similar structure through which we have
industrial advisory boards and also, as I mentioned in my
previous response, we work directly with the local unions to
identify what the skill gaps are and what the opportunities
are, and with that we drive our curriculum development,
particularly in the part of continuing and professional
studies.
Ms. Blunt Rochester. Is there anything that can be done to
improve the process for you? Anything that -- whether it's the
relationship between Department of Labor, economic development,
business roundtables, is there anything in particular, any
suggestions or strategies?
Mr. Gilligan. I don't have any particular suggestions
today, but I think it's a good question. If we could think
about that and get back to you, we'd appreciate that.
Ms. Blunt Rochester. All right. And then another question I
have for Mr. Gilligan. Many of Capella's students are in
programs such as education, public policy, nursing and health
services, and may stand to benefit from the Public Service Loan
Forgiveness program. One of today's witnesses Dr. Akers
mentioned that it may make sense to eliminate this option.
Mr. Gilligan, is this benefit important to your students
who are pursuing careers in public service?
Mr. Gilligan. So I would say most Capella graduates earn a
very attractive income. And we know that as a fact from the
gainful employment data that's published by the Federal
Government. And we experience very low core default rates. So I
think our learners are pursuing their degree for career
advancements and economic opportunity. They are paying their
loans back. I'm not sure income base repayment is -- or loan
forgiveness rather is an important consideration up front.
That's not to say there aren't some of our graduates that take
advantage of it. And I would say as long as it is not creating
perverse incentives, it's probably a very productive tool.
Ms. Blunt Rochester. Dr. Cruz, I don't know if you wanted
to add to that.
Mr. Cruz. I think in general loan forgiveness programs are
important. One thing that I would look at more from the macro
level is who are the winners and who are the losers. Anything
inequitable, use the funds, in terms of the lowest income
students being able to get their fair share.
Ms. Blunt Rochester. Dr. Akers, I don't know if you want to
add any more to it.
Ms. Akers. Sure. I will just clarify again that, you know,
the intention of that policy proposal is not to remove
subsidies entirely from public service, but rather to put them
into another mechanism that would be more fair, and more
effective, at encouraging those types of employment.
Ms. Blunt Rochester. Thank you.
I yield back my time.
Chairwoman Foxx. Thank you very much. Good reason I should
recognize you when you are on the line.
Mr. Allen, you're recognized for 5 minutes.
Mr. Allen. Thank you, Madam Chair. And coming from the
business community and as far as technology and efficiency, it
looks like we're doing things the same way we've always done
them in education.
My parents were involved in education. In fact, one of the
funniest stories that I heard was when I attended the college
orientation of one of my children and the Dean of the freshmen
said that a father called him and was very upset because his
son could not schedule freshman English the first semester. And
so the Dean said, well, let me get back with you.
So he called over to the English department and sure enough
the 9 o'clock class, and the 10 o'clock class, and the 11
o'clock were full, but the 8 o'clock class was wide open. And I
said, wow, we need to figure out some way to motivate folks and
get a little more efficient in what we're doing and how we're
scheduling things. And of course Stephen Covey said, you've got
to begin with the end in mind, in the seven habits of highly
successful people.
So with that it looks like, to me, that we've got a long
way to go in higher education as far as implementing a lot of
the policies that we've implemented to become one of the most
productive business and industry institutions in the world.
What do we got to do to catch up?
Dr. Akers, did your research look at productivity and
efficiencies and how we really turn out folks that we need for
-- again the job placement and all that sort of thing?
Ms. Akers. That's not something I studied explicitly, but I
would be happy to follow up in my written remarks.
Mr. Allen. Okay. Dr. Kirwan, your commission did you all
look at -- I mean, like, our lieutenant governor said that we
had over 5,000 liberal arts graduates in the State of Georgia,
but about 250 job openings. I said, well, where do these kids
go? And you know, mainly service jobs. How do we correct that?
Mr. Kirwan. Well, this was not an issue we were asked by
the HELP Committee to look into. We were focused on existing
regulations in the regulatory environment. But I'm actually
quite encouraged by what's going on in higher education right
now. There is a tremendous amount of innovation bubbling up at
our institutions. We have come to embrace the potential of
technology in the learning sciences to dramatically improve the
way student's courses are taught, students are learning --
adaptive learning, the use of MOOCs, these massively open
online courses. The partnership between the two- and four-year
sector, the reverse transfer. You know, I feel very confident
in the next 5, 6 years we're going to see a significant
improvement in completion rates.
Mr. Allen. How about cost? How do we reduce cost?
Mr. Kirwan. Well, you know, I think -- we're in a situation
now where I do not anticipate significant increases in cost. I
think institutions are working hard to find ways to use
technology and innovation to hold down the growth in cost.
The States are not going to be able to invest significant
new funds in public institutions. I think most States are
putting some kind of limit on increases in tuition. So I
honestly believe we've passed through this period of huge,
significant tuition increases. And this is encouraging in
putting pressure on institutions to find new and better ways to
deliver courses. So I actually feel quite optimistic about the
future in that regard.
Mr. Allen. Yeah. That's good to hear.
Mr. Gilligan, we talk about work study programs. Obviously,
when we look at a resume in our business, we would look at not
only education, but experience of that student. And it sounds
like you -- that's something that you're -- most of your folks
already have a job getting --completing their education. How do
you see the importance of that?
Mr. Gilligan. Well, sir, as you said, most of our students
are working adults, they are employed. About 75 percent of them
are going on to get a graduate degree. So in that context work
study really doesn't come into play.
What they are looking for are competencies and skills, that
are in high demand by employers, that are allow them to
practice at the top of their profession. So we have a very
strong focus on linking our curriculum to the demand side which
is the employer.
Mr. Allen. Okay. I yield back.
Chairwoman Foxx. Thank you very much.
Mr. Allen. Thank you.
Chairwoman Foxx. Mr. Takano, you're recognized for 5
minutes.
Mr. Takano. Thank you, Madam Chair.
The Borrower Defense to Repayment Rule protects taxpayers
and students alike against fraudulent colleges seeking to
profit off Federal funds without providing a quality education.
Perhaps more importantly it provides desperately needed relief
to students who were scammed by schools that shouldn't have had
access to Federal financial aid in the first place.
Jose Morales, a veteran and student from my State, said, I
quote, ``I told the recruiter when I signed up that I couldn't
afford any payment plan since I didn't have enough financial
aid to cover the cost of tuition. After a few minutes the
recruiter came back and said I received a scholarship that
would cover the costs. When I started class, there was no
evidence of any scholarship in my account, but there was a
balance due of about $1,400. I called the recruiter and she
said she forgot to submit the scholarship application and she
would get to it next week. There was a continuous conversation
and her scholarship never appeared. The recruiter lied to me to
get me to sign up and now I have loans for a degree I can't
complete'' end quote.
The Borrower Defense Rule is a commonsense protection for
students. If the choice is between protecting student borrowers
who were lied to by their schools or protecting an industry
that wants relief from this rule, I will protect the student.
As Members of Congress, we must ensure that our veterans
and Active Duty servicemembers and their families have the
information and support needed to succeed in college. It is our
responsibility to protect these individuals who have and are
currently serving our country. I've heard stories from student
veterans all across California who were defrauded by for-profit
institutions. Students were told their credits would be
transferrable by recruiters or that they would receive
scholarships that never appeared.
Dr. Cruz, why do you think veterans are such a target for
these institutions?
Mr. Cruz. I believe they are such a target because of the
90/10 loophole. For-profit institutions are required to secure
no more than 90 percent of their revenues from public funds.
And because of a congressional oversight many years ago the GI
Bill was not considered as a public source of funds. So that
created an incentive to try to bring more ``nonpublic'' public
dollars into the equation for the for-profit sector to continue
to operate.
As you know, there are more than three dozen Attorneys
General across the country now that are looking into this. And
I believe that it's important that this loophole be closed to
take away that incentive.
Mr. Takano. Dr. Cruz, are you telling me this loophole
specifically incentivizes for-profit institutions to target our
veterans because their money is not counted as part of the
total Federal funding that the school receives?
Mr. Cruz. Exactly. Yes.
Mr. Takano. That's incredible. Given that veterans are such
a target, what can Congress do to protect these veterans --
these students?
Mr. Cruz. The same that can be done for students in general
through the strengthening of the general of the gainful
employment provisions, clamping down in the incentive
compensation area and also borrower defense.
Mr. Takano. Well, at this time, just this past week the
committee received a letter signed by 16 organizations
representing service members and veterans across the U.S.
urging us not to weaken the gainful employment rule or the
defense to repayment regulation and not to eliminate the ban on
incentive compensation. I would like to submit this letter for
the record. It's down there, Madam Chair.
Chairwoman Foxx. Without objection.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Takano. I want to turn now to the gainful employment
regulations, Mr. Gilligan. There was mention that the Ivy
League schools have made it on to this list. And I'm thinking
that we're referring here to a program at Harvard University,
my alma mater. It's a nonprofit institution of great national
repute, but they have an arts program that is really expensive.
It's, like, up to $78,000 per year. And the expectation is that
graduates, not all of whom will make it to the big league, are
paid $32,000 a year.
Do you think that the American taxpayers should shoulder
that risk of students admitted to this program -- I understand
that Harvard itself has voluntarily put a pause on students
coming to this program to reevaluate this program.
Don't you think the gainful employment regulation was very
useful, even in detecting within our elite institutions
maldesigned programs?
Mr. Gilligan. Well, I would say that the gainful employment
regulation is designed to ensure that students can earn an
income at a high enough level to repay their loans. And the
problem that I have with the rule it that it's a one size fits
all metric. And I would argue that as an example, a student
that attends a vocational school maybe to become an auto
mechanic or a cosmetologist, We apply exactly the same debt to
income threshold to that student as we do to a say a teacher or
a principal of the school who was getting a doctoral degree to
become student of schools, who's going to earn a return on
investment over a lifetime.
And so part of problem with the rule in my opinion is the
one size fits all nature to it. The other is it only applies to
for-profit schools. So if we think it's good policy that
eligibility for Federal financial aid should be tied to debt to
income thresholds, it ought to be, in my view, a level playing
field for everyone in the industry, for-profit and not for-
profit. And we've got to recognize the difference in programs.
Mr. Takano. I wish I could explore it further, but my time
has run out.
Thank you.
Chairwoman Foxx. Thank you very much.
Mr. Rooney, you're recognized for 5 minutes.
Mr. Rooney. Thank you, Madam Chairwoman.
Dr. Kirwan, thank you very much for your testimony here and
for working on the task force. You identified and talked about
a lot of costly burdensome government mandates that drive up
the cost of education. But you didn't mention much about
administrative costs.
I've got an article here and few papers I am going to ask
Ms. Foxx to put in the record, if that's okay.
Chairwoman Foxx. Without objection.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Rooney. They talk about administrative costs that have
skyrocketed since 1975. Administration to student ratios have
skyrocketed while the student to faculty ratios have stayed the
same. Administrative costs overall have gone from 9 percent to
15 percent of the college budget since 1975. And the number of
administrators in public universities has gone up 66 percent
and private ones 135 percent.
So I've got two questions for you. One is what can we do
about this, which has got to be part of the excessive cost of
education, which has gone up faster than anything except
tobacco products since 1980 . And the second question is
referring back to one of questions earlier that if those 59
recommendations were taken and that $11,000 a student, could be
saved, don't you think the free market would work to drive the
tuition prices down and some of that savings would be reaped by
students?
Mr. Kirwan. Thank you, Congressman, for those questions. As
I said earlier in my testimony, if we had a more streamlined
regulatory system I think it would lower the cost to our
universities and would have some positive effect on tuition
levels.
You know the issue of -- and obviously excessive growth of
administrators is something that needs great scrutiny and
should not be tolerated when as we look at the cost of
education. On the other hand, sometimes we overlook the fact
that the non-instructional staff play a very important role in
the institution. I'll just give you one example, Georgia State
was one of the first universities to use big data to analyze
student retention and graduation rates. And what they learned
was using big data is that there were certain moments in a
student's time at the university when intrusive advising was
absolutely essential in terms of keeping that student on track
to graduate. So they invested significant money in bringing on
these professional advisers and they increased their graduation
rate by 15 percentage points.
So we have to be very careful when we talk about the growth
of administration. We need to know what are these
administrators doing and are they playing a role in helping
students be more successful at our institutions?
Mr. Rooney. I'm sure there are a lot of important
contributions in that respect, but there's also significant
increases in salaries of university presidents, vice
presidents, vice presidents for vice presidents. And this data
is replete with the number of people that are earning over $1
million that run universities and half a million dollars for
vice presidents. And maybe it's just that I come from the
construction business, but that's a lot of money.
My question for you and for the experts is how do we get it
under control rather than just talking about how to finance it
all the time, how do we get cost under control?
Mr. Kirwan. Well, I think the reality of what -- all I can
speak to is the public sector. And the reality of the declining
investment, by States and public higher education, the great
resistance to any kind of significant increase in tuition is
putting a new kind of constraint on the growth of cost of
administrators and salaries.
And I have to let you know that I never earned a salary of
that magnitude and I think that very few people in the public
sector do.
Mr. Rooney. I have got just a few more seconds. I would
like to thank Dr. Gilligan for the important contribution that
you all are making to preparing people to do the kind of jobs
that we have out there right now and that we need, and for the
incredible innovation of changing from time-based arbitrary
rules to this direct assessment of the students performance.
I am also going to ask to put Clay Christensen's article in
the record about mastery-based learning, which is the same
thing.
[The information follows:]
[Extensive material was submitted by Mr. Rooney. The
submission for the record is in the committee archive for this
hearing.]
Mr. Rooney. And so my question for you is with 50 percent
of the people not graduating within 6 years, and another 50
percent defaulting on their loans, don't you think a lot of the
space that you're occupying and that regionally applied
education colleges occupy could fill that for them?
Mr. Gilligan. Is this question for me?
Mr. Rooney. Uh-huh.
Mr. Gilligan. I'm sorry, I didn't quite understand the
question.
Mr. Rooney. The people that are defaulting on loans and
aren't graduating within 6 years, would they be better off in a
different kind of place?
Mr. Gilligan. Potentially. I mean, to be successful on a
direct assessment program you need to bring a baseline of
competencies into the course room. So it's ideally suited for
working adults. It's not necessarily a solution for other
segments. But it doesn't mean there isn't room for innovation
to address those other segments with other models that are
better suited to their needs.
Chairwoman Foxx. The gentleman's time has expired.
Mr. Krishnamoorthi, you're recognized for 5 minutes.
Mr. Krishnamoorthi. Thank you, Madam Chairwoman. Thank you
all so much for coming today and testifying about this very,
very important topic of how do we improve our higher education
system.
Thank you, Congressman Rooney, for asking those questions.
I wanted to piggyback off of something that Congressman Rooney
just asked. And I would like to direct it to Dr. Akers
actually.
Dr. Akers, one of things that my constituents sometimes ask
about universities is they are sometimes perplexed by the
amount of construction that's happening on college campuses and
so forth. I very much care about access and affordability of
higher education, but at the same time I have to address their
questions about are there ways to curb costs, because we all
want to make sure that every student has access to higher
education, but at the same time we have to bring transparency
and assure them that they are getting value for their dollar.
So can you just speak about that for one moment and then I
have some other questions.
Ms. Akers. Sure. Especially regarding the comment regarding
the construction on campuses, I think there's been accusations
that a lot of institutions are creating this luxury experience
for students, which is driving up the cost of education. Most
students are attending public institutions and the cost of
education there is quite affordable. So I'd encourage people to
think about the variety of options that are available to them
and if we can get consumers to be sensitive to price, it will
benefit them individually, but also put pressure on
institutions to keep their own prices in line with value and
maybe reconsider some of those construction projects.
Mr. Krishnamoorthi. I understand. And some of those
construction projects are important. And perhaps Mr. Rooney's
former firm was able to participate. I don't know. You know,
it's one of those things where we just have you to keep an eye
on these dollars.
I have a question for Dr. Cruz. givenG that it's in our
Nation's best interest to remain globally competitive and to
sustain an educated workforce, I feel very strongly the Federal
Government must find ways to increase college access and
success.
So I just want to ask you, Dr. Cruz, what in your opinion
are some, you know, very basic ways that the Federal Government
can leverage its resources to improve access and success for
students?
Mr. Cruz. I think there is an opportunity for Federal-State
partnerships that will encourage and incentivize the States to
reinvest in the public higher ed institutions in the States.
And also to do so in a way that's more equitable so that the
campuses that are serving the students have traditionally been
underserved receive the resources they need to get those
students through their degree quicker. So that's one particular
area. And then of course, focusing on how to strengthen the
existing Pell program and other financial aid vehicles.
Mr. Krishnamoorthi. Now, are there any other ways that the
Federal Government can strategically invest in higher education
to make our students more successful and what will make the
system work better for them?
Mr. Cruz. I think there might be an opportunity to ensure
that the investments that are being made are in fact driving
not only the outcomes higher-- graduation rates, lower time to
degree, reduce achievement gaps-- but also are doing it in a
way that works for all students. So how do we put the equity
variable into those policies and those incentives so that we
can in fact leverage the changing demographics of America on
behalf of our workforce and our competitiveness.
Mr. Krishnamoorthi. Thank you, sir. I have -- in my
remaining time, I had a couple of questions for Dr. Kirwan. You
know, over the last couple of weeks, State governors around the
country have unveiled their budget proposals for their State.
In Missouri the Republican Governor Eric Greitens has announced
$146 million in cuts to State higher education funding. And
then Kentucky Governor Matt Bevin has made clear that he wants
to cut higher education programs as well.
I'm just concerned that when States cut their higher
education budgets, public universities must raise tuition in
order to keep serving the same number of students. So my
question for you, Dr. Kirwan, is would it be safe to say that
cuts to State funding are just making it harder for working
families to send their kids to college?
Mr. Kirwan. I would agree -- yeah, absolutely. I think the
disinvestment in public higher education is doing great harm to
our Nation. Not only do we need to serve the same number of
students, we need to educate a lot more people. And the absence
of public investment is compromising our capacity to do this.
So, when I think about our country and things that keep me
up at night, this is maybe right at the top of the list.
Mr. Krishnamoorthi. Thank you, sir.
I yield back.
Chairwoman Foxx. Thank you very much. Mr. Smucker, you're
recognized for 5 minutes.
Mr. Smucker. Thank you, Madam Chair.
My district I represent is in Pennsylvania. And
Pennsylvania's well-known for its system of higher education.
We have excellent schools that range from great research
institutes to State system schools, to community colleges, to
many private institutions and others.
I was chair of the Senate education committee in the
Pennsylvania State Senate. About 40 to 45 percent of our
budget, at the State level, was for education, which include K
through 12, but as well support for what we called our State
related schools and our State system, and our community
colleges, and our trade schools.
And I want to talk a little bit about our institutions that
provide trade and vocational training, education. We've already
had some discussion. But I think this is an area in terms of
all the options that are available to students, we have many,
many great options that students take advantage of to prepare
them for the life, career, whatever it may be.
But I always felt, in Pennsylvania, that we did not provide
enough support and emphasis for our trade schools, our
vocational training. And students were not aware of the
opportunities there.
And Dr. Akers, I think you mentioned the over celebrated
bachelor's degree. I would never discourage anyone from a
bachelor's degree. We know there's a lot of value to that, but
there are other options that people -- that students and
families at times are not familiar with.
And I just want to talk, just very briefly, about an
institution in my district, Thaddeus Stevens school of
technology, this is a 2-year school. The demand for their
students far outpaces the number of students that are
graduating. In fact, it is so bad that for a job skill or job
fair for about 200 students available, there are 450 companies
at this job fair. They lose students because they get job
offers before they graduate.
I was at an event there, turned around talked to some
students who were behind me. One student had been there for 3
weeks and already had an outstanding job offer. Their placement
rating is 98 percent for the field for which they were trained,
their average salary leaving -- average earnings, leaving the
school, is well over $45,000, some students earning $100,000
within a year of leaving the school.
I think we need many, many more institutions that are
providing those kind of services. And, you know, I'm not sure
that as a public policy that we place enough emphasis on that.
And as we are reauthorizing the higher education system or
Higher Education Act, I should say, Dr. Akers, are there
particular ideas, suggestions that we would have -- that you
would have for us to help elevate the importance or at least
the opportunity that's available with the trades education?
Ms. Akers. Sure. I agree that we do need to put generally
more emphasis on vocational and trades. As I said earlier, I'd
be happy to follow up in my written remarks with specific
recommendations for how policy can achieve that.
Ms. Akers. It's worth noting that currently those intensive
programs are eligible for Federal student aid, which is one way
of supporting it, there may be others and I would happy to
think more about that.
Mr. Smucker. This is also an unmet need for our businesses.
And to the point I made in regards to the job fairs is that
there's a huge need. We're not meeting the needs of business,
and we're not providing sufficient applicants to fill their
positions.
I was in the construction industry. Our number one issue
was always finding qualified people who are able to do the work
for the jobs that we had available.
Any other comments from maybe Mr. Gilligan, any comments at
all in regards to the question?
Mr. Gilligan. Well, I just would encourage Congress to
continue to think about new models, you know. We have a
historical perspective on what the degree looks like. A very
different way to think about a degree is an accumulation of
competencies over period of time. And so rather than the focus
being on getting a degree, the focus is on, what are the skills
and competencies someone would need to achieve gainful
employment and economic opportunity.
And in an environment where technology is moving so fast
and upskilling and reskilling is going to be required,
education is not going to be a one and done event, it's going
to be over a professional lifetime. We need flexible models
that working adults can take advantage of to stay current with
skills that are in demand.
Mr. Smucker. Thank you. And I look forward to learning more
about your programs. And I think another aspect -- and I see
I'm out of time, but another aspect is we need more
communication, interaction between the business community and
the education community to ensure that we are preparing
students for the jobs that are available.
Thank you, Madam Chair.
Chairwoman Foxx. Thank you. Mr. DeSaulnier, you're next for
5 minutes.
Mr. DeSaulnier. That sounds ominous, Madam Chair.
I just want to thank you and the ranking member for a
wonderful hearing and all the witnesses. It's nice when public
policy actually gets discussed here so thank you very much.
For what is -- I agree with Dr. Kirwan, one of the real key
issues for this country, coming from the San Francisco Bay
area, we talk a lot with a sense of urgency about keeping our
innovation edge, and our patent edge. And of course a lot of
that comes from our -- not just Stanford and Berkeley, but the
State colleges and the private colleges.
So along with that, though, and Dr. Cruz and maybe Dr.
Akers, one of our challenges, and I talk to people particularly
because I am from the East Bay, at the Cal State East Bay
campus, is young people who are waiting for housing. And we
heard this at Berkeley as well. Not so much at Stanford, but it
is still an issue at Stanford.
So these young people who can't get on-campus housing,
obviously it is a very high cost area. I assume it is the same
from what I've read in your case being in metropolitan New
York. How do we help -- I had a bill last session to try to
include a little more flexibility in Pell grants so that with
appropriate level of oversight, so people don't abuse it, allow
some of these kids who are going to take 6 years to get through
school -- most of them are students whose parents didn't go to
college, they are from disadvantaged communities, but they are
incredibly talented based on the merits. So things that you're
doing maybe to address this issue that I know is impactful in
your institution?
Mr. Cruz. So from a practical perspective, public
institutions are left at this point in time to try to identify
other revenue streams that they can then use to help students
through scholarships from alumni, and philanthropists, through
grant programs and contracts to allow us to supplement the
inability of Pell in particular to meet the full cost of
attendance.
I mentioned earlier that of Lehman College students, 50
percent of them have less than $30,000 of family income a year.
While our tuition in the City University of New York is fairly
affordable, around $6,500, the total cost of attendance because
of the cost of living is closer to $22,000.
So to the extent that Congress can look at ways to return
the purchasing power to Pell that it had when I was a student,
when I could not only pay for my tuition and fees, but had a
little money left over to buy my books and pay my dorm, if we
could get closer to that we'll be in much better shape. Maybe
50 percent of the average total cost of attendance in 10 years
might be a goal to think about.
Mr. DeSaulnier. Dr. Akers, have you looked at this in your
work?
Ms. Akers. Not explicitly, but I will sort of echo Dr.
Cruz's remarks in essentially emphasizing that we need to
remember that the cost of attendance far exceeds tuition and
fees. And in many cases the living expenses are in fact much
larger than the tuition and fees.
When we think about what Federal support should be for
higher education, this is an important aspect to consider. I
think this weighs into the discussion about Pell grant funding
and continuing to keep Pell grant purchasing power along with
prices, but also emphasizes the importance of Federal student
loans in playing a role for covering the expense for student.
Mr. DeSaulnier. Thanks. Mr. Gilligan, I see you went to
school in Chestnut Hill.
Mr. Gilligan. Yes, I did, proudly.
Mr. DeSaulnier. Oh. Well, I went to school at a Jesuit
college in Worcester and we used to -- and we used to think
fondly of Boston College.
Mr. Gilligan. I'm familiar with that.
Mr. DeSaulnier. Yes. So maybe one of the challenges I think
for me to understand the return on investment, for what you
have done, is the innovation and certainly the public sector
can learn from the private sector. But maybe compare your
experience at Boston College with your experience now after
being in the private sector, and particularly what I would
imagine is a challenge for you to sustain for your investors a
return on investment, whereas Boston College doesn't
necessarily need to do that.
Mr. Gilligan. Yeah. So are you getting at how can a for-
profit school align the interests of students and tax payers
with shareholders? Is that what you're after?
Mr. DeSaulnier. That was a succinct way --
Mr. Gilligan. Yeah, I got it.
Mr. DeSaulnier. andAnd on an ongoing basis, because if
you're looking at return on investment growth, all the time, to
get that investment, it seems to me to be a struggle,
counterintuitive.
Mr. Gilligan. Yeah. So -- but it's what we do. And I'm not
a educator, I'm a businessperson. So if I could just describe
education as a service business, I've got many years of
experience in service business. The fundamental principle is
you don't have a sustainable business model unless you're
delivering high quality service to your customer. And so that's
translatable into an education environment. And so we run
Capella with a very simple principle, if our learners succeed,
we succeed. And the best brand building investment we can make
is in the success of our learners.
Mr. DeSaulnier. The only thing is you've got to have
growth, right --
Mr. Gilligan. But the way we get the growth it is a virtual
cycle. As our learners succeed, our brand grows. As our brand
grows, more people know about us, more people enroll, it
creates a virtuous cycle.
And our opportunity to earn a profit really comes from our
ability to drive efficiency and innovation in ways to deliver
increasing value to students and learners, at the same time
creating value for shareholders. You know, we've got at 25-year
track record of doing -- we're very proud of it. I think we are
an example that for-profit institutions can play very a
constructive role in the future of higher education.
Mr. DeSaulnier. Thank you. I appreciate that.
Thank you, Madam Chair.
Chairwoman Foxx. Thank you. Mr. Scott, you're recognized
for 5 minutes.
Mr. Scott. Thank you, Madam Chair.
Madam Chair, we've had a lot of talk about the regulations,
there are good regulations and bad regulations, everybody's
good regulations. And in this case, we have the unusual
situation rather than just a bunch of complaints, Dr. Kirwan
has presented 59 specifically identified regulations that are
problematic and recommendations to fix them. So I would
recommend that we have a hearing on those so that we can save
the good regulations and deal with the problematic regulations.
Chairwoman Foxx. We'll see if we can find the time.
Mr. Scott. Sounds good.
Mr. Gilligan, I went to law school in Chestnut Hill. And
that actually dates me, because they moved the law school from
Chestnut Hill to Newton in the late 70s. But back to gainful
employment, one, I think the gainful employment measure applies
not just to for-profits, but for all career schools.
But one of the things you left out was the fact that it
also measures the demographics of the student body. If you
start off with a bunch of high income students, they are going
to do better than if you start off with a bunch of low-income
students. And so the measure of gainful employment
unfortunately measures the demographics of the student body as
much as the quality of the education.
But you know there are some good ones and some bad ones. If
we don't use gainful employment, what do you recommend putting
in its place to separate the good from the bad?
Mr. Gilligan. Yes. So first of all I agree that we need to
risk adjust metrics to reflect the populations that we serve,
otherwise we will only serve the only the highest potential
students, and the people that need education will be left
behind so I certainly support that comment.
You know, I think -- it starts in my mind it starts with
transparency. I think the higher education system in the United
States would work better if all institutions were transparent
about the outcomes that they were delivering for students.
Completion rates, graduation rates, income rates. And when we
begin to see the data, I think that creates a cycle of
innovation.
There are existing regulations in place that the Department
can enforce today, that the Department could have enforced,
before gainful employment, to address let's call it, let's say
the bad actors in the space. I mean, if you are deliberately
misleading students about your programs or defrauding students,
there are mechanisms in place where that can be addressed.
So the idea of saying we expect institutions to be
accountable for outcomes and we want to create debt to income
thresholds, I wouldn't say it's a totally objectionable idea,
but I think it needs to be done with more thought.
Mr. Scott. Thank you. Dr. Akers, you mentioned the FAFSA
form. We know that a lot of people fail to apply for student
aid because they can't get through the form. And a lot fail to
reapply. You mentioned that we should use Internal Revenue
Service information. Is there information on the FAFSA form
that's necessary that you do not find in your tax information?
Ms. Akers. Yes. The FAFSA is more comprehensive than the
information that the IRS would have to be able to do aid
allocations. There would be some cost in terms of targeting of
the aid that would occur.
It's my belief, based on some research that I observed,
that the tradeoff of getting more students into college would
outweigh the cost of any --
Mr. Scott. So that information that you don't get is not --
there's more harm in the complication of the form than not
getting that information?
Ms. Akers. I think that's right.
Mr. Scott. Dr. Cruz, you mentioned -- well, all of you have
mentioned completion rates. Has TRIO been helpful in increasing
your completion rates?
Mr. Cruz. TRIO is an important component of the work that
we do from the standpoint of wraparound services for the
students, first generation students, and low-income students
that need support beyond the classroom.
The fact of the matter is that many of our students across
the country that come from these populations, when they drop
out of college or stop out of college, they are still in good
academic standing. So it's not necessarily they can't manage
the academics, but that they have other issues that they need
support with. So TRIO programs allow us to provide those
counseling, financial and personnel services that they need.
Mr. Scott. There is a question about credit hours and non-
credit hours as eligibility for student aid. Should those who
need remedial work be able to get credit in terms of access to
financial aid, non-credit remedial education, as well as actual
credit hours towards a degree?
Mr. Cruz. I think that if the question is from the
perspective of providing financial aid to cover those remedial
courses, if I understand correctly, then I would suggest yes,
because if the K-12 system failed the students from the
perspective of preparing them for the college work that the
institution has admitted them to do, then I believe the student
should have the resources needed to be successful.
Mr. Scott. Thank you, Madam Chair.
Chairwoman Foxx. Mr. Scott. Would you like to make your
closing remarks?
Mr. Scott. Thank you, Madam Chair. One thing that I would
like to just mention is the bachelor's degree. I think Mr.
Smucker mentioned that there is value in the 4-year, on-campus
liberal arts degree that's very difficult to monetize. But it
certainly is a key to upward mobility in our society. And if
it's overrated, well, that's the way it is. And that should not
be disparaged. There is something about that 4-year, on-campus
liberal arts experience that transforms a person in such a way
that we shouldn't denigrate.
One of the things that this hearing has not talked a lot
about is the importance of education. And I think that's just
because we all know how important it is and so you can get
right to access and completion as the focus of the hearing.
We've had specific targets, one, the FAFSA form and the
other is the State reinvestment. So I hope we can work on these
issues, Madam Chair, as we reauthorize the Higher Education
Act.
Thank you and I yield back.
Chairwoman Foxx. Thank you very much, Mr. Scott. And I want
to thank our witnesses again for coming to testify today and
for the valuable information that you've shared with us. I told
you at the beginning I thought this would be a very good
hearing and I think it has been an excellent hearing.
I don't talk about this all the time, but Mr. Scott alluded
to it in his opening comments. I don't think there's anybody in
this Congress who appreciates more the value of completing a
degree, a 4-year degree than I do. It took me 7 years to get my
undergraduate degree and I was just about to move without
having it and realized I've got to get this degree, I've got to
get it now, it might not happen again. And so I'm very
conscious of that. And I have a degree in English an AB in
English. One of the probably -- people figure the probably the
most useless degree you can have, you know, is an AB in
English. Not qualified to teach, not qualified to do a lot of
things that are necessary to do, but I'm very proud to be one
of those closet English majors.
So again, I don't say that at the beginning of every -- a
lot of our hearings, but I think it's assumed by all of us and
I appreciate Mr. Scott bringing it up that 4-year degrees are
important and they have been always the step to increasing our
mobility in this country.
We have as Congressman Byrne said, the greatest diversity
in education institutions anywhere in the world. And people
come here all the time to get a degree because we have such
wonderful educational institutions and we all appreciate that.
But I do think that we have to bring more accountability to all
of our educational institutions in this country.
You know, I appreciate Dr. Cruz your saying we just need to
increase Pell funding. Well, we see the studies that show the
more money the Federal Government puts in to higher education,
the higher the costs go.
Now, if you only look at what Pell does in terms of paying
for tuition and fees, as Dr. Akers pointed out, it's not so bad
anymore. So anyway, there are a lot of things that we need to
look at that most of us again, if I put a glass up here with --
an 8 ounce glass with 4 ounces of water, I'm going to say it's
half full, somebody is going to say it's half empty. So we look
at things differently.
We've had competency based credits since I was an assistant
Dean of the general college at Appalachian State University and
was able to give people credit for life experiences. My
goodness, why has it taken us so long to get to the point where
that is widespread?
Concurrent enrollment brings down the cost of higher
education. Why don't we do more of that?
Your program, Dr. Cruz, moving forward in reverse, that's
catching on around. Appalachian State University did something
similar to that years ago. So we have lots of things that have
been done, distance education, 40, 50, 60 years ago that have
not simply caught on in higher education.
But I hope that Dr. Kirwan is right, that people are going
to start voting with their feet, and they are going to go to
where they can get the best bargain for their money and their
time.
And I want to really, really commend Mr. Gilligan and other
schools like his who are working at what you said, and I think
it's a point that maybe not a lot of people heard you say, a
degree should be the accumulation of competencies over time.
And in too many cases, students are graduating with a degree
and no competencies. So what used to be an education is no
longer for everybody.
And then the last thing, I cannot get out of this meeting
today without talking about, is Representative Scoot's alma
mater, Harvard, which began as a vocational school. Harvard
began to educate ministers. It was a vocational school. And I
take real exception with using the term vocational, because I'm
assuming somebody said 90 percent of people graduating from
college want to get a job. I'm assuming it's 100 percent of
people who graduate from college want a job.
And so in my opinion, all education is vocational
education. And I think one of the problems that we have with
the issues that were brought up by Mr. Smucker, Mr. Gilligan
and other people is that we have created tiered systems in our
country where we give a lot more credit to the over celebrated
4-year degree and not quite enough credit to the other programs
which are helping people accumulate competencies over time,
that could much later in life, you know, develop into a 4-year
degree, and we know many people doing that.
So you all have brought up many, many issues today that I
think are real food for thought for the members of our
committee. I think you've done a lot to educate all of us.
You've given us some great phrases today from my perspective.
So I want to thank you again. And you have behind you a
very patient audience that has paid attention all day. So thank
you all very much for your time.
And there being no further business and the bell ringing to
vote, this committee stands adjourned.
[Additional submission by Ms. Bonamici follows:]
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[Additional submission by Mrs. Davis follows:]
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[Additional submission by Mr. Scott follows:]
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[Dr. Cruz's response to questions submitted for the record
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[Mr. Gilligan's response to questions submitted for the
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[Whereupon, at 1:21 p.m., the committee was adjourned.]
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