[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

                               __________

  Printed for the use of the Committee on Education and the Workforce


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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.
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    [Whereupon, at 1:21 p.m., the committee was adjourned.]

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