    [House Hearing, 116 Congress]
    [From the U.S. Government Publishing Office]

                              THE COST OF COLLEGE:
                            STUDENT CENTERED REFORMS
                           TO BRING HIGHER EDUCATION
                                  WITHIN REACH

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

                                    HEARING

                                   BEFORE THE

                             COMMITTEE ON EDUCATION
                                   AND LABOR
                         U.S. HOUSE OF REPRESENTATIVES

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION
                                   __________

                 HEARING HELD IN WASHINGTON, DC, MARCH 13, 2019
                                   __________

                                Serial No. 116-9
                                   __________

          Printed for the use of the Committee on Education and Labor

                      [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

               Available via the World Wide Web: www.govinfo.gov
                                       or
                  Committee address: https://edlabor.house.gov

                                  ___________

                        U.S. GOVERNMENT PUBLISHING OFFICE

    35-663 PDF                 WASHINGTON : 2019

                        COMMITTEE ON EDUCATION AND LABOR

                 ROBERT C. ``BOBBY'' SCOTT, Virginia, Chairman

    Susan A. Davis, California           Virginia Foxx, North Carolina,
    Raul M. Grijalva, Arizona            Ranking Member
    Joe Courtney, Connecticut            David P. Roe, Tennessee
    Marcia L. Fudge, Ohio                Glenn Thompson, Pennsylvania
    Gregorio Kilili Camacho Sablan,      Tim Walberg, Michigan
      Northern Mariana Islands           Brett Guthrie, Kentucky
    Frederica S. Wilson, Florida         Bradley Byrne, Alabama
    Suzanne Bonamici, Oregon             Glenn Grothman, Wisconsin
    Mark Takano, California              Elise M. Stefanik, New York
    Alma S. Adams, North Carolina        Rick W. Allen, Georgia
    Mark DeSaulnier, California          Francis Rooney, Florida
    Donald Norcross, New Jersey          Lloyd Smucker, Pennsylvania
    Pramila Jayapal, Washington          Jim Banks, Indiana
    Joseph D. Morelle, New York          Mark Walker, North Carolina
    Susan Wild, Pennsylvania             James Comer, Kentucky
    Josh Harder, California              Ben Cline, Virginia
    Lucy McBath, Georgia                 Russ Fulcher, Idaho
    Kim Schrier, Washington              Van Taylor, Texas
    Lauren Underwood, Illinois           Steve Watkins, Kansas
    Jahana Hayes, Connecticut            Ron Wright, Texas
    Donna E. Shalala, Florida            Daniel Meuser, Pennsylvania
    Andy Levin, Michigan*                William R. Timmons, IV, South
    Ilhan Omar, Minnesota                    Carolina
    David J. Trone, Maryland             Dusty Johnson, South Dakota
    Haley M. Stevens, Michigan
    Susie Lee, Nevada
    Lori Trahan, Massachusetts
    Joaquin Castro, Texas
    * Vice-Chair

                       Veronique Pluviose, Staff Director
                     Brandon Renz, Minority Staff Director
                                     ------

                                C O N T E N T S

                                  ----------
                                                                       Page

    Hearing held on March 13, 2019...................................     1

    Statement of Members:
        Scott, Hon. Robert C. ``Bobby'', Chairman, Committee on
          Education and Labor........................................     1
            Prepared statement of....................................     4
        Foxx, Hon. Virginia, Ranking Member, Committee on Education
          and Labor..................................................     6
            Prepared statement of....................................     7

    Statement of Witnesses:
        Akers, Dr. Elizabeth, Ph.D., Senior Fellow, Manhattan
          Institute..................................................    36
            Prepared statement of....................................    38
        Kvaal, Mr. James, President, The Institute for College Access
          and Success................................................    41
            Prepared statement of....................................    43
        Parker, Ms. Jenae, Board Member, Student, Franklin University    29
            Prepared statement of....................................    31
        Morrison-Shetlar, Dr. Alison, Interim Chancellor, Western
          Carolina University........................................    20
            Prepared statement of....................................    22
        Webber, Dr. Douglas, Ph.D., Associate Professor and Director
          of Graduate Studies, Economics Department, Temple
          University.................................................     9
            Prepared statement of....................................    11

    Additional Submissions:
        Mrs. Foxx:
            Article: The Benefits of Starting College Early in High
              School.................................................   105
        Fudge, Hon. Marcia L., a Representative in Congress from the
          State of Ohio:
            Question for the record..................................   109
            Letter dated March 25, 2019 from the Council of Graduate
              Schools................................................   110
        Levin, Hon. Andy, a Representative in Congress from the State
          of Michigan:
            Letter dated March 8, 2019 from the Preserve the Public
              Service Loan Forgiveness...............................   114
            Letter dated March 13, 2019 from the American Federation
              of Teachers (AFT)......................................   119
        Shalala, Hon. Donna E., a Representative in Congress from the
          State of Florida:
            Letter dated March 13, 2019 from CLASP...................   121
        Schrier, Hon. Kim, a Representative in Congress from the
          State of Washington:
            Letter dated March 12, 2019 from the National Education
              Association (NEA)......................................   125
        Takano, Hon. Mark, a Representative in Congress from the
          State of California:
            Letter dated March 11, 2019 from the California Community
              Colleges...............................................   127
        Taylor, Hon. Van, a Representative in Congress from the State
          of Texas:
            Link.....................................................   129
        Questions submitted for the record by:
            Morelle, Hon. Joseph D., a Representative in Congress
              from the State of New York.............................   131
            Omar, Hon. Ilhan, a Representative in Congress from the
              State of Minnesota.....................................   131
            Sablan, Hon. Gregorio Kilili Camacho, a Representative in
              Congress from the Northern Mariana Islands.............   131
            Stevens, Hon. Haley M., a Representative in Congress from
              the State of Michigan..................................   131
            Mr. Taylor

        Responses to questions submitted for the record:
            Mr. Kvaai................................................   136
            Dr. Morrison-Shetlar.....................................   142
            Dr. Webber...............................................   143

                     THE COST OF COLLEGE: STUDENT CENTERED
                       REFORMS TO BRING HIGHER EDUCATION
                                  WITHIN REACH

                                  ----------

                           Wednesday, March 13, 2019

                            House of Representatives

                       Committee on Education and Labor,

                                Washington, DC.

                                  ----------

        The committee met, pursuant to notice, at 10:16 a.m., in
    room 2175, Rayburn House Office Building. Hon. Robert C.
    ``Bobby'' Scott (chairman of the committee) presiding.
        Present: Representatives Scott, Davis, Courtney, Fudge,
    Sablan, Wilson, Bonamici, Takano, Adams, DeSaulnier, Norcross,
    Jayapal, Morelle, Wild, Harder, McBath, Schrier, Underwood,
    Hayes, Shalala, Levin, Omar, Trone, Stevens, Lee, Trahan,
    Castro, Foxx, Roe, Walberg, Guthrie, Grothman, Stefanik, Allen,
    Smucker, Banks, Walker, Comer, Cline, Fulcher, Taylor, Watkins,
    Wright, Meuser, Timmons, and Johnson.
        Staff present: Tylease Alli, Chief Clerk; Nekea Brown,
    Deputy Clerk; Ilana Brunner, General Counsel Health and Labor;
    Jacque Chevalier Mosely, Director of Education Policy; Sheila
    Havenner, Director of Information Technology; Elizabeth Hollis,
    Director of Finance and Personnel; Ariel Jona, Staff Assistant;
    Stephanie Lalle, Deputy Communications Director; Andre Lindsay,
    Staff Assistant; Max Moore, Office Aide; Merrick Nelson,
    Digital Manager; Veronique Pluviose, Staff Director; Katherine
    Valle, Senior Education Policy Advisor; Banyon Vassar, Deputy
    Director of Information Technology; Claire Viall, Professional
    Staff; Joshua Weisz, Communications Director; Cyrus Artz,
    Minority Parliamentarian, Marty Boughton, Minority Press
    Secretary; Courtney Butcher, Minority Coalitions and Members
    Services Coordinator; Bridget Handy, Minority Legislative
    Assistant; Blake Johnson, Minority Staff Assistant; Amy Raaf
    Jones, Minority Director of Education and Human Resources
    Policy; Hannah Matesic, Minority Director of Operations; Kelley
    McNabb, Minority Communications Director; Brandon Renz,
    Minority Staff Director; Alex Ricci, Minority Professional
    Staff Member; Mandy Schaumburg, Minority Chief Counsel and
    Deputy Director of Education Policy; and Meredith Schellin,
    Minority Deputy Press Secretary and Digital Advisor.

        Chairman SCOTT. The Committee on Education and Labor will
    come to order. I want to welcome everyone, and note for the
    record that a quorum is present. The committee is meeting
    together in a legislative hearing to hear testimony on the cost
    of college, student-centered reforms to bring higher education
    within reach. Pursuant to committee rule 7C, opening statements
    are limited to the chair and ranking member. This allows us to
    hear from witnesses sooner and provides all members with
    adequate time to ask questions. I now recognize myself for the
    purposes of making an opening statement.
        This morning marks the first of five bipartisan hearings
    which will inform our work on comprehensive reauthorization of
    the Higher Education Act. I want to thank the ranking member
    and her staff for working cooperatively with us to arrange all
    five of the hearings. I also want to thank our witnesses for
    being with us today to answer questions and provide their
    valuable expertise.
        Our timing could not be better. Yesterday's news was a
    powerful reminder that elements of our higher education system
    are in desperate need of repair. The alleged use of bribery and
    fraud to game the college admissions system illustrates a
    reality that our higher education--reality in our higher
    education system, that is students from wealthy families and
    students from--poor families are not treated fairly. It is
    important to note that all of the indicted people in this
    scheme are entitled to a presumption of innocence, but at least
    one has pleaded guilty. So, we know that the scheme was going
    on. The reality of this is maddening and inflammatory. It is
    illegal and systemic--is the illegal and systemic inequality of
    its college admissions. It, ultimately, deprived countless
    students of their chance to reach their full potential.
        Our education must be an engine of economic mobility for
    all students, not an instrument for preserving the elite status
    of wealthy families. In rewriting the Higher Education Act, we
    have an opportunity to address many factors that prevent
    students, particularly students of color and low-income
    families, from attending institutions of higher education, and
    those same factors often perpetuate racial and income
    inequality.
        This committee has a difficult challenge. The competing
    proposals released in the last Congress, the Republican PROSPER
    Act and the Democratic Aim Higher Act, illustrated the vast
    differences in our approach to higher education. This hearing
    will begin the process of finding areas of common ground. The
    goal of our work in this committee on the higher education is
    not just to write a new higher education bill, but it is to
    pass a comprehensive higher education bill. Accordingly, we
    propose to work together in a bipartisan way that produces a
    bill that can pass the House, pass the Senate, and be signed by
    the President. Students, families, taxpayers, and institutions
    of higher education deserve a good faith effort on our behalf
    to address the urgent challenges facing the higher education
    system.
        Today, we are discussing one of the biggest challenges, the
    rising cost of college. The cost of attending public colleges
    has risen dramatically in recent years. While--from 1990 to
    2015, the median household income increased by 12 percent, but
    the net cost of attending college increased by 81 percent.
        When President Johnson signed the Higher Education Act, he
    said, that a high school student 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 the family is poor.
    That could have been the case in the 1960's and 1970's, but it
    is not the case today. In 1980, the maximum Pell Grant covered
    76 percent of the cost of attending a 4-year public college.
    Today, the maximum Pell Grant covers only 29 percent of that
    cost.
        There are many factors that have led to the rising costs of
    college, but none more significant than the decline of State
    investment in higher education.--You have a chart on higher
    education? This shows the change in investment from States. Red
    is how much less they are paying, and the blue is how much more
    they are paying. We can see that a decade ago, States paid, on
    average, about two-thirds of the cost of higher education.
    Today, States pay, on average, less than one-third of the cost.
    Going from two-thirds to one-third doubles the cost of
    education to the students, and it is only going to get worse.
    Adjusted for inflation, 45 States spent less per student in
    2018 than they did 10 years before, in 2008.
        As tuition continues to outpace both wages and Pell Grants,
    it should not be a surprise that students and their families
    are asking themselves if college is even worth the cost. The
    evidence and research demonstrate that given well-supported and
    responsive--responsible institutions of higher education, the
    answer is, overwhelmingly, yes. Yes, it is worth the cost. A
    college degree remains a good investment for students and
    families, as well as local communities and the national
    economy. Individuals with a bachelor's degree, typically, earn
    about a million dollars more than a high school graduate, over
    their lifetime. Individuals with an associate's degree earn
    about $400,000 more than a high school graduate over their
    lives.
        Two out of three jobs within the modern economy are filled
    by individuals who have more than a high school education, and
    we see in this chart those that--after the recession, you see,
    those with a college degree recovered. Those with just a high
    school diploma, on the bottom, did not do well. Those in the
    middle got kind of in between, but, you can see, those with
    college educations did much better during the recovery.
        A college-educated work force is also good for local
    economies. Evidence shows that for every dollar a State invests
    in higher education, it receives about $4.50 in return in
    higher tax revenue and lower spending on public assistance.
        Colleges also contribute to the cultural and financial
    strength of communities that are across the country. We know
    that universities represent the largest employers in 10
    different States around the country, and in rural areas they
    are, invariably, the largest employer in the county.
        We also know that economic competitiveness is, to a large
    extent, based on the availability of well-trained, well-
    educated work force. Even though college enrollment and
    completion is a matter of economic competitiveness, only 48
    percent of Americans 25 to 34 have obtained some sort of
    postsecondary credential. In Canada and Japan, it is 60 percent
    have obtained some kind of postsecondary education; in Korea,
    70 percent.
        If we do not address the rising costs, we will not only
    lose our economic competitiveness, but a growing number of
    students and families will lose out on the benefits of a
    college degree. This is particularly true for low-income
    students and students of color, who already face significant
    barriers to attending college. Today, we will consider a broad
    range of solutions to make college more accessible and
    affordable to individuals from all backgrounds, including
    halting increases in college costs by encouraging more State
    and local investment in public institutions; restoring the
    purchasing power of Pell; and expanding eligibility, including
    short-term, high-quality programs that provide both valuable
    technical skills and a path to 2-and 4-year college degrees, so
    that students will be able to afford college; and making
    college--student loans cheaper and easier to pay off, while
    providing additional support for low-income students, such as
    Federal Work-Study, which empowers students to earn while they
    are in college.
        The evidence of the benefits of college degrees are all
    around us. In the recently completed 115th Congress, we found
    that all 100 United States senators had college degrees, and
    more than 90--about 94 percent of the members of the House held
    at least a bachelor's degree. We, of all people, should not be
    discouraging students from seeking the kind of education that
    got us here today.
        If we only tinker around the edges and do not make
    comprehensive steps to addressing access and affordability, we
    will fail to serve the students, parents, and communities we
    were elected to serve. In sum, we will fail the Nation, and
    that simply should not be an option. So, I look forward to our
    discussion, and now recognize the ranking member, Dr. Foxx.
        [The statement by Chairman Scott follows:]

        Prepared Statement of Hon. Robert C. ``Bobby'' Scott, Chairman,
                        Committee on Education and Labor

        This morning marks the first of five bipartisan hearings, which
    will inform our work on comprehensive reauthorization of the Higher
    Education Act. I want to thank our witnesses for being here with us
    today to answer questions and provide their valuable expertise.
        Our timing could not be better. Yesterday's news was a powerful
    reminder that elements of our higher education system are in desperate
    need of repair. The alleged use of bribery and fraud to game the
    college admissions system illustrates a reality in our higher education
    system: Students from wealthy families and students from poor families
    are not treated fairly. It is important to note that all of the
    indicted people in this scheme are entitled to a presumption of
    innocence, but at least one has pleaded guilty, so we know the scheme
    was going on. The reality of this is maddening and inflammatory. It is
    the illegal and systemic inequality in college admissions and success
    that ultimately deprives countless students of the chance to reach
    their potential.
        Our education must be an engine of economic mobility for all
    students, not an instrument for preserving the elite status of wealthy
    families. In re-writing the Higher Education Act, we have an
    opportunity to address many factors that prevent students--particularly
    students of color and low-income families--from attending institutions
    of higher education and those same factors have too often perpetuated
    racial and income inequality.
        This Committee has a difficult challenge. The competing proposals
    released in the last Congress--the Republican PROSPER Act and the
    Democratic Aim Higher Act--illustrated the vast differences in our
    approach to higher education. This hearing will begin the process of
    finding areas of common ground. The goal of our work in this Committee
    in higher education is not just to write a new higher education bill,
    it is to pass a comprehensive higher education bill. Accordingly, we
    propose to work together in a bipartisan way that produces a bill that
    can pass the House, pass the Senate, and be signed by the President.
    Students, families, taxpayers, and institutions of higher education
    deserve a good-faith effort to address the urgent challenges facing the
    higher education system.
        Today, we are discussing one of the biggest challenges: The rising
    cost of college. The cost of attending public colleges has risen
    dramatically in recent years. From 1990 to 2015, the median household
    income increased by 12 percent, but the net cost of attending college
    increased by 81 percent.
        When President Johnson signed the Higher Education Act, he said,
    ``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 [their] family is poor.'' That could've been the
    case in the 1960's and 70's, but it is not the case today. In 1980, the
    maximum Pell Grant covered 76 percent of the cost of attendance at
    public 4-year colleges. Today, the maximum Pell Grant, which is the
    cornerstone of Federal student aid for nearly 7.5 million low-income
    students each year, covers just over 29 percent.
        There are many factors that have led to the rising cost of college,
    but none are more significant that the decline of State investment in
    higher education. A decade ago, States paid about two-thirds of the
    cost of higher education.
        Today, States pay, on average, less than one-third of the cost.
    Going from 2/3 to 1/3 doubles the cost of college to students and it's
    only going to get worse--45 States spent less per student in the 2018
    school year than in 2008.
        As tuition continues to outpace both wages and Pell Grants, it
    should not be a surprise that students and families are asking
    themselves if college is still worth the cost. The evidence and
    research demonstrate that, given well-supported and responsible
    institutions of higher education, the answer is an overwhelming yes. A
    college degree remains a good investment for students and families, as
    well as local communities and the national economy. Individuals with a
    bachelor's degrees typically earn about $1 million more than high
    school graduates over their lives. Individuals with an associate's
    degrees earn $400,000 more than high school graduates over their lives.
    And two out of three jobs in the modern economy are filled by
    individuals who have more than a high school education.
        A college-educated work force is also good for local economies.
    Evidence shows that for every $1 a State invests in higher education,
    it receives up to $4.50 in return in higher tax revenue and lowers
    spending on public assistance.
        Colleges also contribute to the cultural and financial strength of
    communities across the country. We know that universities represent the
    largest employers in 10 different States around the country and, in
    rural areas, they are invariably the largest employer.
        We also know that economic competitiveness is, to a large extent,
    based on the availability of a well-trained and well-educated work
    force. Even though college enrollment and completion are a matter of
    economic competitiveness, only 48 percent of Americans ages 25 to 34
    have obtained some sort of postsecondary credential. In Canada and
    Japan, 60 percent of young adults have obtained postsecondary
    education. In Korea, that figure reaches 70 percent.
        If we do not address the rising costs, not only will we lose our
    economic competitiveness, but a growing number of students and families
    will lose out on the benefits of college degree. This is particularly
    true for low-income students and students of color, who already face
    significant barriers to earning a college degree. Today, we will
    consider a broad range of solutions to make college more accessible and
    affordable to individuals from all backgrounds, including:
        * Halting increases in college costs by encouraging more State and
    local investment in public institutions.
        * Restoring the purchasing power of Pell Grants and expanding
    eligibility, including to short-term high-quality programs that provide
    both valuable technical skills and a path to a two-and 4-year degree,
    so that students will be able to afford college.
        * Making college loans both cheaper and easier to pay off, while
    providing additional support for low-income students such as Federal
    Work-Study, which empowers students to earn while in college.
        The evidence of the benefits of a college degree are all around us.
    In the recently completed 115th Congress, all Senators and more than
    nine in 10 members of the House of Representatives held at least
    bachelor's degrees. We, of all people, should not be discouraging
    students from seeking the education that got us here today.
        If we only tinker around the edges and do not take comprehensive
    steps to address access and affordability, we will fail to serve the
    students, parents, and communities who elected to serve. In sum, we
    will fail the nation--and that is simply not an option.
        I look forward to our discussion and I now recognize the Ranking
    Member, Dr. Foxx.
                                     ______

        Mrs. FOXX. Thank you, Mr. Chairman, and I thank you for
    your commitment to our working on this issue in a bipartisan
    fashion. This hearing cuts to the heart of why postsecondary
    education reform is necessary, and why it is so difficult to
    accomplish.
        It is necessary because college is so increasingly
    expensive.
        For decades, tuition and fees have risen higher than the
    cost of inflation. Because costs have always varied between
    different types of institutions, it is often hard to know what
    option would provide the best value for the unique needs of
    each student and their families. Here is a way to put the cost
    of college into perspective. If the price of cars had risen at
    the same rates tuition and fees have risen, the average car
    today would cost more than $80,000.
        The high cost of college is not a question for debate. It
    is a matter of fact. It is also why change is so difficult.
    High costs for all mean very, very high payouts for some. As a
    former college administrator, I know firsthand the complexity
    and the ripple effects of budget decisions at the institutional
    level. Sometimes it takes creativity and resourcefulness to
    manage an institution's finances well. Sometimes the easiest
    way to grow your budget is to use an old business mindset and
    simply pass cost to the consumer. In this case, the consumers
    are students and families, and they are not willing to take the
    high cost anymore. There are ways to protect students from
    absorbing the cost of institution level budget decisions, and I
    must say I do not believe every college administrator in the
    country is giving students the consideration they deserve when
    deciding how to manage institutional finances.
        Any discussion of college affordability must involve
    serious questions about institutional accountability. I hope we
    will hear more about that today, and I hope we will all have
    the courage to confront those who seek to maintain the status
    quo at the expense of students for their own benefit.
        The Federal Government's role in trying to help families
    pay for college is a classic example of the unintended
    consequences of good intentions. On top of the different types
    of grants available, the Federal Government deals in 5 loan
    programs, 9 repayment plans, 8 forgiveness programs, and 32
    deferment and forbearance options. Somehow, all these numbers
    and options have added up to more than $1.5 trillion dollars in
    student debt and counting, a number no Congress could have
    anticipated as each of these Federal aid options came online.
        These facts should be further indication that college costs
    are not simply a matter of supply and demand or loan amounts or
    interest rates, but a symptom of deeper systemic flaws in
    American postsecondary education systems and, perhaps more
    importantly, popular perceptions and values. I have long said
    we need bold reforms in postsecondary education, if we are
    going to make the system work for students again, and I have
    put those ideas forward. I believe in the necessity of
    comprehensive reform today more than ever. However, I am happy
    to acknowledge that there are few bright stars in the system as
    we know it. The comparative success of the Pell Grant program
    has made it the cornerstone of Federal student aid.
        In today's economy, there are ways to strengthen the Pell
    Grant program in ways that may not have been evident in
    previous decades, and that comes back to my point about public
    perceptions. If we consider ways to make Pell Grants applicable
    to shorter term, skills-focused programs that meet the needs of
    students and the communities in which they live, I believe we
    will see a higher, faster, and more satisfying return.
        All education is career education. American students view
    postsecondary education as a necessity, and they are not wrong
    in thinking that way. As we broaden our ideas of what
    postsecondary options can look like for students of every age,
    the question of how they will pay for it looms large. I am glad
    to see increasing public interest in this issue, and I welcome
    this hearing and these witnesses today. I yield back, Mr.
    Chairman.
        [The statement by Mrs. Foxx follows:]

    Prepared Statement of Hon. Virginia Foxx, Ranking Member, Committee on
                              Education and Labor

        This hearing cuts to the heart of why postsecondary education
    reform is necessary and why it is so difficult to accomplish. It's
    necessary because college is so increasingly expensive. For decades,
    tuition and fees have risen higher than the cost of inflation. Because
    costs have always varied between different types of institutions, it's
    often hard to know what option would provide the best value for the
    unique needs of each student and their families.
        Here is a way to put the cost of college into perspective: if the
    price of cars had risen at the same rates tuition and fees have risen,
    the average car today would cost more than $80,000. The high cost of
    college is not a question for debate, it is a matter of fact.
        That's also why change is so difficult. High costs for all mean
    very, very high payouts for some. As a former college administrator, I
    know firsthand the complexity and the ripple-effects of budget
    decisions at the institutional level. Sometimes, it takes creativity
    and resourcefulness to manage an institution's finances well.
    Sometimes, the easiest way to grow your budget is to use an old
    business mindset and pass costs along to the consumer. In this case,
    the consumers are students and families, and they are not willing to
    take the high costs anymore.
        There are ways to protect students from absorbing the costs of
    institution-level budget decisions, and I must say, I don't believe
    every college administrator in the country is giving students the
    consideration they deserve when deciding how to manage institutional
    finances. Any discussion of college affordability must involve serious
    questions about institutional accountability. I hope we'll hear more
    about that today, and I hope we'll all have the courage to confront
    those who seek to maintain the status quo, at the expense of students,
    for their own benefit.
        The Federal Government's role in trying to help families pay for
    college is a classic example of the unintended consequences of good
    intentions. On top of the different types of grants available, the
    Federal Government deals in five loan programs, nine repayment plans,
    eight forgiveness programs, and 32 deferment and forbearance options.
    Somehow, all these numbers and options have added up to more than $1.5
    trillion in student debt and counting--a number no Congress could have
    anticipated as each of these Federal aid options came online.
        These facts should be further indication that college costs are not
    simply a matter of supply and demand or loan amounts or interest rates,
    but a symptom of deeper systemic flaws in American postsecondary
    education systems and, perhaps more importantly, popular perceptions.
        I have long said that we need bold reforms in postsecondary
    education if we're going to make the system work for students again,
    and I've put those ideas forward. I believe in the necessity of
    comprehensive reform today more than ever. However, I'm happy to
    acknowledge that there are a few bright stars in the system as we know
    it. The comparative success of the Pell Grant program has made it the
    cornerstone of Federal student aid. In today's economy, there are ways
    to strengthen the Pell Grant program in ways that may not have been
    evident in previous decades, and that comes back to my point about
    public perceptions. If we consider ways to make Pell Grants applicable
    to shorter-term, skills-focused programs that meet the needs of
    students and the communities in which they live, I believe we'll see a
    higher, faster, and more satisfying return.
        All education is career education. American students view
    postsecondary education as a necessity, and they aren't wrong in
    thinking that way. As we broaden our ideas of what postsecondary
    options can look like for students of every age, the question of how
    they'll pay for it looms large. I am glad to see increasing public
    interest in this issue, and I welcome this hearing and these witnesses
    today.
                                     ______

        Chairman SCOTT. Thank you. Without objection, all other
    members who wish to insert written statements to the record may
    do so by submitting them to the committee clerk electronically
    by Tuesday, March 26th.
        I will now introduce our witnesses. Dr. Douglas Webber is
    associate professor of economics and the director of graduate
    studies at Temple University. He holds a Ph.D. and master's in
    economics from Cornell and undergraduate degrees in math and
    economics from the University of Florida. He has published on
    many topics in the field of labor economics, and current
    research focuses most heavily on higher education finance and
    the returns in and to investments in--return to an investment
    by going to college.
        Dr. Alison Morrison-Shetlar is the interim chancellor at
    Western Carolina University, where she serves as chief
    executive officer for the university, and oversees all major
    divisions of the university, including academic affairs,
    administration and finance, student affairs, and legal affairs.
    She has nearly 35 years of experience working in higher
    education in eight institutions in three countries, and in both
    public and private universities.
        Jenae Parker is the first in her family to graduate from
    college, obtained an associate in plant science, in human
    resources management, from Columbus State Community College, in
    December. She is now enrolled at Franklin University, a 4-year
    institution, where she plans to obtain her bachelor's degree in
    human resources management by the Fall of 2020. She is a
    student parent, and her 8-year-old daughter joins us in the
    front row today.
        Dr. Beth Akers is a senior fellow at Manhattan Institute.
    Prior to her role in Manhattan Institute, she was a fellow at
    the--Brookings' Institution's Center on Children and Families.
    Then a staff economist on President Bush's Council on Economic
    Advisors, where she worked on Federal student lending policy,
    as well as other education and labor issues. She received a
    B.S. in mathematics and economics from SUNY in Albany and a
    Ph.D. in economics from Columbia.
        James Kvaal is president of the Institute for College and
    College Access and Success, a nonprofit organization that works
    on the issues of affordability, accountability, and equity in
    education. He previously served as the deputy director of the
    White House Domestic Policy Council and has senior roles in the
    U.S. Department of Education, U.S. House of Representatives,
    and the U.S. Senate. He taught at University of Michigan's Ford
    School of Public Policy and attended Stanford University and
    Harvard Law School.
        We appreciate all the witnesses for being here today, and
    we look forward to your testimony. Let me remind the witnesses
    that we have your written statements, and they will appear in
    full in the hearing record pursuant to committee rule 7D and
    committee practice. Each of you is asked to limit your oral
    presentation to a 5-minute summary of your written statement.
        Let me remind the witnesses that Title 18, the U.S. Code
    Section 1001, makes it illegal to knowingly and willfully
    present false information to Congress, but before you begin
    your testimony, please remember to press the button on the
    microphone in front of you, so that you will be able to turn
    the microphone on, so that the members can hear you. As you
    begin to speak, the light in front of you will turn green.
    After 4 minutes, the light will turn yellow to signal that you
    have 1 minute remaining. When the light turns red, we would
    appreciate it if you could summarize your testimony and wrap
    up.
        We will let the entire panel make presentations before we
    move to member questions. When answering a question, please
    remember, again, to turn your microphone on.
        We will first recognize Dr. Webber.

     STATEMENT OF DOUGLAS WEBBER, ASSOCIATE PROFESSOR AND DIRECTOR
      OF GRADUATE STUDIES, ECONOMICS DEPARTMENT, TEMPLE UNIVERSITY

        Mr. WEBBER. Chairman Scott, Ranking Member Foxx, and
    distinguished members of the committee, I sincerely thank you
    for the opportunity to testify today, and for your interest and
    devotion to college affordability. My name is Doug Webber and I
    am an associate professor of economics at Temple University,
    where I have focused on higher education finance and the
    returns to college investment.
        Affordability is about access, the value of a degree, and
    the risk associated with the investment. I say with great
    confidence that college is a risk worth taking for the vast
    majority of individuals and is worth the considerable public
    investment that we make in trying to ensure that a quality
    education is affordable for anyone who wants it.
        But the price of college has outpaced inflation over the
    past several decades, making college less affordable. The high
    prices and prospect of significant debt deter low-income
    students, including highly qualified, low-income, high school
    students from even--from ever enrolling. Higher debt loads and
    the fact that we have a complicated repayment system that does
    nothing to automatically place distressed borrowers into
    income-driven repayment plans have increased students' risks,
    particularly for students who do not complete a degree.
        The factors driving the increasing price of college are
    complex and vary greatly across sector. My research has found
    that at public institutions, State divestment is responsible
    for roughly 30 percent of tuition increases since the year
    2000, and 41 percent of increases since the Great Recession
    began in 2007. Possibly the biggest single driver is known as
    Baumol's cost disease. The returns to very high levels of
    education, such as a Ph.D., in the private sector have
    increased dramatically over time. For example, in my field of
    economics, the combination of modern computing technology and
    econometric scales taught in most Ph.D. programs have caused
    private sector salaries for economics Ph.D.'s to rise
    substantially. This increased competition from the private
    sector pushes up the salary that a university must offer to
    hire an economist. The difficulty here is that rising
    instructional costs are driven by market forces completely
    outside the control of universities.
        The problem is that as tuition has increased, low-income
    individuals have found themselves with little money to pay for
    college. For starters, the purchasing power of Pell Grants has
    declined considerably over time. The maximum available Pell
    Grant of $6,095 covers only 30 to 40 percent of the annual cost
    of attendance at the average 4-year public school. This is down
    from 80 percent in the 1970's. The decline in purchasing power
    is largely due to nontuition expenses, such as housing, food,
    and other school supplies. At the typical public institution,
    tuition comprises only a quarter of the full cost of
    attendance. As college prices have increased and the purchasing
    power of Pell Grants has decreased, more students are working
    during school. Seventy percent of college students work. Over
    half of those work more than 20 hours per week. This is
    problematic, as needing to work this much has been shown to
    lengthen the time it takes to get a degree and also reduces the
    likelihood of graduating.
        More students are taking out loans. Today, 69 percent of
    students borrow to pay for college, with the average 4-year
    college graduate owing roughly $30,000 in Federal and non-
    Federal debt when they leave school. Although our system of
    need-based aid and loans is often needlessly complicated, it
    does help students enroll and graduate.
        To conclude, the picture of affordability is very complex.
    The financial value of a college degree has never been higher,
    but the downside risk has also increased over time,
    particularly for those who do not graduate, and, unfortunately,
    wealth and family background play an important role in college
    success. In one striking statistic, a high-achieving student
    from a low-income family is less likely to graduate from
    college than a low-achieving student from a high-income family.
        For more on how the wealth gap impacts student outcomes,
    especially along the dimension of race, see the excellent
    research of a colleague of mine from graduate school, Dr.
    Fenaba Adbo of the University of Wisconsin-Madison, and Dr.
    Jason Houle of Dartmouth University. I think there are many
    areas of bipartisan agreement that will lead to a better future
    for the students of this country, particularly as it relates to
    accountability, which is somewhat--something that I have done a
    lot of work on.
        Thank you all for this opportunity to come before you
    today. I am eager to help in any way that I can, both today and
    in the coming weeks and months. Thank you very much.
        [The statement of Dr. Webber follows:]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman SCOTT. Thank you. Ms. Morrison-Shetlar?

       STATEMENT OF ALISON MORRISON-SHETLAR, INTERIM CHANCELLOR,
                      WESTERN CAROLINA UNIVERSITY

        Ms. MORRISON-SHETLAR. Good morning. My name is Dr. Alison
    Morrison-Shetlar, and I am the interim chancellor of Western
    Carolina University, the westernmost institution of the
    globally recognized University of North Carolina system. Our
    mission is to serve our region and our community. Our student
    body reflects that. Approximately 43 percent of the Western
    Carolina students are Pell Grant recipients, and 40 percent are
    first generation college students.
        Western Carolina University has enjoyed great success over
    the last 7 years. Enrollment has soared to more than 11,600
    students. Freshman retention has increased from 71 percent to
    80 percent, and our 6-year graduation rate has risen from 50 to
    60 percent.
        As a regional comprehensive university, we know the lion's
    share of the work needed to lift families out of poverty
    happens at universities like ours. We take that responsibility
    very seriously. This past fall, Western Carolina implemented a
    bold and innovative program, created by a forward-thinking
    North Carolina legislator, to strengthen our crucial role as an
    engine of economic mobility, to make college more affordable
    for every student, and to provide access to truly affordable
    higher education that leads to timely graduation and a
    transformed future for our students.
        North Carolina has a long and proud history of generous
    support for its public universities, and ranks fifth nationally
    in both per pupil and per capita spending toward higher
    education.
        Our State recognizes that our universities drive economic
    development, create jobs, and unlock opportunities for our
    students and communities, large and small. With this in mind,
    North Carolina General Assembly has taken important steps to
    invest in, rather than divest from, public higher education. In
    2016, the General Assembly implemented a fixed tuition program
    across the system that guarantees a student's tuition will not
    change for eight consecutive semesters. The following year, a
    cap on student fees limited increases to no more than 3 percent
    per year, helping keep inflationary costs at a reasonable
    level. 2016 also saw the creation of NC Promise, one of the
    country's boldest moves in providing a radically affordable
    college education.
        NC Promise sets tuition at $500 per semester for in-State
    students and $2,500 per semester for out-of-State students at
    three UNC system institutions: Elizabeth City State University,
    the University of North Carolina at Pembroke, and Western
    Carolina University. The State pays the difference between what
    it used to cost before NC Promise to the tune of $51 million
    this first year alone. For context, that is around one and a
    half times Tennessee's investment in their innovative free
    community college program, Tennessee Promise.
        The goals for NC Promise are clear: increase access to
    higher education, improve affordability, reduce student debt,
    and continue to grow North Carolina's economy. I hear from my
    students every day that this program is a game changer. It is
    opening doors. It is changing the trajectory of their lives. It
    is setting them up for success beyond their expectations, and
    NC Promise's impact on decreasing student debt is significant.
        NC Promise is unique compared to most access programs
    nationally because it is a first-dollar scholarship. That means
    the tuition price comes down before any other financial aid is
    awarded. Under NC Promise, Pell Grants, State scholarships, and
    institutional aid go a lot further. For example, at Western,
    the program allows an in-State student who graduates in 4 years
    to save approximately $12,000. That is nearly equivalent to the
    total cost of attendance for one full academic year.
        So, is NC Promise working? Unequivocally, the answer is
    yes. At Western Carolina University, in fall 2018, total
    undergraduate enrollment grew by 6.6 percent. At UNC Pembroke
    and Elizabeth City, the two other--UNC Promise institutions,
    enrollments grew by 14 percent and 19 percent, respectively. At
    Western Carolina University, the number of first-time, full-
    time freshman increased by 10.5 percent, and transfer of
    students by 40.5 percent.
        In a survey of our fall 2018 entering class, almost a third
    of our new students with significant financial needs said that
    if it had not been for NC Promise, they would not have been
    able to attend any college or university. These numbers are
    hard to ignore. All three NC Promise institutions are located
    in historically underserved parts of North Carolina. Pembroke
    and Elizabeth City are both historically minority-serving
    institutions. This program is a target intervention that lifts
    up the communities and families who need it the most.
        There should also be no question that an educated
    leadership ready for work force is absolutely essential for
    economic development. We know that an affordable college degree
    can transform a student's future. North Carolina's overall
    investment in higher education and the groundbreaking NC
    Promise program is a resounding win for all: students win;
    their families win; the businesses that call our State home
    win, and we are a step closer to creating a thriving economy
    and a better life for all of our citizens.
        Thank you very much for the opportunity to speak with you
    today.
        [The statement of Dr. Morrison-Shetlar follows:]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman SCOTT. Thank you. Ms. Parker?

        STATEMENT OF JENAE PARKER, STUDENT, FRANKLIN UNIVERSITY

        Ms. PARKER. Chairman Scott, Ranking Member Foxx, and the
    members of the committee, thank you for the opportunity to
    testify. The price of college is a subject I know a lot about,
    and so does my 8-year-old daughter, Journey Marie. On TV,
    college looks like a lot of fun. Students live in dorms, eat
    pizza on campus, relax at the gym between classes. It is really
    seems like a mini vacation, but that image is nothing like what
    I have experienced in real life. I suspect the reality is far
    more common than the media stories. It needs to be a greater
    part of the conversation about the real college experience that
    Americans are having.
        I am 29. I am a parent, like nearly one in four college
    students. I am also a single parent, like 14 percent of
    students. Eleven years ago, I graduated from high school and
    went to the University of Toledo. Money was so tight that I did
    not have a comforter when I arrived on campus. The university
    cost over $25,000 per year, and all I got was a Pell Grant of
    $4,300. I borrowed $20,000 in Federal and in private loans, and
    worked at Starbucks, a grill, and also Target. It was
    exhausting. I could not focus on school and, 2 years later, I
    dropped out.
        Time passed. I got married. I had Journey, and I also got
    divorced. In 2013, I was working full-time and decided to try
    college again, this time at Columbus State Community College. I
    juggled full-time work and full-time college while raising my
    daughter and caring for my mother, who had fallen ill.
        I loved school, but when my mom passed away, I had to also
    care for my two teenage brothers. Again, it seemed college was
    not in the cards for me.
        The third time, I enrolled in college part-time, and worked
    several part-time jobs. It was slow, but it was the only way I
    could afford school. Many people think community college is
    already free, but Journey and I know that is not true.
        Our bills got so tight we ran out of money for food, and
    this was not about ramen. We lacked enough money to eat
    regularly. Then we were evicted. I thought this was my fault,
    but then I realized that 50 percent of college students are
    also dealing with food and housing insecurity. More than one in
    10 are homeless. Are we all just not college material or have
    we all done something wrong?
        Eventually, I found a college staff member who referred me
    to childcare, health insurance, food stamps, a scholarship, and
    housing in Scholar House, and I succeeded. In December 2018, I
    earned my associate's and transferred to Franklin University,
    where I am now pursuing a bachelor's in human resource
    management, and I also plan on a graduate degree in psychology.
        It seems that for Pell recipients like me, the only way to
    attend college and eat is to use food stamps, but what happens
    to the millions of students who cannot get that help? The U.S.
    Government Accountability Office recently said that 2 million
    students are having trouble paying for college, but not getting
    help from SNAP. Like me, most are first-generation students.
    Many are also single parents.
        For me to go to college and to focus, I have to know that
    my child is safe, but 95 percent of campuses with childcare
    have long waiting lists, and some campuses do not have
    childcare at all. I am here today because of my daughter. I am
    also here for students like me around the country and students
    like those that Journey will become. I know the odds are low
    that Journey and I will ever escape poverty, but I also know
    that college education--a college education helps, and we will.
    I am clearly willing to work for this bachelor's degree, but on
    days when money is tight and the bills are due, I wonder why I
    am paying for the price for a badly broken system. What would
    happen if Congress instead built a college financing system
    that matched the strength and ambition of today's students,
    like myself? I hope my story makes clear how desperately we
    want to improve our lives, and how very real the struggle of
    paying for college has become.
        Thank you for your time.
        [The statement of Ms. Parker follows:]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman SCOTT. Thank you. Dr. Akers?

        STATEMENT OF ELIZABETH AKERS, SENIOR FELLOW, MANHATTAN
                               INSTITUTE

        Ms. AKERS. Good morning, Chairman Scott, Ranking Member
    Foxx, and members of the committee. My name is Beth Akers, and
    I am a senior fellow at the Manhattan Institute, where I
    conduct research on higher education in the United States with
    a focus on finance. I have now worked in this space for over a
    decade; first, in my position as staff economist for the
    Council of Economic Advisors and at the Brookings Institution,
    as a fellow in both governance and economic studies. Thank you
    for the opportunity to share my testimony here today.
        College is expensive and getting more so every year. This
    inflation, combined with the growing enrollment among less
    well-off students, is driving student borrowing to tick up year
    after year. The current outstanding balance of $1.5 trillion is
    the highest level in history, but it is important to remember
    that spending on higher education is, at least on average,
    worth it. The increase in earnings that comes from having a
    college degree tends to outweigh the upfront cost of
    enrollment. This makes debt a reasonable mechanism for helping
    students to pay for college. For those who do go on to see a
    positive return on their spending, the problem of affordability
    is an issue of liquidity or being able to borrow from their
    future earnings, and not an issue of price.
        This notion is borne out by the statistics. While the
    popular media has frequently told stories of borrowers
    struggling with repayment, like the dental student who managed
    to amass $1 million in student debt, the vast majority of
    borrowers have small balances, reasonable payments relative to
    their income, and are eligible to take advantage of safety nets
    that will reduce or stop payments in times of financial
    hardship. The reality is that few borrowers have astronomical
    balances. As of 2015, just 5 percent of borrowers had balances
    in excess of $100,000, and many of those borrowers had
    completed graduate or professional programs that would lead to
    high-paying careers. While it is the responsibility of the
    media to cover the dire circumstances of the few, I am afraid
    that this has distorted our collective impression of the
    magnitude of the college cost problem, but knowing they are in
    the minority will provide little comfort to borrowers who find
    themselves underwater on their educational spending, nor should
    the infrequency of this problem cause policymakers to turn a
    blind eye.
        Sadly, many students are spending on college, only to end
    up worse off financially than if they had not gone in the first
    place. College is risky, and it is this risk, not the price of
    college, that is untenable. The system of higher education
    finance that we have in place today is not fundamentally out of
    sync with the challenges we face, but a small number of
    important policy changes could bring it closer in line with our
    collective objectives.
        First, we need to shore up the safety net for borrowers,
    and redesign it so that it operates effectively and is fiscally
    sustainable. It should be simple in design and foolproof to
    utilize, such that all students, not just those who are
    intensely financially savvy, can factor its existence into
    their enrollment and spending decisions. To accomplish this, we
    need to replace the existing system of Federal lending with a
    single loan program that collects loan repayment through a plan
    that ties monthly payments to a borrower's income.
        There will always be a tension between providing a safety
    net and diminishing the incentive for people to be self-
    sufficient. Moral hazard is inevitable, but smart program
    design can ensure that safety nets are as efficient as possible
    and do not create incentives for perverse behavior, like those
    that exist in the current system.
        We also need to work to mitigate the financial risk of
    college enrollment by empowering consumers with better
    information. The introduction of the college scorecard during
    the Obama Administration was a tremendous step forward. We
    should continue these efforts by improving and expanding the
    information that is available to students as they shop for
    college. And before we consider increased spending on
    subsidies, we need to make our current spending work harder for
    students and taxpayers by moving dollars from hidden and
    inefficient channels, like tax benefits and interest rate
    subsidies, to places they will do the most good. I believe all
    Federal subsidies to higher education should be delivered
    through a single means-tested grant program that delivers the
    most aid to the least well-off students.
        With these primary changes in place, we should also look
    for ways to support new, low-cost business models that can put
    downward pressure on prices at all institutions. Innovation in
    higher education marketplace is currently limited by the
    constraints on access to Federal financial aid. It is
    challenging for innovative startups to compete with traditional
    institutions, where their students cannot access Federal grants
    or subsidized student loans. We should continue the work
    started with the EQUIP Program under the Experimental Sites
    Initiative to explore how best to extend Federal student aid
    dollars to new, low-cost providers.
        Lastly, I urge you to reject the growing demand to make
    college free. Universality would be justified if there were
    fundamental barriers to a functioning marketplace in higher
    education, but no market failure exists that is not rectifiable
    through subsidies, provision of credit, and appropriate
    regulation. Embracing universality and postsecondary education
    would come at a tremendous financial cost, but would also rob
    us of the byproducts of a competitive marketplace: innovation,
    quality, and adequacy of supply.
        Thank you for the opportunity to be here today. I look
    forward to answering all of your questions.
        [The statement of Dr. Akers follows:]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman SCOTT. Thank you. Is it Dr. Kvaal? Thank you.
        Mr. KVAAL. Yes.
        Chairman SCOTT. Dr. Kvaal.

    STATEMENT OF JAMES KVAAL, PRESIDENT, THE INSTITUTE FOR COLLEGE
                           ACCESS AND SUCCESS

        Mr. KVAAL. Yes, thank you. Chairman Scott, Ranking Member
    Foxx, and members of the committee, thank you for the great
    privilege of being here today. American colleges and
    universities are nearly unmatched in their potential to create
    opportunity and raise living standards, but over the last
    generation, we have had a sea change in how we pay for college.
    States have cut funding for public colleges and universities,
    and that drives up tuition for the three-quarters of students
    who attend public universities and community colleges.
        Higher costs mean many students do not enroll. There is a
    long line of research that suggests that each additional
    thousand dollars in costs reduce enrollments by 3 to 5
    percentage points. Other students work long hours or enroll
    part-time, often at the expense of academic success. Some go
    hungry or homeless. Only 58 percent of our students earn a
    degree within 6 years. The most common reason they give for
    dropping out is to earn more money. It is not surprising then
    that students with high earning parents are five times more
    likely to hold a college degree. Latino adults are only half as
    likely to hold a college degree as other Americans, and black
    adults only two-thirds as likely.
        Growing college costs have also created a concentrated
    crisis in student debt. While most students benefit from
    college and repay their loans, millions of students fall behind
    on their loans, default, or see their balances grow over time
    because their payments are smaller than accrued interest.
    Struggling borrowers tend to have smaller loans, often because
    they dropped out of college. Others successfully completed but
    attended low-quality programs. For example, one study found
    that certificate programs at for-profit colleges leave students
    worse off, on average, because their increased learnings are
    smaller than their student debts.
        Over 1 million students a year default on their loans,
    suffering punitive consequences that can drive them deeper into
    debt. The experience of black borrowers, in particular, is
    deeply disturbing. Seventy percent of black borrowers are
    projected to eventually default. These problems were a
    generation in the making and reversing them will not happen
    quickly. However, I offer three recommendations.
        First, Congress should set a goal of doubling the Pell
    Grant, which is the level needed to end disparities in college
    affordability. It may not be able to double the Pell Grant
    immediately, but it should at least increase Pell Grants faster
    than inflation every year. It should also make them a true
    entitlement to protect them from the economic cycle.
        Second, Congress should build a new relationship with
    States. Federal efforts to make college more affordable simply
    cannot succeed without robust State investments alongside them.
    A new partnership with States should prioritize low-income
    students, consider the full cost of college, not just tuition,
    and address inequities in how States fund the colleges,
    enrolling the most low-income students and students of color.
        Finally, Congress should make it easier to repay loans as a
    share of income. Students in income-driven repayment plans are
    less likely to fall behind on their loans. They actually pay
    back more as a result, and they are financially healthier
    overall. However, improvements in IDR are needed. The five
    existing programs should be combined into a single plan that
    sets payments for all borrowers at 10 percent of income, above
    a living allowance. It should be easier for students to enroll
    and to certify their incomes, and after 20 years of payments,
    any remaining balance should be forgiven.
        Some final observations. First, too many unnecessary
    defaults occur because of the low quality of the private
    companies that collect student loans for the Department of
    Education. I urge Congress to hold these companies to high
    standards.
        Second, the Public Service Loan Forgiveness Program
    encourages graduates to become teachers, nurses, service
    members, first responders, but the program is far too
    complicated and poorly run. In the first round of applications,
    99 percent of applicants were denied. We should retain this
    program, but we should simplify it.
        Finally, the issue of affordability is intertwined with the
    question of accountability for student outcomes. Some colleges
    routinely leave students with unaffordable loans. I urge the
    committee to carefully consider how accountability can improve
    the value that colleges offer students and taxpayers.
        After decades of shifting the cost to students, it is
    important to remember that we all have a stake in helping more
    Americans graduate. Investing in Pell Grants, partnering with
    States, and ensuring loans are affordable are a realistic path
    to help bring about the society we want.
        Thank you very much.
        [The statement of Mr. Kvaal follows:]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman SCOTT. Thank you, and I thank all our witnesses
    for their testimony. Now, we begin with our members'
    questionings. I will reserve my questions to the end and call
    on the chair of the Higher Education Subcommittee, Ms. Davis.
        Mrs. DAVIS. Thank you. Thank you, Mr. Chair. I appreciate
    it. Thank you all for being here, particularly our student, who
    is here to represent someone who is more close to this process
    than some of us are. And I want to also mention very briefly,
    because, you know, we can all imagine how many students and
    parents are anxiously awaiting those letters on admissions
    today, and how, in many ways powerless, they must be feeling
    when they know they have worked hard, played by the rules, and
    yet, we have this scandal that we are all going to be
    following, and it hurts many communities, even in San Diego. I
    know that the news is hitting hard.
        I wanted to go--first to Dr. Webber. And you were
    mentioning in your testimony how public institutions respond to
    State budget cuts by increasing their tuition and cutting
    spending. Can you just talk a little bit more how the cutting
    of spending actually can be far more detrimental to students in
    some cases than even the increase in tuition?
        Mr. WEBBER. Absolutely. Well, thank you for that question.
    And I also wanted to briefly mention that I am legally blind,
    so I sincerely apologize if I am not making eye contact with
    you at this moment.
        So, spending matters quite a bit for graduation, and there
    are many low, low resourced institutions that, you know, simply
    are not able to provide the services that, especially, you
    know, many at-risk students currently need for graduating. And,
    you know, as we have, you know, talked about already today, the
    students who are at the greatest risk in terms of student debt
    are the ones who do not get the degree. So, to the extent that
    spending cuts hurts the likelihood of graduation, that is,
    potentially, even more damaging than a rising upfront cost.
        Mrs. DAVIS. How do you think, and maybe others can answer
    this, too, that our public institutions have addressed this
    problem? What are they doing, specifically?
        Mr. WEBBER. So, I think there are many different ways that
    different States have, you know, tried to address this. So,
    there are a number of States that have implemented Promise
    programs, like--
        Mrs. DAVIS. Right. We did hear from--mm-hmm.
        Mr. WEBBER [continuing]. like North Carolina. I mean, my
    colleague to my left might be better equipped at addressing
    that than me.
        Ms. MORRISON-SHETLAR. I think the investment of the State
    has been unprecedented for North Carolina, and as a result,
    being able to ensure that the students receive the kind of
    support that they need to be successful is paramount. And so
    having the option to increase the number of students and,
    therefore, increase the need for these resources or increase
    the number of students and decrease these resources goes
    counterproductive to the success of the students.
        Mrs. DAVIS. Right, and I know that you addressed, briefly,
    and others, just how that matters to the outcomes because we
    have students who, unfortunately, are taking longer and, in
    some cases, that might be okay, but it also costs them a lot
    more to do that and it has a greater burden on the institution.
    How have the outcomes been represented in that way?
        Ms. MORRISON-SHETLAR. So, North Carolina's system has a
    series of metrics as part of their strategic plan, and we are
    held to those and we are accountable for those. And with North
    Carolina Promise, what we are finding, even in the first year,
    that we have had an increase in enrollment of low-income and
    rural students, and that metric is something, as I say, we are
    held accountable to. To be able to see that increase because of
    a reduction in the cost of attendance really means that we have
    to make sure that we have the resources available to make sure
    that they are successful in their time to graduation. So, we
    are also seeing retention as being a big component of this, and
    resources need to be put in place so that we can continue to
    retain our students, so that they are successful, graduate on
    time, and then leave to get good jobs, where they can then
    become good citizens of the community.
        Mrs. DAVIS. Mm-hmm. Dr. Kvaal, you were talking about
    accountability, as well. I think you have all kind of mentioned
    that in terms of the ability of students who actually attend
    some of the for-profit institutions to be able to graduate, and
    to be able to pay back loans because they are earning a
    reasonable amount of money that represents their effort. Could
    you speak about our military, and how, in fact, we know our
    veterans, our active duty personnel, and, certainly, their
    families are affected by this, that they have really been
    shortchanged on many levels and are really a target of some of
    these institutions? How is that affecting them?
        Mr. KVAAL. Well, we have seen some of the deceptive and
    high-pressure recruiting tactics at for-profit colleges, focus
    on service members and veterans, and there are, really, two
    reasons for that. One is GI Bill benefits and military
    education benefits can be quite generous. The second reason is
    for-profit colleges, by law, can only receive up to 90 percent
    of their revenue from Federal student aid, but that limitation
    does not apply to veterans or military benefits. So, for every
    veteran they enroll with GI Bill benefits, they can enroll an
    additional nine students with Federal student loans, and so
    that has led to some of the extreme pressure on military
    service members and veterans.
        Mrs. DAVIS. Thank you. I know, Mr. Chairman, that the time
    is up, and perhaps, at some point, we can talk about how the
    Federal Government can address that better. Thank you.
        Chairman SCOTT. Thank you. The ranking member will defer.
    Dr. Roe?
        Mr. ROE. Thank you, Mr. Chairman, and, first of all, Ms.
    Parker, you hang in there. You are going to make it. I am going
    to confess that if it were not for the small university, Austin
    Peay, in my hometown of Clarksville, Tennessee, I would not be
    sitting here today. I went to dinner the other night, on
    Eighth, not a very expensive place, and two of us, my wife and
    I, had dinner, no alcohol, and that cost more than a quarter of
    college. I was able to go to college. I stayed home. I worked
    the whole time I was in school and medical school to graduate
    in 7 years with both of those, with zero debt, with a father
    who was a factory worker and a mother who was a bank teller.
    So, college was very affordable then. You could actually work
    your way through school.
        The average medical student where I taught, at Quillen
    College of Medicine in Johnson City, graduates with $175,000 in
    debt. That is a huge debt. I think the question is: is college
    going to be relevant anymore? And I think it is a question to
    ask, I think, at Western Carolina. And, by the way, East
    Tennessee State beat you guys the other day, in basketball. I
    want to point that out, and I do want to offer my condolences
    to you for losing Coach Larry Hunter. I have booed him many
    times at basketball games, but a good, a great man.
        In Tennessee, we have decided that education had to be
    affordable for our citizens. So, we put the Tennessee Promise
    in and Tennessee Reconnect. You can now go to community college
    in our State for free, and I will just give you a couple little
    things. At our local TCAT, which is our technical school, at
    one of them, I just saw the other day, 77 percent finish on
    time, 97 percent are placed in a job, and 100 percent graduate
    with no debt. So, you can go out in our State, and then, if you
    go to--if you go from community college to a 4-year college,
    East Tennessee State University, Tennessee Tech, Austin Peay,
    wherever, you have the Hope Scholarship to help you. So, we
    have tried to make it affordable for our students in our State,
    and I think it is being successful. I really do, and we are
    paying for that with our Lottery Scholarship.
        Another confession, I have served on two foundation boards,
    been the president of one, and I think the college investment
    is the best investment I ever made, without a doubt. I have not
    heard any of you all talk about it. I know you know Dr. Zeppos
    at Vanderbilt University, who complains about the
    administrative cost, and at Vanderbilt it adds about $10,000 or
    $11,000. They spend $150 million a year complying with Federal
    mandates and check the box. I heard no one talk about that, or
    did not see it in your testimony, how much is added to FASFA
    with 100-plus questions, and on and on. Could we streamline
    that for you all and help with the cost a little bit because a
    lot of the reporting does not add any value to the students?
    Anyone can take that question.
        Ms. AKERS. That is something I can chime in on. So, I
    think, something to think about with the administrative costs,
    we often see people pointing their finger at this as,
    potentially, the driver of the rising costs that are getting
    passed onto students. I think we want to realize that if we
    were looking at an institution that was providing tremendous
    outcomes for students, and they happen to have the large
    expenditures on administration, we probably would not be
    questioning whether or not that is an appropriate place for the
    institution to be doing their spending. What happens inside the
    school is somewhat of a black box in terms of their finances. I
    think what we want to be concerned most with is the outcomes
    that they are producing.
        The thing that I want to ask is what is it about the demand
    side of the equation that is enabling these institutions to
    drive up their spending because of the increases in revenue
    that is coming from the increased sticker price and tuition
    that students are actually charged?
        Mr. ROE. All that Ms. Parker is worried about, it was like
    when I sent my children to college. All I was interested in,
    when I drew the bottom line, was how much of a check do I have
    to write you all, and that check keeps getting bigger and
    bigger, and I looked at the inflation rate. I thought we were
    bad in medicine. We were actually pretty good compared to
    colleges. Colleges increased their costs almost 8 percent per
    year for the last 40 years, annually. That is a huge increase,
    and it is putting college out of the reach of people like Ms.
    Parker. And I think colleges are going to have to rethink, with
    all of the technology that is on this PDA I have got in my hand
    right here, I can learn a lot at no cost.
        So, if you look at going to Georgetown, I just pulled it
    up, I do not want to pick on them, but at $75,000 a year, if
    you then go teach school at Johnson City, Tennessee, that is
    hardly a return on your investment. Then if you end up being an
    investment banker in New York, it probably is, but you may want
    to be a teacher. So, you are going to have to rethink where you
    go.
        And I think another thing that we are doing, that I think
    both sides of the aisle do, is to educate these young people
    when they come in, about you do not have to borrow the maximum
    amount of money. You can borrow this much to get along because
    you are going to have to pay for it, sooner or later.
        Mr. Chairman, my time has expired.
        Chairman SCOTT. Thank you. The gentleman from Connecticut?
        Mr. COURTNEY. Thank you, Mr. Chairman, and for holding this
    hearing early in the Congress. Hopefully, this is going to be
    the year that the 116th Congress reauthorizes the Higher Ed. It
    was 2008 was the last time, and we are way overdue for an issue
    that, again, every part of the country is looking for help and
    action.
        First of all, I just wanted to note for, you know, my
    friend from Tennessee cited the Vanderbilt report. Actually, if
    you sort of drill down a little bit, in terms of the numbers
    that they used, in terms of the $146 million, in terms of added
    costs, most of those regs that they identified were, actually
    had to do with the research component of universities and
    colleges, and, you know, for things on human subjects, which, I
    think, all of us would probably agree that is not a bad idea.
    So, you know, that number, which, again, there is a report, I
    do not dispute that, but the number is actually a little more
    complicated than, I think, some of the reporting on it.
        So, I checked this morning. The U.S. Treasury is selling
    10-year notes for 2.6 percent. I always sort of use it as a
    benchmark when we talk about the Stafford Student Loan Program
    because those are 10-year term notes that the government
    offers. Again, even today, we are still getting back around 4
    to 5 percent in terms of--from students. So that, that
    differential, that delta, between what the government is paying
    when it borrows versus what students are paying when they
    borrow from the same government, it is, again, just pure sort
    of windfall for the Federal Government. GAO reported that
    between the years of 2007 and 2012, the Federal Government had
    a windfall of about $66 billion in terms of that differential
    that is there.
        This morning, myself along with a lot of my colleagues on
    this committee are reintroducing the Bank on Students Emergency
    Loan Refinancing Bill. Senator Warren is introducing a
    companion bill in the Senate, which would allow people, both
    private and--both public and private student loans, to write
    down their interest rate to 3.7 percent, which was the rate
    back in 2016. We know from last year's analysis by CBO that
    would put about $50 billion into the pockets of students and
    folks who have graduated and who are struggling with student
    loans. It is not, you know, the panacea, but, certainly, if you
    look--if you talk to middle class people, who, you know, are
    trying to lower their monthly expenses, obviously, refinancing
    their home mortgage, car loans, credit card debt. I mean, that
    is a tool that is normal, and yet--but in the student loan
    market because it is restricted in the public side by law, and
    in the private side by the fact that you have to have equity to
    go in and refinance, you need a--you know, some other piece of
    property in terms of writing it down. This is the year we
    should move forward on that. It is just, at least, one way of
    trying to stop the bleeding.
        And I guess, Dr. Kvaal, I guess, you have talked, again,
    about these sort of the horror numbers in terms of default. At
    least being able to refinance down an interest rate, I think,
    would provide some mitigation of that problem. Would you agree?
        Mr. KVAAL. Yes.
        Mr. COURTNEY. Okay, and I do not know if anyone would
    disagree, but I think that would, hopefully, be the case.
        Ms. Parker, you talked about your story. Thank you for
    being here. And I do not mean to, but, you know, the private
    student loan interest rates are far higher than even the
    inflated Stafford rates, and maybe just could comment, if
    having that ability to write down the interest rates would be a
    benefit to you and your friends?
        Ms. PARKER. Thank you. I--yes, it would be a benefit to
    myself and my peers--
        Mr. COURTNEY. Congresswoman Shalala is very excited about
    this bill, obviously, so--
        Ms. PARKER. I have accrued now, and you said in private?--
        Mr. COURTNEY. Both private and public can write down to 3
    percent--
        Ms. PARKER. I am at about $66,000, and I have an
    associate's degree--
        Mr. COURTNEY. Right--
        Ms. PARKER. So, yes, it would be beneficial to merit.
        Mr. COURTNEY. Well, thank you--
        Ms. PARKER. Mm-hmm.
        Mr. COURTNEY [continuing]. and I do not know if--
        Ms. MORRISON-SHETLAR. I would agree, and also I would want
    to say that the North Carolina Promise is a first-dollar plan,
    whereas other free programs tend to be last-dollar and rely on
    existing aid first. So, the North Carolina Promise is actually
    better and more generous, particularly for low-income students,
    so, and I think your comment, financial literacy is something
    that we also need to be making sure that we are educating our
    students and will.
        Mr. COURTNEY. I guess we are about to run out of time, but,
    again, it was part of the Aim Higher Act, last year and,
    hopefully--we are very optimistic this is the year to move
    forward on it.
        Thank you very much. I yield back.
        Chairman SCOTT. Thank you. The gentleman from Michigan, Mr.
    Walberg?
        Mr. WALBERG. Thank you, Mr. Chairman, and thanks to the
    panel for being here. This, of course, is an unbelievably
    important subject for us to be considering, and financial
    literacy absolutely is something that we have not done well,
    and we are seeing the challenges of that.
        Dr. Morrison-Shetlar, I often hear that the FAFSA form is a
    real obstacle to students in continuing their education. I have
    supported legislation that would allow the IRS to share income
    information with the Education Department, thereby making it
    easier for students, and as families, to accurately complete
    the FAFSA form and access student aid.
        This policy would also improve accuracy and cut down on the
    time that student aid administrators spend verifying a family's
    income.
        Dr. Morrison-Sheltar, has it been your experience at the
    Western Carolina University that the FAFSA form can act as an
    obstacle for students? And, second, what advice do you have for
    us to simplify FAFSA in any HEA reauthorization?
        Ms. MORRISON-SHETLAR. I am in complete agreement that the
    FAFSA and the protocol to complete the FAFSA is, for some
    people, an insurmountable position. A lot of our students,
    particularly at Western Carolina University, are first
    generation. They come from low-income backgrounds, and when
    faced with the questions that are on the FAFSA in which they
    have to remember or they do not have the information, they just
    do not do it and, as a result, they do not apply, and,
    therefore, they do not go to university or college. And so to--
    for my recommendation for all of the Federal grants and
    applications, we do simplify them, help people with the
    process, if needed, and we do that at Western Carolina
    University when people approach us.
        And so, yes, I would love to see us streamline those
    compliance, make sure that is streamlined and allows people the
    opportunity to get the education that they deserve and have
    earned as their right.
        Mr. WALBERG. Thank you. Dr. Akers, would you have any
    addition to that from your experience?
        Ms. AKERS. Absolutely. I would adore simplification of the
    FAFSA. I think that your initial comments about financial
    literacy are critically important. Just to cite some evidence
    from some of my earlier research, we know that, through survey
    data, that students are shockingly underinformed about their
    own financial circumstances. So, only about half of students in
    their first year of college education know how much they are
    paying for their degree, and about a third of students are able
    to accurately tell you how much they have borrowed. So, to me,
    this is a pretty important crisis that we have in higher
    education finance today.
        Mr. WALBERG. So, a wake-up call of--for instance, Ms.
    Parker, of $66,000, as you mentioned that. It is amazing. When
    you first started, did you expect anything like that to be the
    case in the process?
        Ms. PARKER. Not only did I not expect it, I, honestly, had
    no idea.
        Mr. WALBERG. No.
        Ms. PARKER. The financial illiteracy piece is a good--
        Mr. WALBERG. Yes. Yes.
        Ms. PARKER. It is a big piece because I just was not aware.
        Mr. WALBERG. Yes.
        Ms. PARKER. I was not informed.
        Mr. WALBERG. Yes. You make the example point very clearly
    that, why we have to move forward on this. Dr. Akers, in your
    testimony, you note that, in some cases, the students are
    spending money on college, only end up worse off financially
    than if they had not gone to college in the first place. In
    looking at the Federal Student Aid System, I am concerned about
    perverse incentives to overborrow. Can you expand a bit on what
    those perverse incentives are, and discuss ways we could
    address them in reauthorization and do it in such a way that I
    can explain it to my adult children in caring for their--my
    grandkids as they come up?
        Ms. AKERS. Sure. So, the most glaring, perverse incentive
    that exists in the current financial aid regime is that
    borrowers who anticipate that they will be eligible for student
    loan forgiveness at the end of either 10 or 20 years, whether
    they are in public or private sector, basically, face no
    marginal cost for every additional dollar that they are
    borrowing. So, consider I am a student at a very high-cost
    institution. I have some understanding of what my career path
    is going to be after I finish, maybe because I am in a
    profession, like law or medicine, where careers are
    relatively--or earnings are relatively well-known. I may reach
    a point in my borrowing, if I have been at high-cost
    institutions, where every additional dollar that I take on in
    debt to support my lifestyle, for instance, will very likely,
    or with almost certainty, be forgiven. And so, in that case, I
    have incentive to borrow as much as I am able to borrow through
    the Federal Lending Program.
        What is the solution to this? I think we need to consider
    limits on the eligibility for loan forgiveness, both in PSLF
    and income-driven repayment plans, like IBR and Pay as You
    Earn. Capping those, I think, would diminish that perverse
    incentive considerably.
        Mr. WALBERG. Okay. Well, thank you.
        Chairman SCOTT. Thank you.
        Mr. WALBERG. I yield back.
        Chairman SCOTT. The gentlelady from Ohio, Ms. Fudge?
        Ms. FUDGE. Thank you so very much, Mr. Chairman, and thank
    you all for being here today; Ms. Parker from Ohio, as well. It
    is a pleasure to see you, and to watch your daughter have such
    great pride when she hears you speak.
        Ms. Parker, surely, if we can provide $13 billion to
    farmers because of the President's bad losing trade war with
    China, we can help you. Surely, if we can give $1-1/2 trillion
    in tax cuts to the wealthiest people in this country, surely we
    should be able to help you and some of those very people we
    have just seen in the news cheat to get their children in
    college and you have done it the hard way. So, I am confident
    that you are going to be successful.
        I am confident that you are going to see your way out of
    poverty because you have worked hard. You are committed and a
    lot of these cheaters are not. So, be confident. Just claim
    that, all right, because you are going to be successful.
        Dr. Kvaal, do you think that it is important for us to
    discuss loan forgiveness as we talk about income-driven
    repayment plans?
        Mr. KVAAL. I do.
        Ms. FUDGE. And what should that be? What should that
    discussion be like?
        Mr. KVAAL. Well, my view is that students who are paying
    everything they are supposed to pay over a period of 20 years
    should, at that point in time, have the opportunity to have the
    rest of their student loan forgiven. Twenty years is a very
    long time. We know that student debt affects your credit score.
    It makes it difficult to save for mortgage. After 20 years, you
    may be trying to save for your children's education, and I
    think there is an opportunity there, where we need to say that
    we have collected what we can collect from the student.
        Ms. FUDGE. So, is there something that we can do in a
    shorter period than 20 years to help somebody like Ms. Parker?
        Mr. KVAAL. Well, I think there is a--there are a couple of
    things that people that qualify--that should qualify for
    special help. I think one is people who go into public service
    careers, and we know that student debt is an obstacle and does
    affect career choices, and that can make it a challenge to
    recruit people into the military and to teaching careers. It
    impacts the diversity of those public service work forces.
        I think a second category is people who have been cheated
    by their colleges, and there are, currently, over 100,000
    borrowers who have applications pending at the Education
    Department claiming fraud or some other illegal conduct at
    their college. Those people need to have their loans forgiven
    as well.
        Ms. FUDGE. Thank you. Just one more question for you, Dr.
    Kvaal. Grad PLUS loans. How do you believe that Grad PLUS loans
    assist with students in underrepresented communities, or even
    fields, for that matter, can get to graduate school, and what
    effect would there be if we eliminated them altogether?
        Mr. KVAAL. Well, Graduate PLUS loans are an important
    source of finance for many people pursuing graduate and
    professional degrees, especially people whose families are low
    in wealth, including communities of color. And we expanded
    access to Federal loans for these communities because we were
    concerned that, otherwise, they would borrow higher cost
    private loans that have interest rates that can be as high as
    13 or 14 percent.
        Ms. FUDGE. Dr. Morrison-Shetlar, since you represent a
    university that deals with a lot of first-time and low-income
    students, what do you think we should be looking at to try to
    reduce the ongoing, and sometimes it is exorbitant, rate that--
    of loans that people have to take out? What do you think we
    should be doing differently? Is it increasing Pell Grants? Is
    it doing--just give me your ideas.
        Ms. MORRISON-SHETLAR. I certainly would approve of reducing
    the cost to a student to be able to attend, and attend their
    dream of a--of an education. There are a lot of grants, as we
    heard, loans out there. I would like to see those simplified in
    terms of applications and more investment in those.
        Pell Grants is a really good example. With over 40 percent
    Pell Grant--Pell-eligible students at Western Carolina
    University, we could see a tremendous amount of reduction in
    indebtedness with all of the results that occurs from that:
    people graduating on time, not having to do three or four jobs
    to be able to make it through, which distracts from their time
    of really focusing on their education and their future careers.
    So, I would like to see what we are all currently doing
    expanded, and make sure that it is the easy--and relevant to be
    able to apply for those opportunities.
        Ms. FUDGE. Thank you very much, and I am going to close,
    again, with Ms. Parker. You know, we live in a country where
    people say if you work hard, you will be successful and you
    will do well. I want you to know that those people who believe
    people like you are lazy--you are a perfect example of someone
    who is not. I wish you all the very best. I yield back.
        Chairman SCOTT. Thank you. The gentleman from Kentucky, Mr.
    Guthrie?
        Mr. GUTHRIE. Thank you, Mr. Chairman, for yielding time,
    and thank you for the panelists for being here today. This is
    an important hearing, and I appreciate the chairman for calling
    it.
        So, Dr. Akers, according to a study by the Brookings
    Institute, only a quarter of first year students could
    accurately report how much they had borrowed, and 14 percent of
    students who had borrowed money thought they had no debt at
    all. This information problem is very concerning to me, which
    is why I have introduced a bipartisan counseling bill with my
    friend, Congresswoman Bonamici from Oregon, in the last three
    Congresses to enhance financial aid awareness and
    understanding. The bill would require more detailed and annual
    counseling for Federal aid recipients throughout their
    education. Can you discuss the benefits of counseling students
    on their financial aid?
        Ms. AKERS. Sure. So, a lot of folks are looking into the
    fact that the provision of information about the cost that
    students are facing and the aid that they are receiving is
    unnecessarily difficult to digest. So, the students were--
    discussed just recently are receiving, right now, their
    acceptance letters to universities and also their financial aid
    award packages. These packages are not often, like, complete
    transparent about the difference between loans and grants, and
    I think this is leaving students questioning what exactly their
    financial circumstances are. Obviously, it is leaving them
    questioning that because we were able to document that using
    survey data. So, if we want students to be able to police the
    market for higher education using their dollars, that is
    choosing to spend at institutions that are delivering good
    outcomes for students, they need to understand what it is they
    are paying. They need to understand what it is they are
    borrowing.
        We also, of course, want them to understand what it is that
    institutions are delivering to students that they have served
    previously. So, I think it is critically important to the
    system, and also just to individual students themselves.
        Mr. GUTHRIE. Thank you very much. And, Dr. Webber, with
    $1.4 trillion in outstanding Federal loan debt, there is no
    doubt that students are struggling with student debt. In your
    testimony, you noted the large amount of misinformation on who
    is suffering the most from taking on loan debt. Can you please
    explain what level of education students with $60,000 or more
    debt are seeking compared to the average balance of defaulted
    loans?
        Mr. WEBBER. Sure. So, on average, the typical student who
    has, you know, more than, say, $100,000 in debt, first, they
    are very rare. We are talking about 5 percent of borrowers.
    Most of them are people who have gone to graduate school and
    received, you know, professional degrees, med school that are
    going to pay off in spades. Not all of them. And, you know, I
    do not want to minimize the problems that some have, but it is
    somewhat of a distraction from the much, much larger problem of
    people who have, say, between $5,000 and $10,000 in debt, but
    did not graduate, attended a, you know, low value institution
    and under-resourced institution, and said--because the vast
    majority of the college premium is tied up in actually getting
    the degree, then, you know, having $5,000 or $10,000 in debt,
    which is not dischargeable in bankruptcy, you are going to be
    much, much more likely to default under that scenario than
    someone with, you know, a graduate or professional degree and
    much more debt.
        Mr. GUTHRIE. Thank you very much. And Dr. Morrison-Shetlar,
    I was interested in your testimony about the partnership with
    regional community colleges, and could you elaborate on this? I
    know, in Kentucky, a lot of people are getting their 2-years
    degree and then moving on. They matriculate direct, straight
    into our 4-year universities with the transferring credit. And
    when I was in the State legislature, I worked with someone to
    do dual credit, and we actually have people graduating from
    high school with their associate's degree if they want to do--
    move forward. Since they are with no debt, I think that there
    is some cost to it, but it is not, typically, if they went,
    graduated from high school and went. So, could you explain what
    you guys are doing to keep college costs down by working with
    community colleges?
        Ms. MORRISON-SHETLAR. Most certainly. The great thing about
    Western Carolina University is that we work with all of our
    community colleges. We set up MOUs through particular tracts of
    education, so that students, when they go to the community
    college, know what they need to take at the community college
    that will count toward their 4-year degree, should they choose
    to go on and do that. And so we work very closely with the
    presidents and with the admissions office and with the advising
    office, which I think is a key component to anyone transferring
    from one institution to another. At Western, we have--42
    percent of our students are transfer students, and we make sure
    that the curriculum alignment is in place, and that, also, the
    advising that they are getting at the community college is
    enough affiliation with that at Western Carolina University.
    So, a seamless transfer is really, really important. Curriculum
    alignment is really, really important.
        Mr. GUTHRIE. Thank you. I appreciate everybody for being
    here, and the chairman for calling this meeting. My time has
    expired, so I yield back.
        Chairman SCOTT. Thank you. The gentleman from the Northern
    Mariana Islands, Mr. Sablan?
        Mr. SABLAN. Thank you very much, Mr. Chairman. Thank you
    for holding this hearing. Good morning to all the panelists.
    Welcome, Journey. I hope that you will remember forever this
    moment in your life, and how your mother is sharing her story
    with us because that story is, has you as a part in it, a major
    part.
        I would also like to take an opportunity, the privilege, to
    recognize in the audience a student from the Northern Marianas,
    who is attending school here in Washington, DC, Olivia. So,
    your name is on the record for good. She does not like that,
    but anyway.
        I come from a place where we have a community college, a 2-
    year college. Ninety percent of our students qualify for a Pell
    Grant. And when I went to college, I was, had to come here as a
    foreign student. My father had a family of seven children to
    raise, and was making $1.00, $1.25 an hour, and he lost his
    job. I could not just go and get a job because I needed to get
    immigration to approve it as well. So, it was not easy for me
    to finish college, to be very honest.
        Ms. Parker, congratulations. I mean, well, you are in my
    prayers, too. You will succeed, also.
        I agree with--but Chancellor Morrison-Shetlar, you may not
    know this, but, again, my district, in the Northern Mariana
    Islands and American Samoa, are the only two U.S. jurisdictions
    without a 4-year public university. It holds a single community
    college. Our students face the cost of nonresident tuition at
    4-year institutions, as well as the extra travel cost to attend
    school in Hawaii, 4,000 miles away from home, or almost 8,000
    miles away from your school. And as a member of this Committee,
    I have worked and I continue to work on legislation to help
    reduce the cost for my constituents. I must compliment your
    State for committing the resources, to be able to offer, make
    college affordable, and also make sure the students are
    nurtured, too.
        I will submit my questions for the record, but as a
    university chancellor, do you believe the Federal Government
    has a role to play in assisting students with unique college
    costs, such as those from the Marianas and American Samoa?
        Ms. MORRISON-SHETLAR. The Federal Government has a number
    of things in place, and, as I mentioned earlier, I think the
    way to help people is to make sure that those grants and loans
    that are available are able to be easily attained. At North
    Carolina, we subsidize the in-State students up to the $500 per
    semester. We also have a $2,500 for out-of-State, but we also
    are, have an 18 percent cap on the number of out-of-State
    students that we can take into North Carolina--
        Mr. SABLAN. I--
        Ms. MORRISON-SHETLAR [continuing]. and I think that is
    something that one has to be aware of when we are funding the
    students at North Carolina. I will say that we are very
    fortunate at Western Carolina University, and within the
    system, actually. Fifty percent of the students who come from
    out of State to North Carolina end up staying in the State of
    North Carolina--
        Mr. SABLAN. Mm-hmm.
        Ms. MORRISON-SHETLAR [continuing]. and so that is a great
    investment in North Carolina, and allows people to give back to
    the economy within North Carolina.
        Mr. SABLAN. Right. Thank you. And for me, we prefer that
    you educate our students and then they come back home and use
    what they learn.
        But, Ms. Parker, college students in the Marianas and
    across the country are juggling work, parenting, and school. In
    fact, one in four students nationwide are parents. More than
    one in three are older than 25, and almost two out of three
    work while in college. So, what supports made it easier for you
    to remain in college, persist?
        Ms. PARKER. Thank you, and thank you for your wishes
    earlier. I have been supported--I have been connected to
    resources, and that is what has been able to get me to
    completion. For example, the biggest help, I would say, was
    being connected to the jobs and family services representative
    on campus. I went to visit the representative for childcare
    costs. I needed help getting childcare costs to be approved
    while I was in school, and Journey was in daycare at the time.
    When I went to speak to the job and family services
    representative, she also let me know that I could enroll for
    additional benefits, so the healthcare, the food stamps. And
    then I was also referred to, in that same department, not
    through her, specifically, but to Scholar House for the student
    parent housing. It, takes a platform of all of those put
    together for me to be able to get to completion.
        Mr. SABLAN. Thank you, and thanks, Mr. Chairman. My time is
    up. I will submit questions for the record. Thank you,
    everyone.
        Chairman SCOTT. Thank you. The gentleman from Georgia, Mr.
    Allen?
        Mr. ALLEN. Thank you, Mr. Chairman, and thank you for,
    again, for this hearing. It is important to find out what has
    actually got us to this point, and then try to fix it. It is a
    difficult situation.
        We have got 7.4 million jobs open in this country right
    now, and we got college graduates that cannot get a job. I
    cannot, for the life of me, understand that. And everywhere I
    go, people need people and, now, this is not necessarily, a
    college graduate. It is just, you know, skilled people. And, of
    course, the Chairman put up a chart up there about the
    difference in the wages of college graduates versus those who
    maybe have technical training and all that. That gap, in my
    opinion, is narrowing very quickly. I know that when I was in
    college, I had the opportunity to learn how to weld, and
    through that skill I was going to co-op, and through that skill
    and working basically double time and help for my parents, I
    was able to get through it. And, of course, I thought it was
    terribly expensive back then, and I am sure I missed out on
    some of the college experience, but I had no college debt
    thanks to my great family and their support. So, I cannot
    imagine, Ms. Parker, what you have been through.
        And also to straighten out one other thing that came up
    here today, and I just have to do this, is that I did notice
    that you were on the Food Safety Nutrition Program. One of my
    colleagues brought up the farm bill. Eighty percent of the farm
    bill is funding the Safety Net Nutrition Programs. It is not
    greedy farmers. We are just trying to keep our farmers in
    business, so we can produce the best, safest, most efficient
    food supply. It is a few--it is a national security actually.
    So, since you are here, and you are learning from us and we are
    learning from you, I thought you probably needed to know that.
        So, with that, you know, Dr. Akers, your testimony mentions
    ways to bring private capital back into the student loan space,
    increase our competitive market participation in student
    lending. And can you expand on those issues and discuss any
    challenges policymakers should think about while considering
    private sector participation and student learning--lending?
        Ms. AKERS. Sure. Is the question about private sector
    participation in provision of education or in the financing?
        Mr. ALLEN. Well, in the financing. For example, we were
    told that the student loan rate is somewhere between 7 and 8
    percent, and I know that--I mean, I come from the business
    world, and we borrow money for much less than that. Now,
    obviously, you might have to get, you know, some, you know,
    like a small business government-backed loan, but at least you
    could reduce the interest rate substantially and provide a--you
    know, where Ms. Parker could go and say, well, the government
    is charging me this, and you are going to charge me, give her
    choices.
        Ms. AKERS. Mm-hmm.
        Mr. ALLEN. And also, the financial institutions, I think,
    would do a much better job at least. I have to do a portfolio
    and tell them how I am going to have to pay the money back.
    Maybe they could educate Ms. Parker on how to really pay that
    money back.
        Ms. AKERS. Sure. So, there is a bit of a misconception
    about the idea that private sector capital was previously
    involved in the Federal Student Lending Program. So, depending
    on how long you have been involved in this issue, we previously
    were providing Federal student loans through the FFEL Program,
    in which the loans were originated and financed by the private
    sector, but those loans were originated using terms that were
    prescribed by legislation. So, in essence, Department of
    Education was outsourcing to the private market the creation of
    those loans. Those loans were not private sector or private
    loans in any broader sense because they were not underwritten.
    So, what you are talking about is the process by which a
    private lender looks at a particular borrower and assesses
    their ability to repay in the future. That does not happen in
    the Federal Lending Program for student borrowers and did not
    happen, even when private capital were involved. The way
    forward, to think about private capital in higher education
    finance, I believe, is in the realm of income share agreements.
        So, income share agreements are a relatively newly employed
    mechanism that are an alternative to loans that can help
    borrowers finance their education. So, rather than taking out a
    loan and having fixed payments to repay over 10 years, or
    whatever the term of the loan is, a borrower takes cash up
    front in exchange for a promise to pay a fraction of their
    income over a set period of time, and so this provides an
    insurance policy for students that if they face low income or
    no income, for whatever reason, they are not on the hook for an
    unaffordable financial obligation, and it also puts some skin
    in the game for institutions. So, in thinking about private
    capital, going forward, I think that is the place to focus
    attention.
        Mr. ALLEN. Well, again, for--I had an amendment on the past
    bill markup to somehow put financial, actually, education into
    the student loan program. So, you know, like, folks like Ms.
    Parker would understand, you know, what she is up against.
        So, Mr. Chairman, I am out of time. I yield back. Thank
    you.
        Chairman SCOTT. Thank you. The gentlelady from Oregon, Ms.
    Bonamici?
        Ms. BONAMICI. Thank you, Chairman Scott, and to Ranking
    Member Foxx, for holding this hearing. Thank you to all of our
    witnesses. Ms. Parker and Journey, and, especially, thank you
    to you for being here and telling your story, and reminding us
    that the costs of higher education are not just about tuition,
    housing, childcare. There are so many other costs as well.
        I also worked my way through. I started at 2 years of
    community college, then 2 years of college, 3 years of law
    school with a combination of grants, loans, and work study, and
    ended up, because it was a long time ago, with a manageable
    amount of debt. And my first job was with the Federal
    Government, not with a law firm where I could have made more
    money. And, unfortunately, that is not the story I hear
    frequently today. So, I am really glad that we are having this
    hearing, especially when we are talking about students who
    remain underrepresented, but I am also glad that there seems to
    be a general recognition about the importance of higher
    education among people here today.
        We certainly need a short-term solution for people like Ms.
    Parker with existing debt, but we also need long-term solutions
    to make sure that anyone who wants to go to college can do so
    without being burdened with debt.
        So, Mr. Kvaal, nice to see you. The Federal Work Study
    Program allows students to get work study experience and
    financial aid, and I have introduced the Opportunities for
    Success Act to reform the Federal Work Study Program, to
    modernize the funding formula, which has not been done for
    quite some time, and also to make sure that work is going to,
    the work study jobs are helping to align students, work with
    their career goals and interests. We want the aid to go to the
    students most in need. So, what are your suggestions about how
    to make sure that institutions are serving the largest number
    of low-income students and helping to align their interests
    with their work study jobs?
        Mr. KVAAL. Ms. Bonamici, thank you for the question. I
    share your support for the work study program. Work is an
    important strategy for getting students through college, both
    because it fills important gaps in financial aid budgets, but,
    also, research shows that modest amounts of work can actually
    help retain students and give them an opportunity to explore
    career interests and improve their earnings potential after
    college. The challenge we have, though, is many students are in
    the same low-wage work force as other low-income Americans, and
    we know those jobs are very unstable, can be difficult to get
    scheduled. So, to have an opportunity for a work study program,
    where jobs are designed around schedules, the students, they
    are often on campus. They are connected to career and academic
    interests. It is very valuable.
        The existing work study program funds colleges largely,
    historically, and it does--no longer sends the money where
    there are large numbers of low-income students. So, for
    example, New York University gets a larger allocation than CUNY
    does. In fact, if you are a low-income student at a 4-year
    private university, you are more likely to get work study than
    a low-income student at a public university, even with--we know
    public universities disproportionately enroll low-income
    students. So, I think that--
        Ms. BONAMICI. Thank you, and I want to get another couple
    questions in, but--
        Mr. KVAAL. I apologize--
        Ms. BONAMICI [continuing]. I think the message that it is
    time to update the funding formula. Thank you, also, for
    mentioning my Simple Act that I have been working on to--I plan
    to reintroduce this bill, which will protect many borrowers
    from default by getting more students and keeping more students
    in income-driven repayment. And you mentioned the importance of
    automating the annual income recertification process, and also
    automatically enrolling severely delinquent borrowers. These
    are both changes in the Simple Act. Can you talk a little bit
    about how this will help students?
        Mr. KVAAL. Yes. The income-driven repayment is a really
    important safety net. It allows us to tell students we think
    loans are an excellent investment, but if it does not pay off,
    we can guarantee that loan payments will be affordable. There
    are very important changes that need to be made to the program,
    to simplify the program for students, make it easier to enroll,
    auto enroll delinquent students. And so I think the Simple Act
    has a lot of potential to reduce loan delinquency and default
    and make a real difference.
        Ms. BONAMICI. Thank you so much. And I also heard retention
    several times this morning, and that is a significant issue,
    especially if we look at the students with debt. If they do not
    graduate, they are much less likely to be able to pay that
    back. So, who wants to talk about the importance of GEAR UP and
    TRIO and programs that help with retention? Who--Dr. Morrison-
    Shetlar?
        Ms. MORRISON-SHETLAR. All of those programs help with
    retention, and it is key that if you have students who have
    debt that you get them through the process, and you get them to
    a point where they can start to work and earn money and pay
    back those debts, and those programs that you are talking about
    are essential. They are--they include things like financial
    literacy. They include things like working. If you are going to
    work, work in something that will get you the experience that
    will help you to succeed in your career. So, there are career
    pathway experiences. And so all of those things help with
    retention and just making sure that students can focus on their
    studies and get their work done without having to work on two
    or three jobs, really, really is important. So, all of--any
    program that will help students be able to focus and get
    through their degrees and be successful, I am fully supportive
    of.
        Ms. BONAMICI. Thank you, and I am over time. I yield back.
    Thank you, Mr. Chairman.
        Chairman SCOTT. Thank you. The gentleman from Pennsylvania,
    Mr. Smucker?
        Mr. SMUCKER. Thank you, Mr. Chairman. Question for Dr.
    Shetlar. I would like to learn just a little bit more about
    your transfer program, which helps students prepare for several
    high-demand career fields that you described. How did you
    determine what jobs are in high demand in the work force?
        Ms. MORRISON-SHETLAR. So, within Western North Carolina, we
    do surveys. We look to see what jobs are available, in
    particular what jobs are needed. And so, in our particular
    area, healthcare is a big industry, and one in which we are--
    severely need for the citizens of Western North Carolina. And
    so we make sure, as an institution, that we are providing the
    right programs with the right qualifications and the right
    experiences, so that students will then graduate and then go
    into those careers and be successful, and that lifts up the
    whole economic development of our region.
        Mr. SMUCKER. Yes. Can you talk a little bit more about the
    agreements that you have in place with some of the partner
    colleges? Was it difficult to reach those agreements, or talk a
    little bit about how that came about?
        Ms. MORRISON-SHETLAR. Well, we all have the same goal in
    mind: for our students to be successful. And to do that, we
    need to make sure that we have curriculum alignment. If you are
    taking 2 years of community college and earning your A.A.
    degree, then those credits transfer into your 4-year degree,
    and then you can go through as seamlessly as possible. Advising
    is really key on that. So, we do joint advising between the
    community colleges and the university, making sure that the
    advisors know what to say to the students if they even are
    thinking about going to a 4-year degree because a lot of
    students go to community colleges not thinking that they are
    even going to have that dream. And so advising is a real
    component.
        And then making sure that those memorandums of
    understanding between the colleges and the universities are
    clear and updated regularly as curriculum changes to meet the
    needs of a growing industry, like healthcare.
        Mr. SMUCKER. Yes. Well, in your mind, what could other
    regions learn from you? What obstacles would they have to
    setting up similar arrangements?
        Ms. MORRISON-SHETLAR. It is all about communication. It is
    all about the best for the student, and making sure that
    pathway is one that is affordable, that--and this is where NC
    Promise, I think, has been fabulous because the cost of NC
    Promise is--to the student can be similar to a community
    college cost. And, therefore, if a student has managed to get
    through the 2 years, then, with the cost of that, to be able to
    transfer to Western Carolina University, for example, is an NC
    Promise school, means that they are already on that pathway.
    They know that they can afford it. They know how much debt they
    are going to incur, and they know that they are going to get a
    high-quality education provided by high-quality faculty and
    staff, who make sure that they have the experiences that they
    need to be successful.
        Mr. SMUCKER. Thank you. Dr. Akers, innovation in any
    industry is critical to increasing competition amongst
    providers in delivering a high-quality product to consumers at
    a low price, and it appears that, you know, colleges and
    universities--we know education is changing, but, in some ways,
    continue to use the same model that has been in existence for a
    long, long time, for decades and maybe longer. How can we be
    helpful or to--maybe to what extent do you think the Federal
    Government sort of constrains what colleges and universities
    can do? How can we work with you to encourage more innovation
    in higher education?
        Ms. AKERS. Sure. So, in order for a new institution to come
    into existence, they need to be able to find and retain
    students. It is challenging for them to do that in the current
    space because they are competing with institutions who have
    eligibility for very generous aid through the Pell Grant
    Program and access to subsidized student loans.
        The way to potentially allow them access to Federal student
    aid is through the Experimental Sites Initiative and the EQUIP
    Program. So, this is an effort that was started under the Obama
    Administration, to allow innovative institutions that do not
    fit the standard model of what higher education looks like in
    this country and, therefore, do not achieve the standards that
    are necessary to gain access to financial aid. It allowed them
    to partner with traditional institutions and to sort of play
    with Federal student aid and experiment. That effort was not
    largely successful, perhaps because of the way it was designed.
        I would encourage that the Federal Government continue to
    support those types of initiatives that do not just open the
    floodgates and allow Federal student aid to be utilized by, you
    know, these new and exciting business models without, you know,
    any accountability, but rather to continue to test out and
    using different sites and trial programs for these new programs
    that have a proven track record of success.
        Mr. SMUCKER. Great. I look forward to working with you on
    that, but my time is up. Thank you.
        Chairman SCOTT. Thank you. The gentleman from California,
    Mr. Takano?
        Mr. TAKANO. Thank you, Mr. Chairman. I do appreciate that
    you are holding hearings on this important topic. I want to
    thank all of the panelists for being here today, but I want to
    begin my question with Mr. Kvaal. It is good to see you again
    and thank you for being here to share your recommendations on
    improving college affordability.
        I have a letter from Chancellor Oakley of the California
    community colleges that describes how the California community
    colleges have been hit hard, particularly by the for-profit
    closures in the State of California. And when, so, what happens
    is when for-profit companies suddenly shutter, the community
    colleges, which are already under-resourced, how they mobilize
    to provide support to affected students. So, without objection,
    I would like to enter this into the record.
        The ability of the community colleges to properly serve
    these students is severely hampered by the poor-quality
    education--the poor quality of education that the students
    receive at the for-profit institution, and by the debt load
    students carry after attending one of these schools. I have
    heard too many stories about students attempting to transfer
    their credits, only to find out that almost none of their
    credits actually transferred, and that they are nearing the
    maximum--their maximum loan limit, impeding them to continue
    their education, in this case at community colleges. So, Mr.
    Kvaal, what can the Federal Government do to provide better
    upfront accountability of for-profit institutions to better
    protect students?
        Mr. KVAAL. Thank you for the question, Mr. Takano. We have
    seen, over the last few years, for-profit colleges enrolling
    over 100,000 students close and leave them in the bind. So, the
    instances you mentioned, in California, are only the latest in
    a long chain that began with Corinthian. It is important to
    have strong accountability protection, such as the Gainful
    Employment Rule, which requires that typical graduates of for-
    profit programs be able to repay their loans; the Borrower
    Defense Rule, which holds colleges accountable for illegal
    conduct, such as fraud; the Incentive Compensation Rule, which
    prohibits deceptive and high-pressure recruiting; and the 90-10
    Rule, which requires at least 10 percent of students being
    willing to pay for the education out of their own pocket. So,
    there are important accountability rules. Many of them are
    being neglected by the current administration, and others need
    to be strengthened by Congress.
        Mr. TAKANO. Yes, I am aware of the neglect and, actually,
    the rollback of protections, and I understand in the chairman's
    Aim Higher Act that we actually work to strengthen some of the
    protections you mentioned. How do we ensure that students are
    not left with burdensome debt after a for-profit closure?
        Mr. KVAAL. Well, one important step is to make sure that
    students have their loans discharged after a school closes. The
    current law gives them the right to choose whether to transfer
    or get their loans discharged. Many students never actually do
    either, so it is important to guarantee them that automatic
    right to have the school discharged. We need to adequately fund
    tuition relief funds, so that students have that means, and we
    also should not keep students in the dark. So, you know, when
    the Argosy College and these other colleges closed last week,
    it was not a surprise to the executives at those colleges. It
    was not a surprise to the Department of Education, but it was a
    surprise to a lot of the students who were borrowing and
    dipping into their savings to go to those schools.
        Mr. TAKANO. That is amazing. I want to talk about Income
    Share Agreements, or ISAs, that are contracts between college
    students and investors, in which an investor agrees to pay a
    portion of a student's tuition for a portion of the student's
    future income after graduation. Speaking frankly, I see ISAs as
    another way to push the private market onto students, which has
    never resulted in positive outcomes. In an effort to shore up
    profits, the private market has been inclined to irresponsible
    and unfair practices when lending to vulnerable students, which
    is what led us to include consumer protections in the Dodd-
    Frank Act in 2010. Given the history of the private market and
    college financing, I am concerned with the potential abuse of
    students through ISAs. Mr. Kvaal, what are some of the other
    pitfalls of ISAs?
        Mr. KVAAL. Well, I share your concerns, Mr. Takano. I think
    that private loans, including ISAs, will always have higher
    costs and weaker consumer safeguards than Federal student loans
    do. ISAs, in particular, are not transparent, and because
    students have very different earning trajectories, sometimes
    because of labor market discrimination, ISAs have the potential
    to have higher costs for some types of students and even
    exclude some students from some types of programs or colleges.
        Mr. TAKANO. Well, my time has expired. Mr. Chairman, I
    yield back. Thank you.
        Chairman SCOTT. Thank you. Thank you. The gentleman from
    Kansas, Mr. Watkins?
        Mr. WATKINS. Thank you, Mr. Chairman. Thank you all for
    being here. So, I represent Eastern Kansas. It is agrarian, and
    then there is lots of poverty issues there, and I know,
    personally, what it is like to try and, oh, deal with mounting
    school debt. So, it seems to me, the solution was a pro-
    economic growth policy, characterized by low taxes and low
    regulation that allows the economy to thrive, and does it work?
    Well, our pro-growth economic policy has led to record low
    unemployment. We are enjoying over 7 million job openings. The
    Labor Department, when reporting on hiring competition, says
    that here is an increase in average hourly pay by 3.4 percent
    from last year, which is the highest in a decade. Given the
    strong economy, Dr. Akers, are you seeing States beginning to
    thoughtfully reinvest into their higher education institutions,
    given the strong economic performance nationally?
        Ms. AKERS. Yes. It does seem that there was a decline in
    State support of higher education following the Great
    Recession, and we have seen recent indication of an increase in
    investment.
        Mr. WATKINS. Thank you, Doctor. Chancellor Morrison-
    Shetlar, staying with the excessive red tape subject, would you
    speak to any burdensome Federal regulations on the higher
    education community that could be cut, so that you can spend
    more focus on students and education?
        Ms. MORRISON-SHETLAR. One of the main issues that we have
    is just the cost of compliance, meeting the compliance
    regulations and needs. It would be great if we could either
    keep the amount of compliance that we have, that we have to
    report on, or decrease it. That would certainly help us with
    the burden of that because we are actually having to hire
    people to be able to help us with that, rather than using those
    resources to invest in education.
        Mr. WATKINS. Great. Thank you. Thank you, Chancellor, and
    thank you all for being here. Mr. Chairman, I yield back my
    time.
        Chairman SCOTT. Thank you. The gentlelady from North
    Carolina, Dr. Adams?
        Ms. ADAMS. Thank you, Mr. Chairman. The clock, there was
    some extra time on there. Let me thank all of you, first of
    all, for being here and for your testimony.
        Ms. Parker, I am very moved by your story. I am a retired
    professor of 40 years at Bennett College in Greensboro, North
    Carolina, where I worked with young women just like you. I went
    to school, like you, and took my children with me, and I know
    the struggle, but, of course, when I was in school, many, many
    years ago, the cost was not nearly what it is today.
        Dr. Morrison, thank you for what you do for our students in
    North Carolina.
        Mr. Chairman, I would like to submit, for the record, a
    letter from CLASP, an organization that supports low-income
    students.
        Chairman SCOTT. Without objection.
        Ms. ADAMS. Thank you. Let me ask, first of all, Chancellor
    Morrison-Shetlar, you helped create the North Carolina Promise
    Program. I was a member of the North Carolina House when that
    discussion came up. I was a little concerned, as well, about
    not only the fact, I think, we always need to try to make
    college affordable. Access and affordability really are key for
    students. Having worked at a private institution, knowing a lot
    about our historically black colleges and universities in North
    Carolina, I had a concern about the cost that the college would
    incur, and with $500 that the students pay.
        Do you have any information about, you know, I know
    Elizabeth City is one of the schools. They are a fine
    university. I had an opportunity to talk with the Chancellor
    fairly--but I am curious about that, and I know how it is a
    game changer for students, but in terms of the struggle for
    universities?
        Ms. MORRISON-SHETLAR. This is a very ambitious program and
    the State has stepped forward and, this first year alone, $51
    million have been put toward the success of this program. And
    so the universities are subsidized and given the money by the
    State to make sure that there is no impact on the quality of
    the education that the institutions are able to provide.
        Ms. ADAMS. Mm-hmm. I also know that, you know, with the
    universities, and this is supposed to be for, what, 3 years for
    the students? Is that correct?
        Ms. MORRISON-SHETLAR. No. For the students, it is the
    time--the whole time that they are in the university.
        Ms. ADAMS. Oh, Okay. Okay. Okay. I was trying to figure
    that out. Let me ask what considerations did you give in terms
    of helping to get this program started?
        Ms. MORRISON-SHETLAR. As soon as we heard about it, we
    wanted to work very closely with our legislators to make sure
    that it was functional for the universities and, most
    importantly, that it was something that was transformational
    for our students to have, particularly Western North Carolina.
    We have a lot of low-income students. We are a very rural area.
    The other three--the other two institutions are also in rural
    areas. We wanted to make sure that the right people were able
    to access this kind of--
        Ms. ADAMS. Right.
        Ms. MORRISON-SHETLAR [continuing]. program--
        Ms. ADAMS. Okay.
        Ms. MORRISON-SHETLAR [continuing]. and so the ability to
    let people know that this was available to them, that an
    education was available to them, was important.
        Ms. ADAMS. Thank you, ma'am. Dr. Kvaal, this hearing has
    focused a lot of attention on the hardships of students of
    color and what they face in terms of the student aid space. Our
    Nation's minority-serving institutions provide a quality
    education to a sizable portion of black and brown students, and
    do so at a fraction of the cost of most flagship public
    universities. But despite the fact of what I just said, the
    President's budget level funds Title 3 and 5 and allows
    important mandatory funds to expire. In your opinion, if we
    were to increase Federal investment in our Nation's MSIs, is it
    your thinking that we could close some of the gaps in terms of
    access, affordability, and completion among students of color
    compared to their counterparts?
        Mr. KVAAL. Yes. We know those funds get--those institutions
    get much less funding per student, and it is not a surprise
    that is one reason why their graduation rates are not as high
    as some other institutions.
        Ms. ADAMS. Okay. One quick question, and I think maybe Dr.
    Akers spoke to this, in terms of the student understanding the
    financial aid packages. What can we do to help them better
    understand it? And if we can get Ms. Parker to make a quick
    response, too, because she commented about that as well.
        Ms. PARKER. I think that it is important that,
    specifically, when students are going from high school to
    college, to also educate their parents because if you are
    talking about students from low economic backgrounds, it is a
    generational effect. That is something that is happening before
    it even got to that one student.
        Ms. ADAMS. Okay.
        Ms. AKERS. I think that higher education is an incredibly
    complex product, and so, while I hate to have a recommendation
    for heavy-handed approach about how institutions should be
    delivering their financial aid award letters, I think it is
    justified that we direct some sort of standardization in the
    provision of that information to students.
        Ms. ADAMS. Great. Thank very much. Mr. Chair, I yield back.
        Chairman SCOTT. Thank you. The gentlemen from--excuse me,
    the gentleman from Texas, Mr. Wright?
        Mr. WRIGHT. Thank you, Mr. Chairman, and thank all of you
    for your testimony today. And Dr. Morrison-Shetlar, what you
    described as very similar that North Carolina is doing, and I
    want to compliment your State, is similar to what the
    university in my district has done, University of Texas at
    Arlington. It is 55,000 students, including online courses. It
    is the fastest growing campus in the UT System, which is a very
    large system in Texas and second only to Austin. But here is
    the interesting thing: it has the lowest debt, average debt,
    for a graduating student of any college or university, private
    or public, in Texas, and one of the lowest in the United
    States. The average is like $14,700 of debt. And one of things
    they did is similar to what you talked about in terms of
    partnerships with community colleges, but they did something
    really, what I think is special. And I wanted you to comment on
    this because the president of the university and the president
    of the community college, the school superintendents in the
    area came together, and in order to try and lower that cost for
    the students, the high school students can go to the community
    college and take courses and get college credit, which, when
    they get to UT Arlington is then recognized and accepted by the
    university, and a lot of students are taking advantage of that.
    Can you speak to that in terms of your experience? Do you all
    engage the high schools in North Carolina to any degree?
        Ms. MORRISON-SHETLAR. I cannot speak directly from what the
    schools do directly with the community colleges, but the idea
    is absolutely fabulous, and in any way that we can make sure
    that students have a seamless transfer from the K through 16 is
    really, really a great thing to be thinking about. So, I would
    like to learn more about it.
        Mr. WRIGHT. Great, and I yield the rest of my time back to
    Dr. Foxx.
        Mrs. FOXX. Thank you very much. Dr. Webber, you discussed
    noncompletion in your testimony, and call it the biggest risk
    associated with going to college. Are you familiar with the
    revenue theory thesis, where institutions are spending on
    faculty prestige and influence instead of on support services
    to help students graduate? I am particularly interested in your
    opinion on the effects highly priced academic programs have on
    perceived educational quality and student access.
        Mr. WEBBER. Well, thank you for the question. It is very
    important. First, I would say that there is mixed evidence as
    to the impact of very highly priced educational programs.
    Certainly, there are impacts of truly increased college
    quality. There are large earning impacts from, say, going to a
    high-quality State flagship university versus a regional
    comprehensive, for any number of reasons. There are, I think,
    are--I do not think that there is strong evidence to suggest
    that these so-called fancy universities, the, you know, very
    highly priced private institutions, that there is a causal
    effect of, you know, higher earnings or anything from those.
        Mrs. FOXX. I'm interested in the existing research behind
    the trends in the value proposition of college. We have all
    heard college graduate earnings outpace peers who attain a high
    school education. However, according to the Federal Reserve
    Bank of Saint Louis, the economic return on college is unequal
    across the population and diminishing across successive
    generations of college graduates. Dr. Akers, what can we do to
    restore the return on investment to higher education and make
    the prospect of college less risky?
        Ms. AKERS. So, there is a vast body of evidence estimating
    very large positive returns. Higher education, of course, there
    is a dispersion of what those returns are across the different
    classes of students, particularly with respect to their
    family's wealth. I think the most important thing to consider
    in maintaining the value that we have seen historically on
    higher education is ensuring that prices do not continue to
    creep up at the rate that they have been growing. I believe
    that the most important tool we have for doing that is in
    empowering consumers with information, so that they can make
    informed choices about where to spend, to the extent that they
    understand where spending is worth it and where it is not. They
    can put pressure on the institutions themselves to keep price
    in line with value.
        Mrs. FOXX. Thank you, Mr. Chairman. Thank you, Mr. Wright.
        Chairman SCOTT. Gentlewoman's time has expired. The
    gentlelady form Connecticut, Ms. Hayes.
        Ms. HAYES. Good afternoon everyone, and thank you, Chairman
    Scott, for holding this very critical hearing. Ms. Parker, your
    story is my story. You are me. So, I, everything that you said
    resonates with me, and I am so in credibly familiar with the
    idea of going through community college and working three jobs
    because this is my experience.
        I will disagree with you on one thing. You said the odds
    are that you will not lift yourself out of poverty. You already
    are lifting yourself out of poverty, so I hope you know that.
        Again, I could take the whole 5 minutes because this is so
    deeply personal to me, but two things that I want to, first,
    clarify this idea that graduate debt is a choice. I have to
    push back on that. All I ever wanted to be was a teacher. I
    went to community college, went back and got a bachelor's
    degree. In order to be an entry level teacher and maintain
    Connecticut certification, you have to obtain a master's degree
    within your first 5 years, and then professional certification.
    So, in order for me to get an entry level job, I needed a
    postgraduate degree. So, it is not a choice.
        And then the other thing that, I could feel the energy
    coming off of you when the comment was made that we could find
    other jobs, you know, maybe welding or career training. I was
    told the same thing 15 years ago, and I went and became a
    certified nurse's aide and I worked my way through school. But
    my question then and my question now is exactly the same. Do I
    not get to dream? Do I not get to have aspirations? Do I not
    get to provide a professional future for my children?
        So, I, on purpose, chose professors that would allow me to
    bring my kids to class. You know, I, on purpose, did those
    things. And what I will tell you, Ms. Parker, is that in the
    space of 7 years, I went from being the first person in my
    family to ever graduate from college to being a second-
    generation college-educated family because from my daughter,
    she saw me every day going to school, and it was never an
    option. And she went to college and she, too, is a teacher now.
    So, if you ever question what this means and why it is
    important, your daughter is seeing, through you, what the
    possibility is, and you do get to dream.
        So, my question, I guess, is for Chancellor Morrison-
    Shetlar. When we are talking about eliminating programs, like
    the Federal Supplemental Opportunity Grants, or TRIO, or GEAR
    UP, are those programs directly attacking low-income families,
    in your opinion? Because one of the things I was told when I
    could not get a loan or a grant was to have my mother or my
    family fill out a PLUS Loan or Parent Loan. If I am already
    working three jobs and helping to take care of my family, my
    mother did not have the capacity to fill out a loan on my
    behalf. So, it just perpetuates this idea of generational
    poverty. It says if you already do not have it, you cannot have
    access to it. So, is the elimination of these programs, in your
    opinion, a direct attack on low-income families?
        Ms. MORRISON-SHETLAR. I think that the problem is exactly
    as you mentioned it. Anything that prevents people from being
    able to apply for any aid or support at all is attack on
    student learning and the ability to progress in their careers.
    And that is why I am so proud of what North Carolina's doing in
    terms of capping things, like a 3 percent cap on fees, making
    sure that we have got State investment in the cost of
    attendance for students. So, any program that puts barriers
    toward people applying for support to be educated I think is
    attacking student learning.
        Ms. HAYES. Thank you. And for the remainder of my time, Ms.
    Parker, actually, you figured it out a lot sooner than I did.
    My children were older than Journey when I decide to go to back
    to community college, but I still would have to create
    opportunities for childcare and to bring them to class to do
    different things. What do you think would happen to other
    students if programs like the Child Care Access and childcare
    that currently exists were further eliminated?
        Ms. PARKER. Thank you. First of all, thank you. I think it
    would give us, or I am saying a student parent, the opportunity
    to move forward and progress and, like you said, break through
    generational barriers that have been placed upon us. I think
    that if I know that there is a safe place for my child while I
    am in class, I would have the bandwidth to focus more on what
    my studies are. Thank you.
        Ms. HAYES. Mr. Chairman, I would like to rest my time, or
    no time.
        Chairman SCOTT. Thank you. The gentleman from Wisconsin,
    Mr. Grothman?
        Mr. GROTHMAN. Sure. We have heard that part of the reason
    for the increase in tuition is there is a lessening of
    government support for the schools and they have to make it up
    in tuition, but I think you said that was 30 percent of the
    upper. Tuition has gone up dramatically, though, even without
    that. To what do you attribute that, or how are we spending
    more money today compared to 30 years ago for an equivalent
    degree? Where is that cash going?
        Mr. KVAAL. I will take this. So, the numbers are about 30
    percent is due to State divestment since the year 2000, and
    since the beginning of the Great Recession in 2007, it is about
    41 percent State divestment is responsible for. There are,
    across sectors, many different reasons. I mentioned the
    competition with the private sector salaries, that in order to
    hire a highly trained professor, universities--
        Mr. GROTHMAN. Okay
        Mr. KVAAL [continuing]. have to compare--have to compete
    with the private sector. One thing that is often mentioned is,
    you know, so-called wasteful spending at universities. This is
    really concentrated only among, you know, the universities
    that--you know, the Harvards, the--you know, this amenity
    spending is, you know, concentrated among a small set of
    universities that--
        Mr. GROTHMAN. Harvard is more wasteful than the other
    universities? That is what you are telling us? We should not
    take that waste program versus being typical?
        Mr. KVAAL. I guess what I am saying is that the
    universities that make the--make the New York Times for the
    lazy river, so to speak, educate a very, very small percentage
    of the students in this country and are not all representative
    of where most people are being educated.
        Mr. GROTHMAN. Okay. Kind of give you a followup question
    there. One of the faculty members of my universities, they felt
    that over time, not research personnel, but there had been,
    say, over the last 30, 40 years, a significant increase in
    nonteaching personnel at the universities, and that is why the
    students are being pounded for the side tuition. Has there been
    a significant increase in nonteaching personnel over the last
    40 years?
        Mr. WEBBER. There has, and I would say that there is--you
    know, this is in part, but this is some student-centered
    spending, that, you know, there are services to students that
    are not being offered, necessary services, that are not--that
    are being offered now, that were not being offered, you know,
    decades ago, that helped students, especially middle--first
    generation of students graduate.
        Mr. GROTHMAN. Okay. Question for you. I think there is a
    feeling over time that sometimes people take out more student
    loans than are necessary. I do think it is a good idea to rank
    universities as to how their students are doing on student
    loans, but do you think, if we are going to begin to do that or
    the rankings are going to begin to appear, if we should allow
    the universities themselves some say into how much loans the
    students are taking out? And I think there is a feeling among
    some professionals, and this was true when I went to school,
    like 40 years ago, that sometimes people take out more loans
    then are necessary to a certain extent to support a lifestyle.
    Would you be in favor of universities saying, you would have to
    have the universities sign off before you got a loan?
        Mr. WEBBER. I am very in favor of more accountability, and
    I am also in favor of his proposal.
        Mr. GROTHMAN. Good. That is great. One other thing. We talk
    about, you know, loan--or Pell Grants for, you know, certain
    demographics. Frequently, people from, say, middle class homes
    or kids from married families, they may not be getting a lot
    from their parents, but you could argue, and I have had parents
    complain about this, that some people who live one lifestyle
    are more likely to get grants than people who live another
    lifestyle. Do you think that is perhaps unfair?
        Mr. WEBBER. I--sorry. I do think that is unfair. I think
    that it is easy to focus on anecdotes of, you know, this person
    is getting something that, you know, maybe they ``do not
    deserve.'' I do not think that is representative of the, you
    know, general situations in--
        Mr. GROTHMAN. People getting penalized for getting married,
    for example, that sort of thing, or having married parents? Do
    you think that is unfair? We will ask Ms. Shetlar. Do you think
    that is unfair?
        Ms. MORRISON-SHETLAR. I think individuals come to
    university or college with different backgrounds and different
    support mechanisms. I am first generation and come from a
    modest background, and was grateful for the grants and loans
    that were available to me. And so I think it is hard to paint
    everyone with one brush stroke. I think it is some of an
    individual choice, in some cases, but sometimes a set of
    circumstances occurs.
        Mr. GROTHMAN. So, you are in favor of discrimination or?
        Ms. MORRISON-SHETLAR. I am not in favor of discrimination.
        Mr. GROTHMAN. Okay.
        Chairman SCOTT. The gentleman's time has expired. Thank
    you. The gentleman from California, Mr. Harder?
        Mr. HARDER. Thank you so much, all, for being here on such
    an important subject. Dr. Kvaal, I would love to start with
    you. Can you share with us, once again, what the aggregate
    amount of student debt is now in the United States?
        Mr. KVAAL. $1.5 trillion.
        Mr. HARDER. And I know I have not been here that long. It
    was not that long ago since I was in college myself. When I was
    in college in 2006, do you recall where the aggregate debt was
    then?
        Mr. KVAAL. I do not, but it was substantially less than $1
    trillion.
        Mr. HARDER. I think it was around about $500 billion. Does
    that sound about right?
        Mr. KVAAL. It does.
        Mr. HARDER. So, in other words, in the last 10 years, since
    I got out of school, the aggregated amount of student debt in
    this country has tripled in the last 10 years? Is that fair?
        Mr. KVAAL. Yes.
        Mr. HARDER. And while we have done that, I think it is
    interesting to note that we have also been disinvesting at the
    same time in some of the Federal support services that are
    really critical. So, in 1980, my belief is there--my
    understanding is that the Pell Grant covered--the maximum Pell
    Grant was about 76 percent of the cost of attendance for a 4-
    year school, about 76 percent in 1980, is that--
        Mr. KVAAL. Yes.
        Mr. HARDER [continuing]. around correct? Do you know where
    it is today?
        Mr. KVAAL. It is about a quarter.
        Mr. HARDER. Got it. So, in other words, the amount of
    student debt has tripled over the last 10 years, and over the
    last 30 years or so, we have gone from, about 40 years, we have
    gone from about 76 percent of the cost of attendance of a Pell
    grant, has slipped to about a quarter?
        Mr. KVAAL. That is right.
        Mr. HARDER. Is that fair?
        Mr. KVAAL. That is right.
        Mr. HARDER. And I would love to get the student perspective
    on this as well, Ms. Parker, and thank you so much for being
    here. It is interesting, day today, because we are about 24
    hours after a, you know, real scandal in higher education,
    where we have seen, I think, a renewed sense of the inequality
    in our higher education system. To your belief, did your
    parents bribe any school administrators or coaches to get you
    in to school?
        Ms. PARKER. No.
        Mr. HARDER. Are you sure there is no, like, endowed
    building, a couple million dollars that helped get you into
    Franklin?
        Ms. PARKER. I guarantee there is none.
        Mr. HARDER. There is not in my alma meter either. And what
    did you study when you were in school?
        Ms. PARKER. This most recent time?
        Mr. HARDER. Yes.
        Ms. PARKER. Human resource management.
        Mr. HARDER. And before you decided to study that, did you
    have access to reliable data that told you this is what you are
    going to make after 4 years of a program of study?
        Ms. PARKER. If I had access to the data, it was not
    something that I had background knowledge of knowing to do.
        Mr. HARDER. Got it. Would that have been helpful in making
    a decision about what to study?
        Ms. PARKER. Yes.
        Mr. HARDER. And, Mr. Kvaal, would you agree that students
    today applying to college do not necessarily have the
    information that they need to enroll in school?
        Mr. KVAAL. Yes.
        Mr. HARDER. And what is your sense of sort of the
    fragmentation of our information in the transparency that we
    give to students and parents in making what is one the most
    important financial decision of their life? How is that?
        Mr. KVAAL. Woefully inadequate.
        Mr. HARDER. Why do you think that is?
        Mr. KVAAL. Well, one reason is the Department of Education
    is prohibited from collecting data on students who do not
    receive student aid, which is about 30 percent of students, and
    so we only know what we make colleges report to us. We do not
    know how well students succeed after they transfer or they
    articulate to a different program. We only have limited insight
    into how well they do in the work force, and so there are a lot
    of really critical questions that just cannot be answered by a
    student deciding where to enroll right now.
        Mr. HARDER. And I used to teach community college, I taught
    Business 101, how to write a business plan, start a company, at
    Modesto Junior College, in my community. What about community
    college students? You mentioned 4-year students. What access to
    information do you have if you are doing a 2-year degree?
        Mr. KVAAL. Well, it varies by State, but, again, it is hard
    to know whether our 2-year college graduate will go on to earn
    a 4-year college degree, or how likely that is. Again, access
    to labor market data for those earning occupational degrees is
    hard to come by, very rare at a program level, which is really
    what you want, and rare to get disaggregated by student
    characteristics.
        Mr. HARDER. And so, is there any Federal standard that sort
    of standardizes the amount of information that students have
    when they are getting a 2-year--when their 2-year degree, or
    even a set of standards to know, you know, what are the college
    graduation rates at one university versus--or one 2-year degree
    or 4-year degree as opposed to another? Is there any sort of
    standardization in that? So, you sort of--as you are making one
    of the most important financial and lifelong decisions, you
    have sort of a good understanding where you get the most bang
    for your buck?
        Mr. KVAAL. There is--the Department of Education operates
    what is called the College Score Card. Again, though it is
    limited in the data that it has. So you mentioned graduation
    rates, and what the department measures is students enrolling
    for the first time as full-time students, and so the success of
    many students, like Ms. Parker, would not be in captured in
    those statistics.
        Mr. HARDER. So, in other words, we really have two problems
    going here. One is we have the cost of education that has been
    skyrocketing while we have been disinvesting in higher
    education, and the second is there is no information. This is
    why I am actually sponsoring a bill that tries to make sure
    that we are standardizing some of these decisions, and I look
    forward to working across the aisle with some colleagues to
    meet that reality.
        Thank you so much, and I yield back my time.
        Chairman SCOTT. Thank you. The gentleman from Pennsylvania,
    Mr. Meuser.
        Mr. MEUSER. Thank you, Chairman Scott and Dr. Foxx, for
    holding a hearing on this extremely important issue of college
    affordability. Thank you to all of our witnesses, very much,
    for taking the time to share your expertise with this
    committee.
        As we have heard this morning, tuition fees at our
    institutions of higher education are rising well over the
    inflation rate, by at least 3 percentage points, and it is
    almost an automatic increase virtually every year, and most
    institutions that cost goes up, and this has been happening for
    20 years at least, maybe more. Despite the vast number and
    growing number of job openings in our economy, we have a skills
    gap that must be addressed, and yet our costs continue to soar.
        The average cost of attending a private 4-year institution
    or 4-year university is $50,000. So, I will start with the
    $50,000 question, if you will, or in actually in Ms. Parker's
    case, the $66,000 question. What is being done to rein in these
    costs? I know some of this has been addressed. What is being
    done to truly provide a value or a return on the investment,
    lowering costs, best education, appropriate and effective job
    placement by these institutions, by these schools?
        Dr. Webber, I will ask you.
        Mr. WEBBER. Thank you for the question. One of the biggest
    things that I can say, at Temple University, first, is an
    initiative called Fly in 4, which is trying to keep students on
    track to graduate in a reasonable timeframe. And if it--if they
    take longer than the 4 years, but they have met certain
    performance goals, then their--they will not have to pay for
    classes after this point as long as they have been, you know,
    meeting certain benchmarks.
        In terms of the, you know, job placement, I think that the
    best place for, you know, colleges of all types to invest in is
    internship programs, that they have returns to a strong career
    placement and internship program are very, very large. And I
    can say that, you know, in my college, there has been a strong
    push toward making partnerships with businesses in the local
    community and really investing in this.
        Mr. MEUSER. Great. I am certainly a fan of Temple
    University, and I really hear some great things, and I think
    your applications rate are a reflection of that. So go out--
        Mr. WEBBER. I am a big fan as well--
        Mr. MEUSER [continuing]. so go Owls. All right, very good.
    Dr. Akers, another university that does very well is Purdue
    University. Mitch Daniels has done some remarkable things there
    and his staff, lowering costs, just making the school more
    attractive and definitely delivering on job placement. Are
    other schools following this model, and maybe you could comment
    on that?
        Ms. AKERS. Sure. So, one of the innovations I am
    particularly interested in, that McShane Analysis brought to
    Purdue, is the Back a Boiler Program, which is their college-
    specific income share agreement. What that does, in the case of
    Purdue, is takes university funds and basically invests in
    students. So, the institution is putting their own finances at
    risk and aligning the incentives, so that when their students
    succeed, they succeed as an institution. We have seen--they
    were the first to start a program like that.
        We have seen other traditional institutions following suit
    and creating income share agreements as well. The University of
    Utah was second, the most recent large university to go in that
    direction. Purdue is also leader in their recent action of
    acquiring Kaplan, in that they are of--a dramatic expansion of
    their online education program. I think this is a space where
    traditional institutions have underutilized the potential for
    technology to lower the cost of their provision of education.
    So, I am hoping that we will see other schools following suit
    in that area, as well.
        Mr. MEUSER. All right, terrific. Thank you. And Dr.
    Morrison-Shetlar, I just want to focus on vocational skill
    learning, as well as the filling the jobs gap that exists. Now,
    you mentioned in your written testimony the importance of
    vocational and career education. What sort of resources, what
    percentage of resources go toward your technical end of your
    school, and do the students receive the same level of student
    loans for vocational skills?
        Ms. MORRISON-SHETLAR. The NC Promise Program makes sure
    that every degree that a student wants to pursue is affordable,
    and that means reduction in tuition, particularly, for in-State
    students to $500. The other things that we have done in terms
    of making sure that the students leave with less debt, for
    example, is that with that reduction in tuition, this is about
    $3,000 savings per year for our in-State students. The other
    things that we have done, we have had a 3 percent cap on our
    fees, so per year, so that those fees do not keep increasing,
    as you mentioned. And I think that is really important to say,
    and across the system we have an eight-semester fixed tuition
    program. And so when people are coming in to get a degree,
    whatever kind of degree they are getting, they are getting the
    skills that they need.
        It was previously mentioned by my colleague here,
    internship programs, experiential learning opportunities, which
    allow anyone who are in any field of education to be able to
    show, while their getting their degree, that they have the
    skills that they need to be successful. We are also seeing that
    our students are getting jobs based on the experiences that
    they are getting. And so with--the cost perspective of the
    State of North Carolina is decreasing the cost for students, so
    that they can then get the experiences they need, get the jobs
    that they need when they graduate, and give back to the
    economy.
        Mr. MEUSER. Thank you. Thank you, Mr. Chairman.
        Chairman SCOTT. The gentlemen's time has expired. The
    gentlelady from Georgia, Ms. McBath?
        Mrs. MCBATH. Thank you, Mr. Chairman. And before I begin
    asking my questions, I would like to echo my colleague, Mr.
    Harder's, comments, but first by responding to the references
    made about the need to reduce administrative burden on
    colleges. It is important to keep in mind that Federal
    regulation and oversight provides vital protections for our
    students. This is particularly important for low-income
    students and students of color, who are more likely to be
    burdened by unmanageable debt and to be victims of fraud and
    abuse by unscrupulous institutions.
        There are, however, some bipartisan proposals for reducing
    compliance costs, such as the College Transparency Act. This
    bill would lift the ban on the collection of student level data
    and make it easier for colleges to satisfy their reporting
    requirements. The College Transparency Act would also provide
    students and families with better information on the
    educational and work force outcomes, which gets at some of the
    problems about transparency that were raised earlier today.
        It is true that the demographics of postsecondary students
    are more diverse today than ever before. More women are
    attending and graduating from college than men. In Georgia, the
    State which I represent, 59 percent of college students are
    women. Across the country, we are also seeing increases in the
    number of students of color and students with a disability
    attending college. These trends are very, very exciting, but we
    still have so much more to do to address the systemic
    inequalities that still exist today. Low-income students and
    students of color are disproportionately affected by the costs
    of education and the lack of available funding, resulting in
    lower rates of matriculation, retention, and graduation.
        In Georgia, and across the country, most Americans will
    need to attain a postsecondary degree to achieve or maintain a
    middle-class income. In fact, by 2020, 65 percent of the jobs
    in my State alone will require some level of higher education,
    specifically 22 percent will require a bachelor's degree. If a
    college degree continues to be the surest path to economic
    mobility in our society, we need to make sure that everyone has
    the resources, especially financial resources that they need.
    That is why it is critical for us to invest in Pell Grants.
        In Georgia's Sixth congressional District, over 6,000
    students received Pell Grants for the 2018 and 2019 school
    year, totaling nearly $30 million. And for the State of
    Georgia, more than 20--excuse me, more than 230,000 Pell Grants
    were awarded to students. This brings the total for the State
    to just over $900 million.
        Now, I am proud to say that Georgia State University, an
    institution with campuses in my district, is one of the many
    institutions in Georgia to make great strides to narrow the
    funding gap for low-income and first-generation students. At
    Georgia State, 51 percent of the students are receiving Pell
    Grants.
        However, for first-generation college students, navigating
    the financial burdens is not the only obstacle that they face.
    Students face a culture shift from the comfort of their
    hometowns and neighborhoods to an environment where many
    students may not look like them, come from the same background,
    or belong to the same socioeconomic class. When we talk about
    higher education, we need to keep those challenges in mind, and
    I want us also to think beyond tuition costs when talking about
    completing a college degree. We speak of mental health in K
    through 12 schooling, but what happens once those students move
    on to postsecondary education? What happens to those students
    who receive free or reduced lunch? It is one thing to get a
    student to college, it is another thing to get them through
    college. As we begin these conversations, I hope we will
    consider the funding needed to help those students navigate
    their college experience.
        An accessible, affordable education is crucial to the
    advancement of our society and to the future and wellbeing of
    people that we are here to represent. We cannot expect greater
    returns on our society unless we are willing to invest more in
    our schools and the future of our country, our students. Today,
    students are more diverse than ever before, and I am thrilled
    to see so many first-generation college students, like Ms.
    Parker, blazing the trail as the first in their families to
    attend college.
        Ms. Parker, as you said, balancing multiple priorities can
    be exhausting and very stressful. We know that mental health
    supports are critical for students on our college campuses. Can
    you please talk a little bit more about anything that has
    helped you manage your stress level while going to school and,
    also, what more do you think that we, this body, can do to
    address mental health on college campuses?
        Ms. PARKER. Thank you. Last year, I attended counseling
    services through Columbus State's campus and, I guess, coming
    from my community, mental health is not something that is
    addressed regularly. So, once I realized--like, once I found
    out about the counseling services, what they offered, I was,
    like--the first session I did not understand why I was there,
    but I was, like, I guess that might be good for me. But
    throughout the time, I realized how much I needed to--how much
    I needed that counseling. All the things that I had been going
    through over the years of trying to make my way through
    college, how that was burdensome to me. I think mental health--
    it should be a conversation that, on college campuses, that is
    a normal conversation instead of being stigmatized, and not
    just meant for career services--I am sorry,--counseling
    services, not just meant for that area of the institution. I
    think that is something that should be talked about in advising
    or in TRIO Services because no matter who the student is
    talking to, they see them as an advisor. It does not matter if
    they are a president, if they are in admissions, you know, if
    there is an instructor. There is still a way to connect with
    the student, and they look at you as advisor, as someone that
    they can, you know, lean into. That is--it should be a platform
    of a regular conversation, what mental health is, and how it is
    needed to be able to balance all of what you have going on, the
    student.
        Mrs. MCBATH. Thank you.
        Chairman SCOTT. Thank you, the gentlelady's time has
    expired. The gentleman from Idaho, Mr. Fulcher?
        Mr. FULCHER. Thank you, Mr. Chairman. I was just going to
    raise a topic that I have not heard much about, and just going
    through your testimony I have not seen, and in my home State of
    Idaho, there has been a couple of things that has worked in a
    positive way to drive down the overall impact of cost. One is
    just, is competition. We have got a community college that was
    put in place in close proximity to our largest university and
    since it was put in place, the growth, student growth, has
    exploded there, and the prevailing increase rate of the 4-year
    university greatly slowed down. So, that was one thing.
        The second thing was the implementation of a dual credit
    system, and I was--selfishly, I was a proponent of that at the
    State level, and it has really taken off. And so I would like
    to maybe ask Ms. Parker, just because you have a compelling
    story and the demographic that you grew up in is just different
    than the typical demographic in my home State, and so, first of
    all, just a question for you: if you would have had, or maybe
    you did have, an opportunity to receive college credit while in
    high school, would that have been something that you would have
    pursued in your circumstance?
        Ms. PARKER. I believe in my high school, my senior year is
    when Columbus Day partnered with my high school to offer the
    college credit. One, so, it was my senior year, and I was
    already afraid of college. Going back, knowing what I know now,
    yes, I would have, but I did not take advantage of it at that
    time. But, mind you, I am a first-generation student, so.
        Mr. FULCHER. I understand. That is okay. So, and this
    really could be for anyone, but perhaps I will just ask Dr.
    Webber. Have you seen any other States or any other track
    records where the dual credit system was advantageous or
    helpful in driving down the overall cost of college?
        Mr. WEBBER. Yes, I think so, and my home State of Florida,
    where I grew up, has a robust dual credit system that I took
    advantage of. I had, I think, 12 or 15 credits from, you know,
    my local community college. And the, you know, the general cost
    of college in Florida is--it is one of the lowest in the
    country. So, now, that is--there are other reasons for that, as
    well, but I do think that part of the, you know, the effect is
    a robust dual credit system.
        Mr. FULCHER. Great. Thank you, Mr. Webber.
        Mrs. FOXX. Would the gentleman yield?
        Mr. FULCHER. Yes, I yield my time, Dr. Foxx.
        Mrs. FOXX. No. I am not--I am going to ask you a question--
        Mr. FULCHER. Yes.
        Mrs. FOXX [continuing]. or give you some information.
        Mr. FULCHER. Please.
        Mrs. FOXX. You hit on an issue I wanted to bring up,
    eventually, and I am really pleased, and while you are here, I
    wanted to say it. There is an article that came out February
    10th that says that a student that takes at least one dual
    credit course in high school is three times as likely to
    graduate from college as students who do not take college
    credits courses in high school. The study also had the higher
    first, second, and third year GPAs. So, I want to compliment
    the gentleman on bringing up the issue because it is something
    that is proving to be very, very successful for students. So,
    thank you for bringing up the issue, and I will yield my time
    back to you.
        Mr. FULCHER. Thank you, Doctor.
        Chairman SCOTT. Did the gentlelady want to put that in the
    record?
        Mrs. FOXX. Thank you, Mr. Chairman, I would like to put
    that in the record.
        Chairman SCOTT. Without objection.
        Mr. FULCHER. Thank you, Dr. Foxx. I think the data in our
    home State would validate that, and I yield to Mr. Chairman.
        Chairman SCOTT. The gentleman has yielded back his time.
    The gentleman's time has expired. The gentlelady from
    Washington, Dr. Schrier.
        Dr. SCHRIER. Thank you, Mr. Chairman. First, I would
    reiterate, I agree with my colleagues that we have a Running
    Start Program in Washington State that has been incredibly
    successful. It reduces the cost of college, lets kids get an
    early start. It is, unfortunately, not available so much to
    people in rural areas, but it is a great start.
        We have heard about college tuition rates. Just for
    perspective, I do not think I am that old, but, in the
    eighties, when I went to college, I took a couple classes at a
    community college for $5 a credit. Yes, and I went to UC
    Berkeley for $2,000 a year, and I graduated from medical school
    with about $60,000 of debt, which it pales in comparison to
    anything that students today are facing. I came out with an
    M.D., to pay off the same debt that Ms. Parker now is facing
    without that potential salary earnings.
        And so I have often said that the way we spend our money is
    a reflection of our values, and we have just heard about how
    college education leads to a million dollars more in lifetime
    earnings, leads to a much bigger tax base, and will ultimately
    pay itself off. And I have always felt that an investment in a
    home and in education are the only two good kinds of debt.
        And so I wanted to ask because, Dr. Kvaal, you mentioned,
    ultimately, over time, doubling the amount that we give in Pell
    Grants. I would note that at the University of Washington we
    have about an 80 percent graduation rate for students receiving
    Pell Grants, which I think is phenomenal compared to a lot of
    the numbers we have been hearing. Why not just go for it
    immediately, given what a good investment college education is,
    and the ultimate payoff in tax revenues for our country?
        Mr. KVAAL. Great. I am for it, and, in fact, the studies
    show that investments in Pell pay for themselves in terms of
    increased economic growth, and so it is a very worthwhile--it
    would be a very worthwhile investment for Congress to make.
        Ms. SCHRIER. Thank you. And then I would also just note,
    and then I will yield back my time in a moment, but that the
    costs of college today are so different for a person like me,
    who happened to come from a middle class household and did not
    have huge expenses, and Ms. Parker, who grew up with adversity
    and just--the system is just so rigged. I mean, as we saw
    yesterday, with the wealthy parents paying their way and false
    test scores and everything else to get their kids into college,
    who will have a cakewalk, and would have had a cakewalk either
    way, and Ms. Parker, who has to work and raise a child and get
    through college, that it just is--I do not think I could have
    made it through Berkeley doing what you are doing, and I just
    want to recognize that the cost of college is overwhelming and
    I applaud you for your efforts. I yield back my time to the
    Chairman.
        Chairman SCOTT. Thank you. Let me ask just, you know, one
    question. Maybe Dr. Kvaal, there has been a reference to the
    private income-based repayment plan, where you make a deal with
    a private investor to get a percentage of your income. How do
    those work, and why would anybody prefer that than the Federal
    income-based repayment that we already have?
        Mr. KVAAL. I think there is--thank you for the question,
    Mr. Chairman. I think there is very little reason for any
    student to prefer a private income share agreement to a Federal
    student loan because of the option of income-driven repayment,
    which will be a better option for almost every student, if not
    every student. The Federal Government has lower cost of
    capital. It has economies, a scale in collecting those loans,
    and, as a result, they offer better rates to students than
    private lenders will.
        Chairman SCOTT. Is there any--would the private income
    base--with the public income base repayment, you can just
    decide if you got a real good job, just to pay off the loan and
    be finished with it. Do you have that option with the private
    deals?
        Mr. KVAAL. Not necessarily. Oftentimes, you have to pay
    back several times more than the value that--of your education.
        Chairman SCOTT. Thank you. Yields back. The gentlelady
    yields back the balance of her time.
        Ms. SCHRIER. May I take back the balance of my time?
        Chairman SCOTT. Yes.
        Ms. SCHRIER. I have a letter from the NEA that I would,
    respectfully, request to submit--
        Chairman SCOTT. Okay--
        Ms. SCHRIER [continuing]. and thank you, and I will yield
    back to whoever would like my time.
        Chairman SCOTT. Without objection. Gentleman from South
    Dakota?
        Mr. JOHNSON. Thank you, Mr. Chairman. Ms. Parker, in your
    testimony, because it is just a neat story, I know it has been
    a hard story for you, but it is a neat story to see your
    persistence. And at the end of your written testimony, you note
    that you know the odds are low that Journey and I will ever
    escape poverty, and I just want to echo Ms. Fudge and Dr. Roe
    and others who said you are going to make it. You are going to
    make it. And I know that because I think it is as true now as
    it was when President Coolidge said it, but this is what
    President Coolidge said, ``Nothing in this world can take the
    place of persistence. Talent will not. Nothing is more common
    than unsuccessful men with talent. Genius will not. Unrewarded
    genius is almost a proverb. Education alone will not. The world
    is full of educated derelicts. Persistence and determination
    alone are omnipotent.''
        Ms. Parker, boy, do you have persistence, and you are going
    to make it and Journey is going to make it. And I know that you
    have traveled far, and that there are miles yet to go in your
    journey, but, boy, are you going to make it. And so, through
    that journey, I know you have learned a lot. I have got three
    boys. One of them is 13. You know, he has not really started to
    think about what is going to happen after high school yet, but
    I would love to get you guys connected. Now, he is not here
    today, but if he was, and if he says, Ms. Parker, what advice
    do you have for me, about how--what I can be doing to have a
    successful experience, whether that is related to affordability
    or other measures of student success, what would you tell him,
    ma'am?
        Ms. PARKER. Get connected to as many resources as you can
    because that is my experience. I do not know how to do it
    without it. I do not know any other way, and to always be
    mindful that, just because someone told you that this is the
    way it is, that does not mean that has to be what it is. Ask
    questions and continue to stay persistent.
        Mr. JOHNSON. Ask questions. Boy, that--I think that is very
    well said. I mean, you would need to be your own advocate--
        Ms. PARKER. Right.
        Mr. JOHNSON [continuing]. at times in this system. We have
    talked about how complicated it is to navigate. The system is
    too complicated, but there have been times that you had to be
    your own advocate, I assume?
        Ms. PARKER. Yes, for years.
        Mr. JOHNSON. Mm-hmm.
        Ms. PARKER. Until I have realized now, later in my
    educational journey, that, okay, there should have been a, you
    know, a stepping point, all those years, where I could have
    been caught and helped and guided.
        Mr. JOHNSON. So, there is, you know, we have talked a fair
    amount today, also, about that there is kind of a lack of
    transparency, and it is hard to understand grants versus loans.
    Some of the other panelists talked about that. Part of it is
    also that we are kind of dealing with monopoly money. When
    you're a young person and you are trying to think about paying
    something back over 10 or 20 or more years, it is hard to
    really, really--to really understand the financial impact that
    it can have. Is there a moment, maybe there wasn't, but was
    there moment when you really realized, oh, my gosh, this is
    real money and I owe it?
        Ms. PARKER. I understood that when I was 17 going to the
    University of Toledo. Yet I was only taught to survive. So, it
    was taking out the loans to make basic needs met in order to
    still stay in school. I went to school with no money. Like I
    said, I did not have a comforter for my bed. That was real.
    When I got there, and I arrived and I see all my peers and
    everyone setting up their room. They came, I mean, they had--I
    don't even think they came from money. I knew they had money
    because they had a comforter on their bed. I did not know what
    ``come from money'' meant, until I seen an extensive amount,
    you know?
        Mr. JOHNSON. You talked in your testimony, and I was glad
    you did, about how hard you have worked and how many part-time
    jobs, and at times more than a few of them, and we have also
    heard from other panelists that can sometimes have a negative
    impact on student success. But I have got to think, right now,
    it would be hard for you to make it if you did not--if you were
    not working. Employment is a key part of your success story
    now, I would assume. Is that right?
        Ms. PARKER. Yes. It is an important part of my success
    story, and it also has given me experience. So, although I was
    working all these jobs in, you know, in school, I was--I am
    able to apply the experience that I have worked in all these
    jobs to--is relevant to me now and in my career.
        Mr. JOHNSON. Well, this has been very well said. The
    panelists have done a great job. Ms. Parker, you have done a
    great job, and I think, yes, we do need to talk about what is--
    we do need to have robust conversation about what is the role
    the government in aiding student success and in increasing
    affordability, but you are a great example of somebody who is
    also doing what you can on your end. Hard work, curiosity,
    being your own advocate, being persistent. I mean, there are a
    lot of things that students need to own to be successful, and,
    ma'am, you are owning them.
        Mr. Chairman, if I can, I would like to yield back a little
    time to the ranking member?
        Mrs. FOXX. Mr. Chairman, to be fair, there is not enough
    time to ask a question.
        Chairman SCOTT. Thank you. The gentleman's time has
    expired. Let's see, gentlelady from Florida, Ms. Shalala.
        Ms. SHALALA. Thank you very much, Mr. Chairman. First, I
    would like to introduce into the record a letter from CLASP,
    the Center for Law and Social Policy. To the panel, and I think
    you have done an excellent job, but tuition is more complicated
    than just what the sticker price is because so many of the
    colleges and universities in this country, with probably the
    exception of the for-profit institutions, discount tuition in a
    variety of ways. Sometimes it is a scholarship, sometimes it is
    just offering a lower price, and so it is hard to analyze
    whether tuition alone is the factor. And it seems to me that
    one of the things that we have learned is these wrap around
    services that Ms. Parker has indicated that made a real
    difference for her: access to housing, access to other kinds of
    income and support services, in addition to the fact that she
    took a job. So, could you talk a little about what the actual
    tuition is, and how analysts treat that in relationship to
    student success?
        Mr. WEBBER. So, I think that--you bring up a very good
    point. There is the sticker price of tuition, what it says on
    the website, and I do want to say, this matters. It does deter
    people from who just see the prospect of this, these really big
    numbers with--and they are very reluctant to take out so much
    debt, and that they are not aware of, you know, the financial
    aid that they are actually going to receive, but then, what
    students actually pay. One of the problems is that what they
    actually pay is going to differ from year to year. It is not
    clear what they are going to get from 1 year to the next.
        The, you know, the financial aid packages that there is so
    much fine print that, you know, you might--you know, it expires
    after 4 years or it expires--you lose it if you fall below
    certain thresholds, and it is incredibly complex, and this is a
    real burden to students, I think.
        Ms. SHALALA. Thank you very much. Mr. Kvaal, according to
    research examining nationally representative data on student
    demographics, we found that while academic programs at for-
    profit colleges are more similar to those at public community
    colleges, borrowing patterns for students who attend for-
    profits are more similar to the not-for-profit 4-year colleges.
    It seems like, to me, to mismatch in the types of programs for-
    profits offers in the cost. Have you looked at that
    differential in looking at the cost of college?
        Mr. KVAAL. Yes. You are right. Programs at for-profit
    colleges tend to have much higher tuitions, and they tend to
    have much, much higher percentages of students who borrow.
        Ms. SHALALA. And what about the retention and graduation
    rates?
        Mr. KVAAL. The retention and graduation rates are mixed.
    The for-profit colleges tend to offer shorter programs, but if
    you do it on an apples-to-apples basis, they are very similar
    or, if anything, community colleges have slightly better
    retention rates.
        Ms. SHALALA. Dr. Shetlar, can you talk a little about the
    wraparound services that you provide to students? I mean, you
    talked about very low tuition, and you, obviously, have a large
    number of students that work and go to school at your
    institution. What kinds of services do you provide to support
    students?
        Ms. MORRISON-SHETLAR. Educational supports, obviously, is
    things like advising, and to attain the skills that they need
    to be successful in their degree. Tuition is for--at Western is
    about $3,000 a year--
        Ms. SHALALA. Right--
        Ms. MORRISON-SHETLAR [continuing]. Total cost of
    attendance, with NC Promise is $14,000. So, it is room and
    board, and the other supports, health services that need to be
    in place, that are often the cost, additional costs.
        Ms. SHALALA. Mm-hmm. Thank you very much. Ms. Parker, I
    think you are going to do very well in the future. I would like
    to be helpful. I actually know a lot of H.R. people in Ohio,
    and so if you connect up with me after this hearing, I would be
    happy to provide some introductions to you because I am going
    to make sure you do not end up living in poverty for the rest
    of your life. Thank you. I yield back my time.
        Chairman SCOTT. The lady's time was expired. The gentleman
    from Virginia, Mr. Cline?
        Mr. CLINE. Thank you, Mr. Chairman. The cost of higher
    education has unjustifiably run rampant in recent years, and
    the overall cost of college is increasing as a result of many
    underwritten factors, including administrative costs. While
    some of my colleagues claim that college can and should be
    free, the fact is college can never truly be free. Costs are
    simply masked.
        That being said, students should have the option to attend
    an institution that prepares and enables them to be
    contributing members of society. The problem with accessibility
    is two-fold, which includes both the access for students to
    attend, and their success and completion while at college. You
    should not reach a point at which the cost of education is
    entirely prohibitive, but recognizing that as just as
    accessibility is important, so are graduation rates.
        So, Mr. Webber, I would ask you, in your testimony you
    State that only 60 percent of students at 4-year schools will
    earn a degree within 6 years of initial enrollment. With more
    and more resources at schools being devoted to administrative
    costs, why are we not seeing a higher percentage of graduation?
    And what benefits are they providing, if not contributing to
    student success by ensuring their graduation?
        Mr. WEBBER. Well, one of the issues is doing an apples-to-
    apples comparison. So, over time, at the typical public
    institution, graduation rates have stayed roughly constant, but
    that is despite public institutions educating a much different
    type of student today than 30, 40, 50 years ago. And so, from
    an apples-to-apples comparison, in some sense our graduation
    rates have increased because we are--because they have stayed
    the same, if that makes sense.
        Mr. CLINE. Thank you. Dr. Morrison-Shetlar, I am reading
    your testimony; very interested in NC promise; sounds very
    exciting. How long have you been chancellor, interim
    chancellor?
        Ms. MORRISON-SHETLAR. Just slightly over 1 year.
        Mr. CLINE. And are you familiar with your budgets over the
    last, say, decade? I mean, can you speak to those budgets and
    the increases in your budgets?
        Ms. MORRISON-SHETLAR. To a certain extent, yes.
        Mr. CLINE. Okay. Can you approximate for me how much the
    budget has increased over the past 10 years per year, by
    average?
        Ms. MORRISON-SHETLAR. Let me ask that question. I just
    wanted to make sure it was somebody who actually has the
    numbers. So, actually, over the last decade, we have stayed
    relatively the same. What has happened is that we have had a
    decrease in sort of capital expenditures or the ability to
    invest in our current capital, and that is changing. With NC
    Promise, we are beginning to see folks look at the cost of
    attendance at the university, and to make sure that we have the
    budget that we need to be able educate a growing population.
        Mr. CLINE. That is not the answer I expected, so I want to
    commend you for keeping your budgets under control. And given
    that you have seen such a spike in enrollment, can you speak to
    other ways in which you, as a higher education institution,
    have managed to control costs on your own? Because from my
    perspective, and I have a lot of different colleges and
    universities in my district, they see continuing pressures on
    their costs, and because your university is getting so much
    support from the State to keep your tuition fixed and low, I
    was curious whether or not you all were making it a goal to
    actually control costs. And so can you speak to those?
        Ms. MORRISON-SHETLAR. Mm-hmm. Most definitely, I have
    mentioned this previously, but one of the things that the NC
    Promise is doing is helping us with retention, and so having
    our students be able to stay on at the university is reducing
    their cost, total cost of education.
        Mr. CLINE. Not their costs, your costs.
        Ms. MORRISON-SHETLAR. Right, my cost. So, one of the things
    that the--again, the system is doing is capped fees, and so
    that we cannot go above 3 percent in terms of increasing our
    fees. So, what we have to do--
        Mr. CLINE. Right.
        Ms. MORRISON-SHETLAR [continuing]. if we are not getting
    that, those additional funds, then we are looking at
    reallocating to make sure that we are focusing. Western
    Carolina University does not do everything. It does specific
    things really well, and so, in past years, prior to my time
    coming to Western Carolina, we looked at program
    prioritization. What are the kinds of programs that we are
    doing? Is it the right programs for our region? And if it is
    not, then are we getting--eliminating those programs and
    focusing our resources in other areas? The other things that we
    do--a reallocation of resources is always the key to this. If
    you do not have the money, what are your priorities and the
    values of your institution? You know, follow the money.
        And so, we have a very strong strategic plan that has a
    focus on success, student success, time to graduation,
    retention, and we make sure our resources follow those values,
    those metrics, and the issues we are accountable for, so--
        Mr. CLINE. Thank you very much.
        Ms. MORRISON-SHETLAR [continuing]. reallocation.
        Mr. CLINE. Great. Thank you, Mr. Chairman. I yield back.
        Chairman SCOTT. Thank you. The gentleman from Michigan, Mr.
    Levin?
        Mr. LEVIN. Thank you. Mr. Chairman, I would like to submit
    into the record two letters highlighting the critical
    importance of the Public Service Loan Forgiveness Program; one,
    from the American Federation of Teachers, and the other from
    127 national and State animal health science professional
    membership organizations.
        Chairman SCOTT. Without objection.
        Mr. LEVIN. Thank you. Mr. Chairman, I believe strongly that
    restoring the middle-class means we must stop shortchanging our
    students. All students in our country deserve a high-quality
    education that helps them reach their full potentials, and we
    must invest in higher educations, so students, like Ms. Parker,
    are not buried in debt when they graduate.
        I also believe strongly in loan forgiveness for those who
    make the financial sacrifice to use their skills in public
    service, such as working as teachers, firefighters, public
    defenders, nurses, or members of the military. The PSLF, or the
    Public Service Loan Forgiveness Program, created with
    bipartisan support in 2007, offers loan forgiveness to
    individuals after they work in public service careers for 10
    years. The program was designed to ensure that talented
    individuals, including teachers, service members, and veterans,
    can pursue careers in public service, even if they take out
    loans to obtain a degree.
        Dr. Kvaal, I would like to ask you a question. I think we
    worked together in previous lives. It is good to see you again.
    What would eliminating the PSLF Program do to diversity of the
    public sector work force? Would it make it harder for
    underrepresented groups to pursue careers in teaching, in
    nursing, and the like?
        Mr. KVAAL. It would. We know low-income students and
    students of color are more likely to borrow, and they borrow
    more, and so it would make those career choices more
    challenging for them.
        Mr. LEVIN. And how would eliminating this program make it
    harder for low-income individuals, in particular, to pursue
    careers in public service?
        Mr. KVAAL. Well, we know student debt is an obstacle for
    our students making their career choices, and students with
    higher debts are less likely to choose low paid careers,
    including public service careers.
        Mr. LEVIN. Thank you. Today's college students often
    struggle to find adequate, affordable housing options near
    their campus. In fact, researchers believe that the population
    of homeless students in higher education is close to 1.5
    million. Furthermore, a recent GAO report examining college
    student hunger found that low-income students, first-generation
    students, and single parents are at greater risk of being food
    insecure.
        Ms. Parker, I was so moved by your story of struggling to
    find housing with--for you and Journey. Thank you for sharing
    this experience, and I am inspired by how you have overcome
    that difficult time in your life. Can you tell us a little more
    about what difference the stable housing that you found has
    made for you, and can you expand more on how you were able to
    find stable housing?
        Ms. PARKER. Thank you. I was able to find the housing
    through our advising. We have special circumstances advising at
    Columbus State, and they directed me in the direction of
    Scholar House, and--
        Mr. LEVIN. And what is Scholar House?
        Ms. PARKER. Okay.
        Mr. LEVIN. Who stays--who lives there?
        Ms. PARKER. Student parents. So, it is a community of
    student parents, and they provide programming for us. So, we
    have things for, like, mentoring, coaching, financial literacy,
    programming offered to us, that is like a requirement. And it
    is a partnership between CHMA Metro--I am sorry, Columbus
    Metropolitan Housing Authority and Community Properties of
    Ohio. It is a Section 8 voucher to allow us to have it at a
    loan.
        Mr. LEVIN. So, it is sort of a cooperative program of
    different--
        Ms. PARKER. Yes.
        Mr. LEVIN [continuing]. agencies working together to make
    sure--
        Ms. PARKER. Yes.
        Mr. LEVIN [continuing]. people can get housing?
        Ms. PARKER. Exactly.
        Mr. LEVIN. Thank you very much. I think we need more of
    that, not less. A part of the President's budget was released
    this week, where the administration recommends eliminating
    subsidized undergraduate student loans. Republicans have also
    proposed eliminating subsidized loans. Currently, undergraduate
    students can receive subsidized loans allocated based on
    financial need, which do not accrue interest while they are in
    school.
        Dr. Kvaal, how would eliminating subsidized loans for
    undergraduates affect students, and does this help make college
    more accessible and affordable?
        Mr. KVAAL. The President's proposal would use those funds
    to reduce the deficit. It would raise costs by thousands of
    dollars for many of students over the life of their loans, and
    it would not make college more affordable.
        Mr. LEVIN. Finally, let me ask you a clarifying question,
    to you, Dr. Webber. There were some proposals offered by the
    minority about limiting borrowing among certain students to
    reduce debt loads. Do you believe debt loads, particularly
    among low-income students, are the result of frivolous or
    unnecessary spending or are they a reflection of rising prices
    and insufficient grant aid?
        Mr. WEBBER. I absolutely believe they are the latter, the
    rising prices and insufficient debt aid. I think there are very
    limited circumstances where, you know, some students, you know,
    maybe because of lack of financial counseling, do borrow too
    much, and so I think that schools should, you know, have more
    flexibility to, you know, to be able to counsel those students.
        Mr. LEVIN. More advising and counseling, rather than
    limiting the amount they can borrow if they need it?
        Mr. KVAAL. Exactly.
        Mr. LEVIN. Okay. All right, my time has expired. Thank you
    all so much. It is really an important subject.
        Chairman SCOTT. Thank you. The gentleman from Maryland, Mr.
    Trone?
        Mr. TRONE. I thank you all for being here this long day. It
    is nearing the end.
        Ms. Parker, I commend you for your phenomenal hard work and
    perseverance and you are, absolutely, going to be successful,
    and you will knock it out of the park. Just keep at it. My
    question is, we have been looking at a higher education and a
    education system that really has not changed much in the last
    100 and almost 50 years. We have been a K through 12 system,
    and then we have a 2-year or a 4-year college. You know,
    everything else has changed in 150 years. I mean, our students
    have changed. Their interests have changed. Where they would go
    to graduate school, that has all changed.
        What has changed? The type of jobs they are going to get
    has changed. The way we communicate, knowledge has changed. I
    would like to get some people's thoughts about is this system
    just yesterday's system and something that we just keep going
    with because it is there, or should we be trying to move to
    something more like a Pre-K through 14, that is 100 percent
    free, covers all those wraparounds, we cost--that we talked
    about a while ago. And who in the--what State has done the best
    practice in this area that could be something that we could
    learn from and emulate? Let us start with Dr. Morrison-Shetlar.
        Ms. MORRISON-SHETLAR. I think the comment about free is
    always difficult to determine. One of the things that NC
    Promise does is a little different from others, is that it is
    the first dollar, and so the students come and they know what
    their tuition is going to be. They know what their other costs
    are going to be, and then they can apply other loans and grants
    to that. So, I think making this a process that is more
    transparent, making a process that is more accessible,
    particularly for low-income or first-generation students, would
    be really, really important, and making sure that their
    education is helping our students get the right kind of jobs.
    At Western Carolina University, we do needs assessment in our
    community. What is the kind of--what are the skills that are
    needed?
        What are the kinds of things that would help our economy,
    and are a nimble enough university to be able to say, okay, we
    need to be focusing and growing those particular things. So, I
    think really knowing where--what your circumstances are. We are
    in rural North--Western North Carolina. We know what the needs
    of our community are, and as an institution, we meet those
    needs and we exceed those needs, if we possibly can, but we
    have to be nimble to be able to do that.
        Mr. TRONE. Other thoughts on that?
        Mr. KVAAL. Mr. Trone, if I might? There is an interesting
    experiment happening in Detroit with the Kresge Foundation
    about combining K through 12 schools with 4-year residential
    college. It would be interesting to explore with you.
        Mr. TRONE. How many States actually have a ``free'' first-
    dollar or last-dollar community college, 2-year college?
    Anybody have a number on that?
        Mr. KVAAL. I do not think there is any State that is
    entirely free.
        Mr. TRONE. Tennessee? Nope?
        Mr. KVAAL. Tennessee is covered, in large part, using Pell
    grants. They have a last-dollar scholarship.
        Mr. TRONE. Mm-hmm. Okay. Let us talk about work force a
    minute. We support, you know, there is a lot of ideas in
    innovation, promoting multiple pathways to students to learn,
    and success in the workplace. At the end of the day, that is
    what they are looking for, success in the workplace, in the
    job. And sometimes these programs do not actually prepare
    people adequately, but what kind of safeguards do we need if we
    are spending Federal financial aid dollars to folks to help
    pursue work force focus programs? Are students able to use
    their Federal financial aid to help in these work force
    programs?
        Mr. KVAAL. In many cases, students are able to choose
    degrees or certificates offered by community colleges or trade
    schools that have direct occupational value. In order to get a
    Pell Grant, you must be attending a program at least the length
    of a traditional academic semester, which is 15 weeks. There
    are some proposals to allow shorter term programs to receive
    Pell Grants. Those programs may not necessarily be offered for
    academic credit. They may not necessarily be accredited. And so
    my view is those--there are a lot of those programs that are
    high in quality and that are worthy of support, but we do need
    to be careful, not just the types of programs that meet those
    criteria today, but the types of criteria that--programs that
    might be created to meet those criteria?
        Mr. TRONE. Okay. Thank you.
        Chairman SCOTT. Thank you. The gentleman's time has almost
    expired. Thank you. The gentlelady from North Carolina is
    Ranking Member Dr. Foxx.
        Mrs. FOXX. Thank you, Mr. Chairman. First, Ms. Parker, I
    want to congratulate you on getting your associate's degree,
    and on continuing your education. I will tell you that I was
    very, very poor growing up, but I worked my way through
    college. It took me 7 years, and I had a family, and so I want
    to encourage you, as other people have, to continue to do what
    you do because getting your degree, I hope, will be worthwhile
    for you. It has certainly been for me, and so I commend you for
    continuing to do what you are doing.
        Dr. Akers, I want to go back to the issue of the Public
    Service Loan Forgiveness Programs, and in your testimony, you
    mentioned that it is estimated it cost $24 billion over the
    next 10 years. Could you give a few examples of how the PSLF is
    inequitable and poorly designed?
        Ms. AKERS. Sure. So, I have no objection to subsidizing
    employment in careers that serve the public good and that are
    undersubscribed with the market wages that exist in them, but I
    firmly believe that the Student Lending Program is the wrong
    place to provide those subsidies. It is sort of an obvious
    example of where there is inequity, is you could imagine two
    nurses working in a nonprofit hospital system. One of them went
    to college and had the experience that Ms. Parker talked about
    with pizza and partying in dorms, and then the other, you know,
    scrimped and saved to have the low-cost experience. The
    individual who has high amount of debt will have their loans
    forgiven, essentially receiving a very large subsidy of
    taxpayer dollars, while the person who was more careful with
    their spending does not receive the subsidy. I would much
    prefer if we just choose to support particular professions that
    those subsides be delivered through something, like a tax
    credit, that motivates all individuals to enter that
    profession, rather than just those who have spent large sums on
    their education.
        Mrs. FOXX. Well, thank you for that example. I think, of
    course, what Ms. Parker said, her idea, before she went to
    college, was that is was a vacation, and I think many people
    see that the taxpayers are subsidizing those kinds of students
    who going to college to be on vacation and not having the kind
    of seriousness that other students have, and I think your
    example is an excellent one.
        Dr. Morrison-Shetlar, thank you for coming to Washington to
    testify about the wonderful things that are going on at Western
    Carolina and other places in North Carolina. I think talking
    about the Carolina Promise, talking about the programs that you
    all have, where students can transfer from community college
    and make sure that their credits transfer into their degree
    programs, I happen to think North Carolina is doing a lot of
    good things in that regard. Dual enrollment in high school that
    costs absolutely nothing, and that is, by the way, all
    throughout the State. I know you were a little unsure about how
    to answer that question before, but it has been going on a long
    time before I was involved, and before Ms. Adams and I were
    both in the General Assembly, that program started. So, it has
    been going on a long time, and it has been very successful, but
    I know improving the economic mobility of your students is an
    important value to you, and you eluded to that. Could you share
    with us what you are doing on campus to work with businesses
    and industry to make the transition from college graduate to
    employee seamless for your students?
        Ms. MORRISON-SHETLAR. We have a very robust career and
    professional development service for our students that allows
    us to find businesses and industries in our area that are
    interested in taking our students before they graduate, so that
    they are eligible for getting the experiences that Ms. Parker
    talked about, as she did in her work experience. These are
    really important connections to be made, and we live in an area
    where the businesses and the industries are very supportive of
    our student success. And a high percentage of our students,
    when they do these internships or practicums, end up being
    employed by those businesses and industries and, therefore, as
    I mentioned earlier, stay in the area and contribute back to
    the economy.
        Mrs. FOXX. Thank you very much. And, Dr. Webber, I want to
    say, again, a special thank you for being here today, and for
    the written testimony that you provided, which is very, very
    helpful to us. And, Dr. Kvaal, thank you, and, again, Ms.
    Parker, thank you so much for coming and sharing your
    experiences.
        Thank you, Mr. Chairman, I yield back.
        Chairman SCOTT. Thank you. The gentlelady from Nevada, Ms.
    Lee.
        Ms. LEE. Thank you, Mr. Chairman, and I want to thank all
    of you for being here today. As one of eight children, I was
    able to put myself through college with a smorgasbord of help,
    whether it was the Perkins Loans, the Pell Grants, student work
    study, and that was significantly important to me. But we are
    finding more and more that students are not having that same
    opportunity, and, in fact, research from the Brookings
    Institute predicts that by 2023, nearly 40 percent of borrowers
    may default on their loans. So, to me, this indicates that we
    do have a student loan default crisis, which is a much bigger
    crisis for minority and low-income students, particularly those
    who attend for-profit colleges. The study finds that default
    for student at for-profit schools is almost four times that of
    those that attend community colleges. We also know that black
    students are three times more likely to enroll in for-profit
    colleges than their peers, and students at the bottom quartile
    are twice as likely to enroll at for-profit colleges than
    students in the top.
        Mr. Kvaal, I wanted to ask you, given these statistics, can
    you explain why students who attend for-profit institutions are
    at greater risk of default?
        Mr. KVAAL. For-profit colleges tend to be significantly
    more expensive. They tend to be priced at the level that would
    require you to borrow Federal student loan at the maximum
    level, and they often offer mediocre education or worse. And,
    as a result, we do see a lot of students defaulting or failing
    to make payments on their student loans.
        Ms. LEE. Thank you. You know, you had said earlier that--
    like you said that students that qualify from these for-profit
    colleges, actually may do worse in the labor market than they
    otherwise would do, even if they did not go to school. This
    happens even though the credentials they offer tend to be 30 to
    40 percent more expensive.
        ABC interviewed a young veteran, Brian Babcock, a couple
    years ago, who served our country in Iraq, and his plan was
    policework when he graduated. He used his GI Bill money to
    pursue criminal justice degree at ITT Tech, which we all know
    what happened with that. He heard about the school on a
    commercial. ITT promised him that all police agencies would
    take his credential, and they even helped him fill out the
    student loan application, which lead him to borrow up to
    $70,000. He went on to apply to 20 to 23 police departments, to
    only find out that none of them recognized this degree. We just
    discovered today, and this is a particularly important point in
    Nevada, we have a lot of for-profit universities that have shut
    their doors, 30 in the last 10 years, and we just discovered
    today, that 1,733 GI Bill recipients were affected by the most
    recent closures of the Dream Education Schools, of which one is
    in my district alone. Can you explain, more specifically, speak
    to why minority students and veterans tend to be the target of
    these predatory recruitment practices by for-profits?
        Mr. KVAAL. I think in many cases, students do not have
    experience with college. They have family members who do not
    have experience with college. We know that for-profit colleges
    engage in very high pressure or sometimes deceptive recruiting
    tactics. In 2010, the GAO sent undercover investigators to for-
    profit colleges. All 15 found misleading statements. Four of
    them found fraudulent statements. The veterans are particularly
    attractive to for-profit colleges because they generate revenue
    outside of what is called the 90-10 Rule, which limits revenue
    to 90 percent of student aid. And so, for all of those reasons,
    you see the practices of for-profit colleges falling
    disproportionately heavily on the communities you mentioned.
        Ms. LEE. Thank you. Real quickly, we are running out of
    time. Any quick suggestions for what the Federal Government can
    do to protect these students?
        Mr. KVAAL. I think it is really important to have
    standards, to make sure that students graduate, can find jobs,
    and can repay their loans. I think it is important to crack
    down on the use of commissioned salespeople, which leads a lot
    of this deceptive information. I would certainly include GI
    benefits and DOD spending in the limitation on the amount of
    Federal funds that these for-profit colleges conclude. And I
    think that students who are defrauded should have a right to
    get their loans forgiven, which is true in theory, but not in
    practice today.
        Ms. LEE. Right. Thank you very much. Thank you all.
        Chairman SCOTT. Thank you. The gentlelady from
    Massachusetts, Ms. Trahan?
        Ms. TRAHAN. Thank you, Mr. Chairman, and thank you for
    having this hearing. It is so important to all of us. You know,
    I was born and raised in a working-class family, in Lowell. I
    was one of four girls and attended public schools my entire
    life. You know, if not for a volleyball scholarship, I would
    not have gone to the college that I had gone to, and so I am so
    uniquely aware of the anxiety that goes around education and
    funding your own education. You know the school--school tuition
    had a high sticker price then, but I think what is more
    alarming to me is that in the last 25 years, I have seen that
    sticker price increase 3X, 3X in 25 years.
        So, Mr. Kvaal, you know, I looked at your--the student debt
    report that TCEA put out last September, and more than 200,000
    colleges granting bachelor's degrees carried an average debt of
    more than $35,000. I mean, today, we heard Ms. Parker's
    testimony and your $66,000 debt. I just want to ask a couple of
    basic, you know, questions on this because it would be--and I
    think it is helpful for us to know what the major drivers are
    for these tuition increases.
        Mr. KVAAL. Well, for most students, three-quarters of
    students go to public institutions, and for those students the
    single biggest driver has been declining State support over the
    last few decades.
        Ms. TRAHAN. Yep, but--so that is fair. I have got three
    stepsons. I have toured lots of college campuses in the last 10
    years, and I have also seen a bit of an amenities arms race,
    whether it is the dorms, the cafeterias, the gyms. And I am
    wondering if you could speak to the--has the quality of
    education or the job readiness, not just the student
    experience, has it risen as a result of these tuition hikes?
        Mr. KVAAL. Well, I think, in part, colleges do have a
    challenge because they employ highly educated work force. It is
    highly paid. It is difficult to become more productive, like
    other parts of the economy because you cannot have more than 20
    students in a seminar without the seminar getting worse. I also
    think many of our colleges are chasing prestige in a way that
    is measured by the U.S. News and World Report, for example,
    which measures academic quality by the amounts institutions
    spend, not the amount students learn, and we do not value
    community colleges and regional universities that are inclusive
    and affordable and higher in quality.
        Ms. TRAHAN. Great. That is helpful. And you mentioned, I
    think you are the only one in your testimony who sort of used
    the word ``accountability.'' What accountability measures
    should we employ to make sure that our young people, frankly,
    get the return on their huge investment?
        Mr. KVAAL. Well, the most basic question, I think, for
    Federal policymakers is, can students repay their loans? We
    have had the cohort default rate and statue for 30 years. It
    has long been bipartisan, widely accepted. It is no longer very
    effective at driving down student loan defaults. So, there is
    series of reforms you could make to revitalize the student loan
    default rate. I think there are other things that are worthy in
    other areas. For example, the Gainful Employment Rules apply to
    occupational programs, often at for-profit colleges, and look
    at typical debts relative to expected earnings.
        Ms. TRAHAN. Great. Thank you. I am going to switch gears
    because I still have a little bit of time left. So, we heard
    from Ms. Parker's testimony that far too many students and
    their children, like Journey, are going hungry while you are
    nobly trying to learn and get ahead. The help they need is not
    reaching them. The GAO recently found that of the 3.3 million
    students, and I think this was referenced earlier, who are
    potently eligible for SNAP Benefits in 2016, less than half
    said they participated.
        So, Chancellor Morrison-Shetlar, I am wondering if you
    could help with your experience? Is student hunger an issue you
    see at Western Carolina, and if so, what are your
    recommendations for helping students?
        Ms. MORRISON-SHETLAR. Student hunger is definitely
    something that we are seeing in, I think, all of our
    institutions. It is a big issue, and it is something that we at
    Western, and across the system, are really, really conscious
    of, making sure that students get to the resources that they
    need to be able to be successful. Western Carolina University,
    we have collaborated with the Baptist Children's Home to create
    a food bank and resources for our students who are homeless,
    who have issues, and they are referred through sometimes by
    faculty, by staff. That we have really got to get the
    information out to people about the resources that they have
    available to them, as Ms. Parker has mentioned, and I think
    communication is the big issue. We have got to get that
    information out, and it has to be done in a way that is
    compassionate and respectful for the person who is being
    affected because that is one area where if people don't feel
    like they are being valued or respected, they will just leave,
    and so retention will become an issue.
        Ms. TRAHAN. Right. Thank you. I have run out of time, so I
    yield back, but thank you all so much for being here today.
        Chairman SCOTT. The lady's time has expired. The gentlelady
    from Washington, Ms. Jayapal?
        Ms. JAYAPAL. Thank you, Mr. Chairman, and thank you for
    holding these important hearings. Thank you to the panel for
    being here. This has been an issue that has been important to
    me for some years. And I think that, if I am not mistaken, Dr.
    Kvaal, when you were with the Obama Administration and I was
    writing my bill in the State Senate for the Washington Promise
    Act, I believe we worked with you, so thank you for your help
    back then. And we did just in--we have one of the best
    community college systems in the country. We did just in
    Seattle add a 13th year to sort of the K-12 continuum, and so
    we are excited to see how that goes. In Washington State, just
    to echo some of the comments of my colleague that has just
    spoke, we went from the State covering 66 percent of the cost
    of college, public universities in 2008, to now covering only
    35 percent, and we are in a very high, very unaffordable, let's
    put it that way, area in terms of our living costs. So, the
    challenges for students are tremendous. And I want congratulate
    you, Ms. Parker, and all of the students across our country,
    who go to through such challenges.
        Let me start with you, Chancellor, and thank you so much
    for your work on the North Carolina Promise Program. I wanted
    to ask if you could zero in a little bit on what you have found
    around college accessibility and income diversity of your
    students, in particular? Any specific reflections on that
    connection?
        Ms. MORRISON-SHETLAR. The metrics of the UNC System have
    put forward to us as a result of--just affordability and access
    across the system, but then also including NC Promise, is
    really to focus on making sure that low-income students, first-
    generation students have access to a high-quality. affordable
    degree. And, as a result, the NC Promise System chose three
    institutions that allow students less than 150 miles' travel to
    get to college, where they can get a 4-year degree, which means
    that you are basically supporting your community, and that is
    really, really important. And so people coming to Western and
    to Pembroke and to Elizabeth City are people who want to have a
    high-quality education, would not normally have been able to
    afford it, but with NC Promise, that has allowed them to do
    that. So, we are seeing increases in retention and time to
    graduation, even in the fact that we have just been at this for
    a short period of time, but we are seeing, particularly,
    student retention because they are having--they are not having
    the financial impact that they would have had otherwise.
        Ms. JAYAPAL. That is perfect cause my next question was
    going to be around sometimes we separate cost and affordability
    from completion, and in my experience and the students I have
    spoken to, and it has--talked to tens of thousands now across
    Washington State. There is a very direct connection because if
    you do not have the aid, if you have to go out and have a
    second job or a third job, if you cannot afford your textbooks
    or your--a computer now, because everything is--it really
    affects your ability to complete. And so can you speak to that?
    I know it is early, but can you speak to that and perhaps any
    of the other panelists that might want to comment on that
    relationship because they are so often separated? What comments
    do you have around that completion and--?
        Ms. MORRISON-SHETLAR. Well, NC Promise is a first-dollar
    program, and so students know exactly how much it is going to
    cost, with their tuition and their fees, room and board, et
    cetera, and so that knowledge allows planning. That knowledge
    allows seeking other resources to complete that cost of
    attendance, and that is something that I would love to see as
    having a simpler process, a more transparent process, something
    that first-generation students or low-income students can have
    access to and be successful at. That would be a huge game
    changer for the people and the students that you are talking
    about.
        Ms. JAYAPAL. Well, and actually I just want to say before
    asking, if any of you have comments on that, that I actually
    have championed a proposal to invest in a Federal-State
    partnership to make public college, both 4-year and 2-year
    tuition fee free for everybody. And under the plan, the
    government, the Federal Government, would cover two-thirds of
    the cost of eliminating tuitions and fees, and the States would
    cover a third, and I believe that--actually, that is a really
    important cornerstone of higher education authorization,
    reauthorization. But you look like you were going to say
    something, Dr. Webber?
        Mr. WEBBER. Yes. I was just going to say that I think you
    hit the nail right on the head with respect to affordability
    and completion. That, on average, a college degree pays off in
    spades, and this is true for the vast majority of people, but
    risk is really the important thing here, that downside risk.
    You know, the people who are in the single worst position are
    those who are--do not complete, and for them--
        Ms. JAYAPAL. Right.
        Mr. WEBBER [continuing]. college is not affordable.
        Ms. JAYAPAL. Exactly. Dr. Kvaal? I just have a couple
    seconds here.
        Mr. KVAAL. Just to add, we have this idea of college
    students as being upper middle class, temporarily eating Taco
    Bell, and the reality of their lives today are really very
    different, and we need to think about cost of supporting
    children, other family members, emergency expenses. There is a
    whole range of costs that get in the way of completion that we
    do not deal with.
        Ms. JAYAPAL. Thank you so much. I yield back.
        Chairman SCOTT. Thank you. I would recognize myself for a
    couple of questions. I see the votes have been called.
        Mr. Kvaal, you mentioned the problems with the Public
    Service Loan Forgiveness, that it is good in theory, but is
    problematic in reality. Is the problem legislative or
    administrative?
        Mr. KVAAL. Both. I think it would help to simplify the
    types of repayment plans that are eligible for Public Service
    Loan Forgiveness. The types of employment is unclear. It could
    be clarified by the department. It could also be clarified by
    Congress.
        Chairman SCOTT. Are you saying that somebody can be
    working, year after year, thinking they are on a plan, and not
    knowing and you get--after the 10 years, all of a sudden you do
    not get any credit?
        Mr. KVAAL. That is not only hypothetical, that has
    happened.
        Chairman SCOTT. And is that legislative or administrative?
        Mr. KVAAL. There is a mess. In many cases, the department
    has given inaccurate, or its contractors have inaccurate
    information to students, but I think there is an opportunity
    for Congress to fix it.
        Chairman SCOTT. Are you talking about a problem with
    servicers?
        Mr. KVAAL. Yes.
        Chairman SCOTT. Okay, and you mentioned the cost of the
    for-profit colleges is higher than community college for the
    same program. How much higher, is it close?
        Mr. KVAAL. It is many times higher.
        Chairman SCOTT. Many times, like three, four, five times?
        Mr. KVAAL. Three, four, or five times is a fair estimate.
        Chairman SCOTT. Ms. Morrison, you talked about the North
    Carolina Promise, and you also mentioned a significant
    improvement in graduation rates in several colleges. How much
    did the financial assistance contribute to the increased
    graduation rate?
        Ms. MORRISON-SHETLAR. We are early on in the NC Promise,
    and so our 6-year graduation rate at Western, over the last 6
    years, have gone 50 percent to 60 percent. I anticipate that
    with NC Promise we will see an increase in graduation rate. It
    is too early, at this point in time, to say.
        Chairman SCOTT. Is there a limit on how many students can
    participate?
        Ms. MORRISON-SHETLAR. No. Any of the students who are
    enrolled at the three institutions have NC Promise.
        Chairman SCOTT. So, if you can get into the institution,
    you get the rate?
        Ms. MORRISON-SHETLAR. Correct.
        Chairman SCOTT. You do not have to have a minimum grade
    point average to get in?
        Ms. MORRISON-SHETLAR. We have the standards, set by the
    institutions, for entry, and if the student obtains those or
    exceeds those, then they have the possibility of coming to
    those three institutions.
        Chairman SCOTT. Now, has this benefit at these three
    colleges had an adverse effect on enrollment at other colleges?
        Ms. MORRISON-SHETLAR. Not that we have data to show. In
    fact, those institutions who have said that they have had a--
    seen a decrease as a result of NC Promise, the numbers just
    don't jive. We are seeing a 6.6 percent increase. Other
    institutions, 14 and 19 percent increase. So, it is--what we
    are seeing, particularly, was transfer students, as the
    transfer students are coming from the same places that were
    transferring from before. There is just more of them because it
    is a more affordable option.
        Chairman SCOTT. Okay, thank you. And, Ms. Parker, you
    mentioned assistance you got from counselors. How important was
    their advice in making it possible for you to stay and complete
    your degree, and stay in school where you are now?
        Ms. PARKER. Extremely important, sir. Their advice that
    they gave me are coping skills on how to deal with anxiety when
    dealing with things, like finances or worrying about child
    care, or just coping mechanisms, so that I can still stay
    focused, and it was extremely helpful.
        Chairman SCOTT. Do you know how these counselors were paid
    for? Were any of them in a TRIO program, like Student Support
    Services?
        Ms. PARKER. I also have an advisor for the TRIO, in Student
    Services.
        Chairman SCOTT. Has that been helpful?
        Ms. PARKER. Yes, very helpful, connecting me to
    scholarships and resources, guiding me.
        Chairman SCOTT. Thank you. In light of the time, Ranking
    Member, I will complete my questions now and submit others for
    the record. Does the ranking member have closing comments?
        Mrs. FOXX. I do, Mr. Chairman, and, again, in light of the
    time, I will abbreviate my comments. I do want to say that I
    will submit to Dr. Webber a question about a comment he made
    about Temple that I would like to have some clarification on,
    but I will do that.
        Mr. Chairman, I want to, again, commend you for having this
    hearing, and appreciate the opportunity to collaborate with you
    on it, but there is a void in our focus, I think, today, and
    that is the issue of the responsibility of the institutions and
    the States because we see over and over that the issues is
    completion. I am looking forward to some of the other hearings
    in this series that will help us focus more on why so few
    students are completing, and why so many students are not
    seeking the educational program that best suits their
    interests, and what is the responsibility of the institution,
    the student, and the State?
        I am, frankly, flabbergasted by what we heard from Ms.
    Parker about the lack of concern by the University of Toledo
    for her. I think that points out, again, lots of problems at
    the State level, and I want to believe that no student going to
    an institution in North Carolina would have faced that total
    lack of concern. We have had a lot of hearings on postsecondary
    education over the years and, as time goes on, statistics add
    up. It is becoming clear that none of the issues stand alone.
        Mr. Chairman, you and I share a love for methodical
    processes, and a topical approach makes sense to many, but as
    our witnesses have shown us today, each topic leads directly to
    another. That is why this committee must focus on the following
    touchstones for reform: strengthening innovation and
    completion, modernizing Federal student aid, and promoting
    student opportunities.
        We have not even touched on some of the newer elements that
    are finally being considered within the contents of
    postsecondary education. Just the other day, I read about how
    population challenges are beginning to impact small liberal
    arts colleges. According to a new study by economist Nathan
    Grawe, there will be 450,000 fewer students entering the
    postsecondary system in the 2020's because there are fewer
    people being born in this country. Without the tuition revenue
    supported by the students, colleges are going to need to figure
    out a way to adapt, and it is imperative for our country's work
    force that the system supports students in completing an
    affordable postsecondary education of some kind.
        Mr. Chairman, you and I share a passion for seeing skills
    education play a bigger role, but we cannot forget about small
    institutions and the role of the liberal arts. Students must
    have options. I look forward to continuing these conversations
    with you in our next hearing, and I yield back.
        Chairman SCOTT. Thank you, Dr. Foxx. And one of the things
    that we want to make sure we do not leave out is access to
    liberal arts education. Many people want to have a formula,
    where you can monetize your education the day after you get
    your degree. That is not often possible with the liberal arts
    degree, but the long-term benefits in terms of transformation
    of the student, I think, is extremely important. And for--
        Mrs. FOXX. And as an English major, you know I agree.
        Chairman SCOTT. And for those who are academically
    qualified to make that choice, we do not want to limit that
    choice just to those who can write the big tuition checks, but
    we have heard today that a quality education is out of reach
    for too many of our students. We have heard how Federal and
    State disinvestment from public higher education has hindered
    and under-resourced the school's ability to reach all of our
    students. You have heard how the weakening Federal grant
    programs and supportive services have made it difficult for
    students to access higher education, and I think we have an
    obligation, particularly with the State disinvestment. We heard
    that going from the Pell Grant covering 75--to about 75 percent
    going to 25 percent. Well, that triples the cost to the student
    right there. Just in the Pell Grants, inflation has made the
    portion they pay even more expensive. So, it is obvious that we
    have do something, and today's hearing was extremely important
    and informative for us to get our job done, and I want to thank
    our witnesses for being with us today.
        Thank you, and without objection, the committee hearing is
    adjourned.
        [Additional submissions by Mrs. Foxx follow:]
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        [Additional submissions by Ms. Fudge follow:]
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        [Additional submissions by Mr. Levin follow:]
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        [Additional submissions by Ms. Shalala follow:]
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        [Additional submissions by Ms. Schrier follow:]
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        [Additional submissions by Mr. Takano follow:]
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        [Additional submissions by Mr. Taylor follow:]
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        [Questions submitted for the record and their responses
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        [Dr. Morrison-Shetlar response to questions submitted for
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        [Whereupon, at 1:47 p.m., the committee was adjourned.]

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