[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
LOWERING COSTS AND INCREASING VALUE FOR
STUDENTS, INSTITUTIONS, AND TAXPAYERS
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HEARING
BEFORE THE
SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE DEVELOPMENT
OF THE
COMMITTEE ON EDUCATION AND THE WORKFORCE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, JULY 27, 2023
__________
Serial No. 118-20
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Printed for the use of the Committee on Education and the Workforce
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via: edworkforce.house.gov or www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
55-701 PDF WASHINGTON : 2024
COMMITTEE ON EDUCATION AND THE WORKFORCE
VIRGINIA FOXX, North Carolina, Chairwoman
JOE WILSON, South Carolina ROBERT C. ``BOBBY'' SCOTT,
GLENN THOMPSON, Pennsylvania Virginia,
TIM WALBERG, Michigan Ranking Member
GLENN GROTHMAN, Wisconsin RAUL M. GRIJALVA, Arizona
ELISE M. STEFANIK, New York JOE COURTNEY, Connecticut
RICK W. ALLEN, Georgia GREGORIO KILILI CAMACHO SABLAN,
JIM BANKS, Indiana Northern Mariana Islands
JAMES COMER, Kentucky FREDERICA S. WILSON, Florida
LLOYD SMUCKER, Pennsylvania SUZANNE BONAMICI, Oregon
BURGESS OWENS, Utah MARK TAKANO, California
BOB GOOD, Virginia ALMA S. ADAMS, North Carolina
LISA McCLAIN, Michigan MARK DeSAULNIER, California
MARY MILLER, Illinois DONALD NORCROSS, New Jersey
MICHELLE STEEL, California PRAMILA JAYAPAL, Washington
RON ESTES, Kansas SUSAN WILD, Pennsylvania
JULIA LETLOW, Louisiana LUCY McBATH, Georgia
KEVIN KILEY, California JAHANA HAYES, Connecticut
AARON BEAN, Florida ILHAN OMAR, Minnesota
ERIC BURLISON, Missouri HALEY M. STEVENS, Michigan
NATHANIEL MORAN, Texas TERESA LEGER FERNANDEZ, New Mexico
JOHN JAMES, Michigan KATHY E. MANNING, North Carolina
LORI CHAVEZ-DeREMER, Oregon FRANK J. MRVAN, Indiana
BRANDON WILLIAMS, New York JAMAAL BOWMAN, New York
ERIN HOUCHIN, Indiana
Cyrus Artz, Staff Director
Veronique Pluviose, Minority Staff Director
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SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE DEVELOPMENT
BURGESS OWENS, Utah, Chairman
GLENN THOMPSON, Pennsylvania FREDERICA WILSON, Florida,
GLENN GROTHMAN, Wisconsin Ranking Member
ELISE M. STEFANIK, New York MARK TAKANO, California
JIM BANKS, Indiana PRAMILA, JAYAPAL, Washington
LLOYD SMUCKER,Pennsylvania TERESA LEGER FERNANDEZ, New Mexico
BOB GOOD, Virginia KATHY E. MANNING, North Carolina
NATHANIEL MORAN, Texas LUCY McBATH, Georgia
JOHN JAMES, Michigan RAUL M. GRIJALVA, Arizona,
LORI CHAVEZ-DeREMER, Oregon JOE COURTNEY, Connecticut
ERIN HOUCHIN, Indiana GREGORIO KILILI CAMACHO SABLAN,
BRANDON WILLIAMS, New York Northern Mariana Islands
VIRGINIA FOXX, North Carolina SUZANNE BONAMICI, Oregon
ALMA ADAMS, North Carolina
C O N T E N T S
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Page
Hearing held on July 27, 2023.................................... 1
OPENING STATEMENTS
Owens, Hon. Burgess, Chairman, Subcommittee on Higher
Education and Workforce Development........................ 1
Prepared statement of.................................... 4
Wilson, Hon. Frederica, Ranking Member, Subcommittee on
Higher Education and Workforce Development................. 6
Prepared statement of.................................... 8
WITNESSES
Horn, Michael, Author, Co-Founder of the Clayton Christensen
Institute for Disruptive Innovation........................ 9
Prepared statement of.................................... 12
Leschly, Stig, President and Founder, Postsecondary
Commission................................................. 15
Prepared statement of.................................... 17
Cellini, Dr. Stephanie, Professor of Public Policy and Public
Administration, and of Economics, George Washington
University................................................. 20
Prepared statement of.................................... 22
Gillen, Dr. Andrew, Senior Policy Analyst, Texas Public
Policy Foundation.......................................... 31
Prepared statement of.................................... 33
ADDITIONAL SUBMISSIONS
Foxx, Hon. Virginia, a Representative in Congress from the
State of North Carolina:
Letter from the University of Dayton..................... 52
Testimony dated July 26, 2023 from Lenoir-Rhyne
University............................................. 54
Essay dated March 2023 by Jason Cohn..................... 58
Jayapal, Hon. Pramila, a Representative in Congress from the
State of Washington:
Article dated July 25, 2023 from PoliticoPro............. 74
Banks, Hon. Jim, a Representative in Congress from the State
of Indiana:
Backgrounder dated July 27, 2021 from The Heritage
Foundation............................................. 77
Courtney, Hon. Joe, a Representative in Congress from the
State of Connecticut:
Article from USA Today................................... 100
LOWERING COSTS AND INCREASING VALUE
FOR STUDENTS, INSTITUTIONS,
AND TAXPAYERS
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Thursday, July 27, 2023
House of Representatives,
Subcommittee on Higher Education and Workforce
Development,
Committee on Education and The Workforce,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:18 a.m.,
2175 Rayburn House Office Building, Hon. Burgess Owens
[Chairman of the Subcommittee] presiding.
Present: Representatives Owens, Grothman, Banks, Good,
Moran, Chavez-DeRemer, Houchin, Foxx, Wilson, Takano, Jayapal,
Manning, McBath, Courtney, Sablan, Bonamici, and Scott.
Staff present: Cyrus Artz, Staff Director; Nick Barley,
Deputy Communications Director; Mindy Barry, General Counsel;
Hans Bjontegard, Legislative Assistant; Solomon Chen,
Professional Staff Member; Isabel Foster, Press Assistant;
Daniel Fuenzalida, Staff Assistant; Sheila Havenner, Director
of Information Technology; Meghan Heckelman, Intern; Claire
Houchin, Intern; Amy Raaf Jones, Director of Education and
Human Services Policy; Alex Knorr, Staff Assistant; Georgie
Littlefair, Clerk; Hannah Matesic, Director of Member Services
and Coalitions; Audra McGeorge, Communications Director;
Gabriella Pistone, Legislative Assistant Oversight; Rebecca
Powell, Staff Assistant; Mary Christina Riley, Professional
Staff Member; Chance Russell, Professional Staff Member; Kent
Talbert, Investigative Counsel; Maura Williams, Director of
Operations; Amaris Benavidez, Minority Professional Staff;
Nekea Brown, Minority Director of Operations; Ilana Brunner,
Minority General Counsel; Rashage Green, Minority Director of
Education Policy & Counsel; Christian Haines, Minority General
Counsel; Emanual Kimble, Minority Fellow; Stephanie Lalle,
Minority Communications Director; Madelyn Lucas, Minority
Intern; Raiyana Malone, Minority Press Secretary; Kota
Mizutani, Minority Deputy Communication Director; Veronique
Pluviose, Minority Staff Director; Dhrtvan Sherman, Minority
Staff Assistant; Banyon Vassar, Minority IT Administrator.
Chairman Owens. The Subcommittee on Higher Education and
Workforce Development will come to order. I note that a quorum
is present, without objection, the Chair is recognized to call
a recess at any time.
Deeply embedded in the American psyche is the idea that
colleges and universities provide valuable education that
offers the best pathway to realizing the American Dream. That
in order to unlock a successful career, you must spend at least
4 years chasing a college career.
Historically, a college career was sought by aspiring
professionals who needed a specialized education to enter
fields like medicine, law, and the clergy. The expansion of the
college programs has meant that some degrees inevitably have
misaligned with professional opportunities, leaving graduates
underprepared to enter the workforce.
Before college became a universal mandate thrust upon
unwitting 17 year-olds, this idea was perhaps accurate. College
was cheap, jobs were being filled, and students and taxpayers
were all but guaranteed a return on investment.
That is not the case today. Outdated measures of quality,
coupled with virtually zero transparency of value, have
distorted the post-secondary educational market. The results?
Families are forced to choose a college without knowing the
full price, and the government peddles loans without regard to
a student's ability to repay the principal or the predatory
interest. Students and taxpayers are left to navigate making an
expensive gamble with zero assurance that their bet will pay
off.
Central to this market is a question of whether colleges
can continue to provide value. For decades, we relied on
accreditors to provide quality assurance by sending the public
a signal of which institutions are high-quality. Similarly, the
Federal Government has relied on metrics, such as the cohort
default rate, to protect taxpayers' interests, while the states
have been tagged to review colleges from a consumer protection
lens.
Due to the ineffectiveness of these measures, one third of
colleges now leaves students worse off than if they had never
enrolled in the first place. Additionally, taxpayers are asked
to write off hundreds of billions of dollars on loans for
individuals who make approximately 1 million more than their
non-college going peers.
The purpose of college remains--still remains. Like every
voluntary exchange in a free market system, its purpose is to
provide value to the consumer. Students pay for tuition, room,
and board because they believe the cost today will be offset by
a better job and higher salaries down the road.
The Federal Government then subsidizes the students'
expectations. Unfortunately, the results of this investment
have not, for decades, lived up to the expected returns. This
generation is being overwhelmed by the economic and social
realities of a college degree. The free market did not fail
them. Overregulation of input and under delivery of outcome
did.
This hearing today seeks to explain why 4-year college is
increasingly no longer being viewed as the gateway to the
American dream for so many students. This Committee will also
explore solutions for which we recognize is a systemic issue.
We need to understand that the devaluation of 4-year
college experience is only exacerbated by blanket Federal
bailouts, one-size-fits-all debt relief schemes, and
overburdensome regulations. Restoring the value of a college
education requires a thoughtful, structural reform of the
Higher Education Act.
I believe that there is an opportunity for a bipartisan
discussion today. For far too long the Federal Government has
doled out hundreds of billions of dollars to colleges without
any sense of accountability. Presently, public funding and
profit is based on the number of seats colleges fill, not on
the students' performance or success. This has been a recipe
for more students with more debt and worse outcomes.
This antiquated financial structure needs to be realigned
so that the college success is linked directly to the student
success. This will involve innovation. Funding based on
outcomes, not inputs. It means skin in the game for colleges
whose students take out loans. It should be a financial benefit
to aiding in the graduate's educational success, building a
career, and repaying their loan.
It also should be financial accountability when
institutions do not live up to their promise to graduates.
Presently, the burden of a student's debt is almost entirely
shouldered by the taxpayer and the borrowers. It is time to
think of colleges as stakeholders in their students' success,
versus observers.
With a fresh, innovative mindset and a willingness for
accountability, we can ensure that both students and taxpayers
will receive a positive return on investment for their college.
It is time America takes its place on an international stage of
the greatest, post-secondary educational system in the world.
With that, I look forward to the hearing today, and yield to
the Ranking Member for an opening statement.
[The prepared statement of Chairman Owens follows:]
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Ms. Wilson. Thank you, Chairman Owens, and thank you to the
witnesses for being here today, and thank you to all of the
students, especially, in the audience and welcome to the
Education Committee.
Let us be crystal clear; the evidence is everywhere in
every segment of society that a college degree is the surest
path to the American dream. This is especially true for
students from disadvantaged backgrounds, like first generation
college students who have not had the luxury of guidance from
parents or family members that have attended college.
Students with bachelor's degrees earn nearly 1 million more
over the course of their careers than those with only a high
school diploma. To ensure students have access to the promise
of higher education, the Department of Education must hold bad
actors in higher education accountable for student success.
Stronger accountability regulations in higher education saves
students money and prevents them from wasting money on
worthless degrees.
Under President Biden's leadership, the Education
Department has done just that. In June, the Department put
forth the strongest gainful employment rule ever. This rule
ensures that institutions truly prepare students for success in
the workforce, protecting them from low-quality job training
programs. The Defense Department has also worked to enforce
borrower defense regulations, providing debt relief for
borrowers defrauded by the institution.
As a result, the Biden administration has forgiven more
than 13.3 billion for one million borrowers. Let us compare
this to the work of the previous administration, who worked
every day to repeal important accountability measures that were
meant to protect students originally put in place by Democrats.
Stronger accountability regulations in higher education
also saves taxpayers money and prevents Federal aid from going
to predatory programs. Far too many tax dollars have gone to
dishonest for-profit colleges that heavily rely on Federal
student aid funding, and then they target underrepresented
students, foolishly advocating for a free market approach to
college accountability only lines the pockets of for-profit
companies and CEOs.
The Biden administration's effort to safeguard students
from sub-par institutions are saving taxpayers money. As we
open up this hearing, I hope our colleagues from across the
aisle will take accountability seriously, and work with
congressional Democrats to protect students and improve college
accessibility.
Taxpayers, students, and the economy as a whole stand to
gain when improved accountability measures are put in place in
higher education. With that, Mr. Chair, I yield back, and I
look forward to a productive discussion. Thank you.
[The prepared statement of Ranking Member Wilson follows:]
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Chairman Owens. Thank you. Pursuant to Committee Rule 8(c),
all members who wish to insert written statements into the
record may do so by submitting them to the Committee Clerk
electronically in Microsoft Word format by 5 p.m., 14 days
after the date of this hearing, which is August 10, 2023.
Without objection, the hearing record will remain open 14
days to allow such statements and other material referenced
during the hearing to be submitted for the official hearing
record. I will now turn to an introduction of the four
distinguished witnesses.
The first witness is Mr. Michael B. Horn, who is an Author
and Co-Founder of the Clayton Christensen Institute for
Disruptive Innovation in Boston, Massachusetts, and an adjunct
lecturer at Harvard Graduate School.
Our second witness is Mr. Stig Leschly, who is President
and Founder of the Postsecondary Commission, and is located in
Boston, Massachusetts. Next, our third witness is Dr. Stephanie
Cellini, who is Professor of Public Policy and Public
Administration and Economics at George Washington University in
Washington, DC.
Our final witness is Dr. Andrew Gillen, who is Senior
Policy Analyst at the Texas Public Policy Foundation, located
in Austin, Texas.
We thank the witnesses for being here today and look
forward to their testimony. Pursuant to Committee Rules, I
would ask that you each limit your oral presentation to a 5-
minute summary of your witness statement. I also would like to
remind the witnesses to be accurate, to be aware of their
responsibility to provide accurate information to the
Subcommittee.
I first would like to recognize Mr. Horn.
STATEMENT OF MR. MICHAEL HORN, AUTHOR AND CO-FOUNDER OF THE
CLAYTON CHRISTENSEN INSTITUTE FOR DISRUPTIVE INNOVATION,
LEXINGTON, MASSACHUSETTS
Mr. Horn. Thank you and good morning, Chairman Owens,
Ranking Member Wilson, and distinguished members of the
Committee. Thank you for giving me the opportunity to speak on
this important topic. My name is Michael Horn. I am the co-
author, or co-editor of six books on education, and I teach at
the Harvard Graduate School of Education.
In our current system of higher education, we pay for what
we get. The government underwrites significant portions of the
higher education system, it means that students and families
are not the only customers of colleges and universities,
taxpayers are as well.
There is a saying in efficient markets, the customer is
always right. What they demand is ultimately met. In higher
education what the government, and therefore the taxpayers are
currently paying for, is enrollment of students. Not
employment, not learning, not life outcomes.
Now combine that with four realities. One, higher education
is an experienced good. It is hard to understand its value or
utility until after it has been used. Two, the price of
colleges and universities for individual students is opaque, as
the actual price is often not revealed until after admission.
Once more, the price charged often changes from year to
year. Three, the money from the Federal Government often has
the feeling of being free to the student. Four, according to
the data we collected for our book Choosing College, students
attend college for a variety of nuanced reasons, many of which
do not pertain directly to economic return.
The result of all these dynamics is that higher education
has long been on an unsustainable cost trajectory. Since 1970,
spending by public colleges and universities rose from nearly
104 billion in today's dollars, to 420 billion by 2020.
Altogether postsecondary institutions now spend more than 670
billion per year, and for what? Completion rates remain poor,
with nearly 40 percent of students failing to graduate from 4-
year institutions within 6 years.
Nearly one-third of all institutions leave their students
with zero economic return, after accounting for the cost of
attendance. The Federal Government's answer to this quandary
since 1965 has been accreditors, agencies that now play the
role of gatekeeper to Federal financial aid.
Accreditors were not built to play a quality assurance
role. They were designed originally as peer review
organizations to determine what is a college, and to help
institutions improve. They may do that well, but they are not
good at focusing on student outcomes, nor does Federal policy
incentivize them to do so.
According to a report from the postsecondary Commission, my
colleague Stig here, low graduation rates, high loan default
rates, and low median student earnings did not increase the
likelihood that an accreditor would take disciplinary action
toward a college.
Accreditation is an all or nothing game, once accredited,
you get access to Federal dollars. Once you have access to
Federal dollars, you can enroll students, and make them feel
like the education is subsidized and significantly less
expensive than it ultimately is. Indeed, the instinct to create
regulations focused on how a college or university operates
through mechanisms like regulating a school's contracts with
third-party entities, instead of its outcomes, only exacerbates
this problem.
The regulation of inputs how a college does its work, only
locks institutions into set ways of doing things. It encourages
compliance, not value, and colleges pass the cost of compliance
onto students in the form of higher tuition. The strategy has
not worked. Policies should instead focus on student outcomes,
and empower--yes, free up, schools to figure out the best ways
to deliver value for students and taxpayers.
What would a better market look like? For starters, upfront
price transparency so students knew what they would pay on the
front end, and not have any surprises. What would better
incentives look like? Congress could pass a policy to require
that colleges share in the risk when student borrowers do not
repay what they take out in loans.
That will result in schools and programs like Western
Governor's University, EYU Idaho, and Georgia Tech's online
Master of Computer Science program that are innovative, meaning
lower costs and better economic returns to the student. To be
clear, the taxpayer customers of higher education should not
tolerate bad college programs be they online or brick and
mortar, that offer miserable returns on investment for
students.
This should be in the interests of traditional colleges and
universities. At a time when their enrollments and reputations
are both declining, they should want to do these things.
Witness how traditional liberal arts colleges like DePaul
University in Ohio, and Colby College in Maine have created
what amount to employment guarantees.
The road ahead can be bright for students, schools, and
American society, with a focus on outcomes and value, not
inputs and empty promises. Thank you for your time today.
[The prepared statement of Mr. Horn follows:]
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Chairman Owens. Thank you. We would now like to recognize
Mr. Leschly.
STATEMENT OF MR. STIG LESCHLY, PRESIDENT AND FOUNDER,
POSTSECONDARY COMMISSION, BOSTON, MASSACHUSETTS
Mr. Leschly. Chairman Owens, Ranking Member Wilson, and
members of the Subcommittee. Good morning and thank you for
having me here. My name is Stig Leschly. I am the President and
Founder of the Postsecondary Commission, and I teach
entrepreneurship at Harvard Business School.
The Postsecondary Commission is an aspiring accreditor,
seeking recognition from the Department of Education. We are
governed by a bipartisan board. Our priorities as an accreditor
are to hold institutions accountable for generating strong
economic returns for their students, and for acting with
transparency toward them.
If they do this, we will endorse them for access to Title
IV aid, and grant them wide discretion to operate an innovate
as they see fit. In my testimony today, I will describe four
characteristics of our proposed model of accreditation. First,
economic return. We are adamant that institutions should
deliver strong, economic returns to their students.
Overwhelming majority of students in the U.S. describe a
better job, a viable career, and higher wages, as their top
motivations for investing in higher education. When measuring
economic returns to higher education, we calculate the wage
gains for the value-added earnings that institutions generate
for their students.
We do this by comparing the actual wages that students earn
after the exit an institution with an estimate of the wages of
what they would have earned if never enrolled in the first
place. When holding institutions accountable for these wage
gains, we make sure they are large enough to compensate
students in a reasonable timeframe for their costs of
attendance.
This approach creates incentives for institutions to both
lower costs, and to raise wages. We also insist on assessing
institutions for the wage gains of all their entering students,
whether they graduate or not, so that institutions have
incentives to maintain high graduation rates.
Our approach to measuring wage gains controls importantly,
for whether institutions enroll high need, or low need
students. Student outcomes of any kind mean almost nothing
until they are adjusted for the demographics and circumstances
of the students in question.
Second, transparency. In addition to being almost fanatical
about measuring precisely and evaluating fairly the wage gains
that institutions produce for students, we provide
transparency. We are unwavering in our demand that institutions
reveal fully and proactively to students their outcomes, their
prices and their designs.
Students and their families crave and deserve good
information as they make lifechanging decisions about higher
education. Third, accountability. When institutions fail to
deliver adequate economic returns, or when they dodge
transparency, we will intervene.
We will do it sensibly, and collaboratively, but pointedly.
Fourth and last, innovation. Our sector of education needs
innovation. It needs clever institutions, both existing ones
and new ones that can search out new groundbreaking models of
higher education that costs less and produce more.
Our model enables this kind of searching innovation. We
have clear and fair standards for economic returns and
transparency. We intervene when needed. Then we give
institutions in good standing wide discretion to operate, to
experiment and to specialize.
We think this approach to accreditation, one that is tight
on outcomes, and loose on means, enables and justifies
innovation. In closing, I will observe again that our
priorities as a new and aspiring accreditor, strong economic
returns, full transparency, real accountability.
Responsible, well-monitored innovation are also the
priorities of this Committee, and of a bipartisan movement in
this capitol and in most states, toward better economic
outcomes, and more innovation in U.S. higher education. Thank
you.
[The prepared statement of Mr. Leschly follows:]
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Chairman Owens. Thank you. I will now recognize Dr.
Cellini. Did I pronounce that correctly?
STATEMENT OF DR. STEPHANIE CELLINI, PROFESSOR OF PUBLIC POLICY
AND PUBLIC ADMINISTRATION, AND ECONOMICS, GEORGE WASHINGTON
UNIVERSITY, WASHINGTON, D.C.
Ms. Cellini. Chairman Owens, Ranking Member Wilson, and
members of the Committee. Thank you for the opportunity to
testify today. For most students, getting a college education
is one of the best investments they can make. Over a lifetime,
the benefits of a college education typically far exceed the
cost to students and taxpayers.
For some students, the costs may exceed the benefits,
especially if they do not complete their degree, or if they
attend programs that do not provide them with skills that are
valued in the labor market. If higher education was a well-
functioning, competitive market, poor performing programs would
be forced to close as students realize the program's low value.
The reality is that the market for higher education does
not operate like other markets. It exhibits several types of
market failure that make government intervention imperative for
protecting students and taxpayers. Among the most important
market failures, and the one I will focus on today, is
imperfect information.
Institutions have more information on school quality, costs
and outcomes than prospective students. This imbalance is
compounded by the fact that students have little way of knowing
how well a program will meet their needs until after they have
enrolled, and after they have taken on debt to attend.
Unlike most other products, the benefits of higher
education accrue far into the future, making them difficult for
students to predict. Prospective students face an array of
complex choices, and these choices may be particularly
challenging to navigate for students without a tradition of
college going in their community.
Research shows that even very high achieving low-income
students find it difficult to digest the mountain of complex
information on colleges to find the best match. Since most
students pick a college only once or twice in their lives, they
have few opportunities to practice, and very little room for a
mistake.
One market-based approach to solving problems of imperfect
information is to simply provide more information to students.
This approach is a necessary first step in addressing
information issues, and efforts to enhance data availability
like the college scorecard, and the College Transparency Act,
are critically important.
A growing body of literature shows that information
provision alone is not sufficient to protect students and
taxpayers. As I document in my written testimony, past releases
of government provided information, like the scorecard, have
had little or no impact on the choices of the students who need
it most, nor have they reduced college costs.
To ensure value for students and taxpayers, institutions
must be held accountable for student outcomes with meaningful
consequences for poor performing programs. In contrast to other
markets, the Federal Government has access to excellent data on
student outcomes by which to measure value.
It has more expertise to interpret performance than the
average student. It also has the two rules authority, an
obligation to set a minimum standard of value for taxpayer
financed programs.
Legislators can address these market failures. First and
foremost, the Department of Education's proposed gainful
employment regulations must be implemented. GE is critically
important for improving accountability and fulfilling a higher
education act is imperative to ensure that career training
programs lead to gainful employment.
The proposed GE rule is well targeted to hold accountable
the programs that the data show are the most likely to leave
students with heavy debt burdens and low earnings.
Nearly one-third of for-profit certificate programs would
fail GE measures, compared to just 1 percent of programs in
community colleges. For-profit institutions enroll
disproportionate shares of low-income students, students of
color, veterans, working students and single parents, while
typically charging higher tuition, relying more heavily on
Federal student aid, and generating worse outcomes for students
than other sectors.
On average, earnings are lower, and debt is higher in the
for-profit sector than in others. It is not surprising that
over half of for-profit borrowers default on their loans over
12 years. New research shows that accountability systems like
GE, that sanction or close poor performing, for-profit
colleges, do not reduce college access, but instead cause
students to attend colleges with better outcomes.
Although poor student outcomes are concentrated in the for-
profit sector, they are not confined to it. Accountability
policies should be appropriately designed to address the risks
of different types of programs.
Should Congress move to expand Pell Grant eligibility to
very short-term programs, any legislation must ensure that only
the highest performing programs are eligible to participate in
this critical taxpayer funded program.
Over the last two decades, a growing body of economic and
policy research has generated new evidence of value in the
market for higher education. Research has shown where the
problems are concentrated, how students and institutions may be
affected by various policy options, and which metrics might be
most effective in measuring value?
I am grateful for the opportunity to share this research
with you, and I hope it will help in your efforts to ensure
value in higher education for students and taxpayers. Thank
you.
[The prepared statement of Ms. Cellini follows:]
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Chairman Owens. Thank you. Last, but not least, I would
like to recognize Dr. Gillen.
STATEMENT OF DR. ANDREW GILLEN, SENIOR POLICY ANALYST, TEXAS
PUBLIC POLICY FOUNDATION, AUSTIN, TEXAS
Mr. Gillen. Chairman Owens, Ranking Member Wilson, and
esteemed members of the Subcommittee, I would like to thank you
for giving me the opportunity to testify on this important
topic. The value of higher education is being viewed more
skeptically right now than at any other time in my life.
I think there is a very good reason for that. In addition
to all the categories of students Dr. Cellini just mentioned,
if you just take the typical student, the benefits have been
stagnant, the wage premium for going to college has not
increased in 16 years, and prices on the other hand have
increased pretty substantially.
The combination of these two trends of stagnant benefits,
and rising prices, has slowly eroded the value of higher
education. How can we increase the value? I see two promising
paths. One is to encourage lower prices. That can be
accomplished in a few ways, so one has already been mentioned,
which is price transparency.
There is a recent Government Accountability Office report
that found that about 91 percent of colleges obscure or mislead
their students about the price of attending college. A new law
that increased price transparency would increase student and
parent awareness of the costs of college, and their increased
resistance to paying those high costs would enforce a market
discipline on the colleges.
Another method of lowering prices involves combating the
Bennett Hypothesis, which is the tendency of colleges to
increase their prices in response to financial aid.
As more and higher quality information on costs and
quality, such as value-added learnings outcomes, and earnings
outcomes are available, they will shift the nature of
competition from reputation-based competition, which we have
right now, which drives up costs, to value-based competition,
which will drive down costs.
When determining a student's aid eligibility, we could also
use the median cost of college. Right now, we use the cost of
attendance, which the college is allowed to set by itself. The
median cost of college would just be the median among the costs
of attendance figures.
This would help sever the link between an increase in
prices and an increase in aid eligibility, which would help
defeat the Bennett Hypothesis. A second promising path to
increase value is improving accountability. Historically we
have tried several accountability mechanisms, such as cohort
default rates, the 90 -10 rule, and gainful employment.
These have not worked very well. There are some market and
outcomes driven performance accountability metrics that could
accomplish much more. Two types of metrics have significant
potential to improve accountability in higher education, and
those are risk sharing, and the return on investment.
For risk sharing right now, if a student does not repay
their loans, the taxpayer suffers huge losses, but the school
gets to keep all of the money that they were paid upfront. Risk
sharing would change that by requiring the schools to reimburse
taxpayers for any losses that they incur as a result of the
education that they provided to their students.
The simplest version of risk sharing is to just have the
college cosign the loan, so that when the student is unable to
repay the college then gets a bill for it. Some colleges are
already using a version of this, called loan repayment
assistance program. Another way to implement risk sharing is to
have the college reimburse the taxpayers for any realized
losses.
The Congressional Budget Office currently estimates that
the subsidy rate on student loans is about 18 percent. What
that means is that for every dollar that the government lends
out, they are losing--taxpayers are losing about 18 cents. The
risk sharing would basically require the colleges to pay that
18 cents back.
The amount of reimbursements required of the colleges vary
dramatically based on the outcomes for their students. If you
look at the typical computer science, or the typical registered
nursing degree, their earnings are high enough that they are
able to repay their loans without imposing any losses on the
taxpayers, so those colleges will not have to reimburse
anything for those students.
If you look at the other end of the spectrum, a field like
fine arts degree, the subsidiary rate for that discipline is
about 69 percent. Colleges would be required to reimburse about
69 percent on average for those students.
In terms of return on investment, another sort of potential
accountability metrics would be--return on investment would
track basically benefits relative to costs. By taking account
of both benefits and costs, ROI metrics get a much more
comprehensive assessment of the value of the education.
For example, one of your certificate program that increases
earnings by $2,000.00 would have a very high ROI if it only
costs $1,000.00, but a very low, or even innate of ROI if it
costs $100,000.00. ROI metrics can be used to supply carrots
and sticks to colleges, for example colleges offering high
value programs can be given performance bonuses.
In contrast, low value programs could pay sanctions,
including losing access to Federal financial aid programs.
Thank you for giving me the opportunity to testify, and I look
forward to answering any questions you have.
[The prepared statement of Dr. Gillen follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Owens. Thank you. Under Committee Rule 9, we will
now question witnesses under the 5-minute rule. I will begin
the process. Dr. Gillen, you noted in your testimony that when
a loan is made colleges receiving financial benefit up front,
zero downside risk, while students and taxpayers face the
consequences when the education does not live up to its
promise.
How would a market-based approach to accountability, like
risk sharing, reverse this backward incident structure?
Mr. Gillen. Yes. As an economist, the skewed incentives
that we see under the current financing model is very
disturbing. You could have a program that does not deliver a
very good education, or it is just not well compensated in the
labor market. The student loses out because they are
financially devastated.
The taxpayers lose out because they have never repaid the
loans, but the school still profits. To me, one of the great
things about these market driven and outcome based
accountability mechanisms, is that you can align those
incentives so that the school only profits when the school--or
when the student and the taxpayers do as well.
Chairman Owens. Very good. Thank you. Mr. Horn, most
students go to college to move up the economic ladder, yet when
an accreditor is reviewing the quality of a college, the review
is not focused on the student outcomes. This is partly because
the Higher Education Act requires accreditors to evaluate
students' access based on college inputs, such as facilities,
equipment, supplies of the college.
However, we have seen accreditors set additional standards
based on other inputs that they desire programs and
institutions to pursue. This can include requiring an
institution to prioritize political practices, or a litmus
test, such as reading, diversity, equity and inclusive
practices.
If accreditors set standards focused on student outcomes,
instead of a variety of inputs, how would the colleges respond?
Mr. Horn. Yes, I think that you would see a clear focus on
value for students, and you would see a lot more innovation. As
Stig was speaking about, and as they set up an accreditor
focused on outcomes, it would encourage institutions to try an
array of ways to support students in different circumstances,
to focus on what they do best, and not have the accreditors
micro manage the missions of the institutions themselves, but
instead free them up to serve the students along the dimensions
that they most care about.
Chairman Owens. Thank you. By the way, this is why I
introduced recently an accreditation for college act called
Act, ACE Act, which will prohibit accreditors from requiring
colleges to accredit to meet any political litmus test, such as
requiring adherence to DEI standards as a condition of
accreditation.
Mr. Horn, earlier this year the Department of Education
shocked most everyone in a postsecondary community, when it
expanded the definition of a third-party service. As you know,
colleges and universities of every type, partner with
technology and instituting experts to develop course work
outlined educational platforms, or provide retention and
student success activities.
These partners are by no means financial aid services.
Because of this vast criticism, the Department pulled back its
guidance. Why are the Department actions regulating third party
services--just one example of the misalignment focused on
institutional inputs rather than outcomes?
Mr. Horn. Yes. It is a classic case of being overly broad
and one might say creative, and changing the English language
to expand the definition of the entities that the statute was
meant to regulate, and the effect I think is pretty clear. It
is going to crowd out innovative startups that might support
colleges in better serving students.
It favors status quo incumbents. It creates more compliance
costs that will actually raise, not lower the price of higher
education, and it distracts from the ultimate thing that we
need to be focusing on, which is a better framework for policy
focused on outcomes and value for students and taxpayers.
Chairman Owens. Thank you so much for that. Right now, I
would like to recognize the Ranking Member, Ms. Wilson.
Ms. Wilson. Thank you. Thank you, Mr. Chair. Dr. Cellini,
the Federal Government is uniquely equipped to provide
oversight of institutions to ensure that they are not harming
students or wasting taxpayer money. While it may not be the
Federal Government's role to tell students where to enroll, it
is essential that the government help to determine where not to
go based on how institutions support their students.
Tell us why must the Federal Government, and not individual
students take the onus of identifying low-quality institutions,
and how does Federal accountability protect our taxpayers?
Ms. Cellini. Thank you. Well as I mentioned, imperfect
information is a problem in this market. Choosing a college is
very complex, there is a lot of information out there. We know
that just providing information may not get to the students who
need it most. There is research on the College Scorecard, and
other types of lists that identify high-cost programs that have
not made a difference for students.
They have not reached students who might need that
information the most. There are lots of taxpayer dollars at
stake, billions of dollars, and we need to make sure that
students at least know which programs have value. They should
not have to take it on themselves to go through the mountain of
information, complex information on college costs and
attributes to decide for themselves which programs have value.
The Federal Government has data that it can use on student
outcomes, and can at least ensure a minimum bar, so that
students are assured that programs that they enter into will
have value in the long run.
Gainful employment and other accountability metrics provide
some of this assurance for students, to make sure that low
performing programs cannot access Federal student aid.
Ms. Wilson. Thank you. Mr. Horn, the current cost of higher
education puts a college degree out of reach for many. You
mentioned in your written testimony the promise of loan risk
sharing to address college affordability and accountability.
However, some experts, including the Brookings Institution,
have warned that if not crafted properly, risk sharing could
harm disadvantaged students' access to higher education.
How can you promote this policy without adequately
explaining how this policy could, if designed poorly,
disincentivize enrollment of students deemed at risk?
Mr. Horn. Yes. I appreciate the question, and I think there
are two sides that are important to balance here. One is the
importance of accessibility for the socio-economic gains that
you mentioned in the beginning in your remarks about the
benefits that can construe to successful graduation, and
placement into jobs.
When you craft these policies, obviously making sure you
ensure the upside is critically important. The second thing
that I would say is that Dr. Gillen, and their institute, have
done a significant amount of work in thinking about the right
way to structure these programs to balance the concerns of poor
outcomes, the upside of really good outcomes that actually
reset what the taxpayer is paying for around value for
students, and the importance of focusing on that ultimate
value.
Ms. Wilson. Okay. Dr. Gillen, if we are serious about
promoting equality, accountability in higher education, we
should focus on holding for-profit institutions accountable for
pushing the false promise of a quality education. The National
Center for Education Statistics reported that in a 6-year
period only 29 percent of students at for-profits successfully
completed their degree.
How can we promote for-profit institution places in higher
education landscape when they continuously fail, continuously.
Mr. Gillen. Low value education is a concern regardless of
where it occurs. It occurs in the for-profit sector, it occurs
in the public and non-profit sector too. I think that our role
should be to identify where low value education is occurring,
and stamp it out wherever it occurs, including the for-profits,
including the publics, including the non-profits.
Ms. Wilson. I think I am out of time. I yield back.
Chairman Owens. Thank you. I now recognize Mr. Moran.
Mr. Moran. Thank you, Mr. Chairman. I appreciate each one
of you talking about this very important subject today. Dr.
Gillen, I want to talk to you a little bit about Texas State
Technical College if you don't mind. You mentioned performance-
based funding as a way to provide incentives for colleges to
give high value education to students.
You point to the funding structure used by TSTC as a
potential model for policymakers to follow if performance
funding were to be incorporated into the Higher Education Act.
Can you discuss a little bit more about how this model works in
Texas, and what lessons this Subcommittee can learn from that
model?
Mr. Gillen. Yes, absolutely. The Texas State Technical
College, it is a public college primarily vocational, and
unlike almost all other public universities and colleges in the
country, it does not receive appropriations upfront, so it does
not get a check from the State government.
Instead, what the State does is it tracks all of Texas
State Technical College students for several years after they
graduate. It then calculates the value-added earnings, so the
difference between what they think those students would have
earned before attending the college, and what they earn
afterwards.
It then calculates the increase in tax revenue for the
State of Texas, and then it shares a portion of that tax
revenue with the school. That is how Texas State Technical
College is funded. It educates students. Those students then
generate more tax revenue, and some of that tax revenue is
given to the State, almost as like a performance bonus, in lieu
of State appropriations.
This is a very innovative and great model. It has led to
really great changes within Texas State Technical College and
the State. Everybody in Texas is very, very pleased with this.
The cities that do not have a campus want one. The cities that
do have a campus are thrilled to have one.
This is a great model, and it also changed the culture of
the administration of the university. Whenever you think about
the traditional college, one of the hardest things to do is get
rid of a department, right? Get rid of a major, get rid of a
certificate program because it creates a lot of controversy.
That is not the case at Texas State Technical College
because they are looking at the data for the earnings outcomes
of their students, and if that data is not sufficient to
justify the program, they just quietly close the program, and
redirect those resources elsewhere.
That cultural shift is just a huge, huge benefit, I think.
Mr. Moran. It sounds like part of that culture is really a
culture of internalizing this notion of accountability. Self-
accountability, both at the professor and administration level,
and also at the departmental level. Would you agree with that?
Mr. Gillen. Yes. Absolutely. I mean Texas State Technical
College is definitely held accountable. If their students do
not get good jobs, they do not get paid, which is completely
the opposite way that we fund most colleges in this country.
Mr. Moran. Yes. We spend a lot of time on this Committee
talking about the substance of policies, or substance of things
we do not like being taught in either early education, or
institutions of higher education, but in truth, the proof is in
the pudding.
Ultimately, we are developing individuals to go out in the
workplace and to be beneficial parts of the workplace, and so
this kind of model reinforces that, that hey look, let us see
what kind of teaching leads to what kind of outcomes. Do you
see any other institutions of higher learning that are using
this kind of model?
Mr. Gillen. There is a lot of tinkering I would say. I am
only aware of Texas State Technical College using this exact
model. There are a lot of performance-based funding programs
throughout the country that sort of mimic this structure. The
difference is this is all of Texas State Technical College's
funding, whereas these performance base fundings it is
typically a rounding error, so there is a hint of this model
spreading, but it has not really spread.
Mr. Moran. I want to switch gears and ask Mr. Horn really
quick about a different topic because I am a father of four. I
have got two seniors in high school that are looking to go to
college, so we are looking at a whole lot of finances, and a
whole lot of costs of colleges. I know firsthand how difficult
the college shopping process could be.
How come colleges are not--how come we are not viewing it
as a long-term investment, and we are not pricing it that way,
and we are not holding our colleges and universities
accountable for the transparency for the cost of certain
programs, compared to their return on their investment. Can you
speak to that?
Mr. Horn. Sure. First, good luck as you go through the
process. Second, opacity right works in favor of the colleges
in many cases. It obscures, it creates a social or emotional
feeling of oh, I got a scholarship when in fact they are net
tuition discounting as they try to maximize the revenue in
their class, and things of that nature.
I would argue it is a short-sighted part of the model as
well because it is undermined trust in the institutions as the
price tag has gone up over time.
Mr. Moran. Yes. I appreciate that. Thank you all for your
information today. I yield back.
Chairman Owens. Thank you. I would now like to recognize
Mr. Takano. I am sorry, Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman. Dr. Cellini, when
President Johnson signed the Higher Education Act, he said that
it meant that a high school senior anywhere in this great land
of ours can apply to any college, or any university, in any of
the 50 states, and not be turned away because his family is
poor.
He backed up that promise with the Higher Education Act,
where the Pell Grant at that time covered about 80 percent of
the cost of attending a State college. The other 20 percent
could be made up with part-time jobs, summer jobs, and that
kind of thing.
Is it still important for our democracy that all students
have access to higher education?
Ms. Cellini. Yes. Higher education is incredibly important.
It has benefits not only to students, but also to society more
broadly in the form of things like increased civic
participation, increased productivity, reduced crime. Access to
education is incredibly important for society. The Pell Grant
is incredibly important for making college affordable for
millions of students.
About 7 million students every year get the Pell Grant, and
we know from the research that it is not only important for
enrollment in college, but also for completion and in fact, it
can even raise earnings of students. Some researchers have
found that earnings effects alone from the Pell Grant make it
pay for itself many times over. The Pell Grant is incredibly
important.
Mr. Scott. Thank you. We have heard a lot about economic
return on the investment. Is there inherent value in a 4-year
on campus liberal arts degree that cannot be monetized?
Ms. Cellini. Of course there is many benefits to a college
education, some that can be monetized, some that cannot. As
kind of a minimum bar to look at accountability and what
students expect to receive is at least a small boost in
earnings, in addition to some of those other non-pecuniary
benefits.
Mr. Scott. If some degrees are easier to monetize than
others because you have got readily identifiable job skills,
others you just have a good education, and should Federal
financial aid be limited to courses where a financial monetized
financial return can be calculated? Or should financial aid be
available to all college courses?
Ms. Cellini. I think we need different types of
accountability for different types of programs. The
accountability needs to be appropriate for the risks of those
programs. We know that many of the problems of value are
concentrated in the for-profit sector, and things like gainful
employment do take a look at those programs, and career
programs are mentioned in the HEA.
Mr. Scott. Well in those programs the promise is that you
take the course to get a specific job, and you are talking
about consumer protection, and you have been given a promise.
If you are really not going to get a good job, you have been
defrauded.
When the promise is that you will get a good education,
that is kind of hard to monetize frequently, and the question
is whether the Federal Government should be--Federal financial
aid should be available for college courses, history, English
or other things where you may not be able to monetize it.
Ms. Cellini. Well, on average we see that students in 4
year college programs, at most institutions, as I mentioned for
most students college does pay off in 4 year programs. We see
that often in liberal arts for example, that students may not
make quite as many earnings right out of the gate, but those
earnings may increase over time, and they may also of course
have non-pecuniary benefits of the education as well.
Mr. Scott. That is why we have to be careful about sticking
just to being able to monetize the particular degree, but there
is inherent value in a good education. One of the things that
we have not discussed is why it costs so much to go to college.
Where can colleges actually cut costs, or is providing an
education just inherently expensive?
Ms. Cellini. I think there are a lot of reasons why college
costs have increased. I think there has been State
disinvestment in higher education, and as a result, sometimes
budgets are balanced on the backs of students at the State
level, and tuition rises.
I think there are things that colleges can do to help
students. Colleges can invest in institutional grants, or lower
tuition to ensure that students do not take on huge amounts of
debt.
Mr. Scott. Well, the fact is that states have traditionally
several decades ago, paid two-thirds of the costs to the State
college, now it is on average less than one-third. That burden
has gone on the students. We are trying to get the costs of
running a college down has been challenging. Thank you, Mr.
Chairman.
Chairman Owens. Thank you. I would now like to recognize
the Chair of the full Committee, Dr. Foxx.
Mrs. Foxx. Thank you, Mr. Chairman, and I am interested in
hearing what the Ranking Member has to say and finding that
there really is a different world view as far as education is
concerned. I thank our witnesses. Mr. Horn, in any well-
functioning market, which education is, the price you see
reflects the quality of the product being sold and is the
actual price you will pay.
Unsurprisingly, that is not the case in our poorly
functioning postsecondary education market. The rise of
strategic tuition discounting has completely distorted the
connection between price and quality, and the result in two
identical students paying widely different prices simply
because one indicated an interest in more than one school on
his or her FAFSA.
In your testimony you highlight several colleges that have
moved away from the opaque pricing scheme and toward models
that are transparent for students and families. Can you
elaborate on these alternative pricing models, including how
they benefit students and institutions?
Mr. Horn. Certainly. We have seen four I would say,
innovations in transparency and pricing. One is to move to a
subscription model, so like Western Governor's University,
which now serves some 160,000 or so students with competency
based online education. We have seen institutions move to
guarantee a 4-year pricing model upfront, so that there is no
surprise from year to year in what will change.
This was first popularized with scholarships and athletics.
It has moved to the actual price tag itself. A third one has
been tuition resets, so moving away from the net tuition
discounting model that you mentioned, to say hey, let us
actually move down to the actual price itself.
Then fourth, I will mention, is also a work college model,
where you are partnering with employers so that students as
they are working and gaining educational credit for that work
are also getting wages that pay for the tuition, like Paul
Quinn College.
Mrs. Foxx. Thank you. If we can learn anything from this
hearing, it is that institutions can change for the betterment
of themselves, students, and taxpayers. With that, I request
unanimous consent to submit for the record testimony from the
University of Dayton, which has been a leader in offering
upfront guaranteed prices to students resulting in lower debt
and increases in retention conflation and enrollment.
I ask unanimous consent to submit testimony from Lenoir-
Rhyne University in North Carolina, which has committed itself
to transparent pricing, and recently underwent a tuition reset.
I commend President Fred Whitt, of Lenoir-Rhyne University, for
his leadership in implementing transparent tuition prices.
Mrs. Foxx. Mr. Chairman.
Chairman Owens. No objection.
[The information of Mrs. Foxx follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mrs. Foxx. Mr. Leschly, at the beginning of this Congress
several Committee Republicans introduced the Pell Act. The bill
extends Pell Grants to high-quality, short-term workforce
programs. Do you have any feedback for this Committee on
whether or not the Pell Act to earnings metrics serves as a
strong measure of the program's effectiveness?
Mr. Leschly. Thank you. It is a very thoughtful, appealing
piece of work, this earnings metric that has been drafted into
the Pell Act. It looks at the actual wages that students
experience and compares them to a baseline. In this case, it is
a multiplier of the poverty line, but it essentially gets at
initially this thing we have been talking about, value added
earnings, and measures whether students do better economically
because they go to college.
Then very importantly, it compares that wage gain to the
price that students pay to go, and it polices underperformance
on that metric, and very importantly sets incentives for
institutions to both lower costs, and to drive up wages.
Mrs. Foxx. Thank you. I would like to highlight an analysis
by the non-partisan Urban Institute that found that, ``The Pell
Act's economic value test would be a substantially higher bar
for programs to clear than the draft GE rule.'' If my
colleagues are serious about accountability, the Pell Act
provides a stronger metric that can be applied to all programs.
I request unanimous consent to submit this analysis into
the record also.
Chairman Owens. No objection.
[The information of Mrs. Foxx follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mrs. Foxx. Dr. Gillen, under the Department's proposed
gainful employment rule, a hypothetical career education where
graduates earn $35,000.00 and owe $110.00 per month on their
loans would be considered to have affordable debt and receive a
pass under the Biden administration's own GE rule.
Under the new income driven repayment plan, the $35,000.00
in loans is somehow now unaffordable debt that needs to be
canceled. The new IDR plan would allow some borrowers to pay
just $9.00 per month, and ultimately get his or her loans
canceled. Do you think these rules are inconsistent?
Mr. Gillen. Yes. I think that is an accurate assessment.
The problem is that they are using different poverty line
cutoffs, so the new student loan repayment plan uses a cutoff
of 225 percent of poverty line, whereas gainful employment is
likely going to be using 150 in the final version.
They are trying to measure the same thing, affordable debt,
and so having two different baselines is illogical.
Mrs. Foxx. Thank you. I yield back, Mr. Chairman.
Chairman Owens. Thank you. I now recognize Mr. Takano.
Mr. Takano. Thank you, Mr. Chairman. My Republican
colleagues claim that they want to lower costs and increase
value for students and institutions in higher education, yet
those same colleagues vehemently opposed President Biden's
proposal for free universal community college under his
America's College Promise Act.
If we are serious about lowering costs for students,
universal free community college would have lowered costs for
students across the board. In my own home State of California,
community college fees are essentially free for low-income
students.
I want to remind folks that community colleges are not just
entities that serve as steppingstones to 4-year institutions
and transfer education, many students complete their associate
degrees, or even shorter-term certificates, say in culinary
arts, for a fraction of the cost that that same culinary arts
program might cost at a for-profit institution.
I know because I had a student that tragically was saddled
with tens of thousands of dollars in debt when he could have
done that probably for free at the community college with his
Pell Grant. Given the fact that free community college was
stripped from the reconciliation package, we have to look at
other ways to address costs for students and institutions.
The average debt for a college graduate from my public
university is roughly $32,000.00 nationally. The average amount
of debt for a graduate of a for-profit college is roughly
$60,000.00. Now Dr. Cellini, at the Cal State San Bernardino, a
public college from the Cal State system in my own home State,
is making strides to ensure that students are graduating with
manageable debt.
Does it surprise you that the average undergraduate debt
load for a CSUSB student that receives Pell is roughly
$10,000.00?
Ms. Cellini. It does not surprise me that public
institutions, particularly in California, are doing a good job
of keeping costs down for students. That sounds like pretty low
debt for a public 4-year degree for a bachelor's recipient
overall. We know that in other sectors it's much higher as you
mentioned.
Mr. Takano. I mean obviously the California taxpayers
support and subsidize this education, but it is possible to I
think produce an affordable undergraduate experience. Can you
share the highlights of your research regarding the Bennett
Hypothesis?
Ms. Cellini. Sure. I have looked at the Bennett Hypothesis
in the for-profit sector in particular, and that is where we
see most of the evidence to be strongest on the Bennett
Hypothesis. My research with Claudia Golden looked at non-Title
IV programs, and Title IV programs.
We looked at similar programs, similar length, as apples to
apples as we could get, programs that have Title IV and
programs that did not have Title IV, both for-profit sector
programs. The ones that got Title IV had tuition that was about
80 percent higher than the ones that did not participate in
Title IV programs.
We see it in the for-profit sector. In other sectors my
reading of the research is that it is more mixed. One study
recently by Luca, in fact, found that in the for-profit sector,
the tuition increase and its response to Federal student aid in
cost was four times higher in the for-profit sector than in the
public sector. I think that is where I see the research that it
is just much stronger in the for-profit sector than others.
Mr. Takano. It is important to understand that the
Hypothesis, the Bennett Hypothesis really provides us with a
stark insight into the for-profit sector. It is a bit more
questionable when we apply it to other sectors of higher ed.
Ms. Cellini. Yes.
Mr. Takano. I am committed to strengthening the
accountability for this for-profit sector, and providing strong
data on student outcomes to prevent unrepresented students from
being targeted by this unscrupulous sector. Now my Republicans
colleagues often decry that focused oversight of the for-profit
sector as a witch hunt.
However, the research shows, and your research shows why we
need to be concerned. The for-profit programs are often
significantly more expensive, as you said, what was it? Four
times as much? Four times as much than similar programs offered
at public schools, and my experience with that culinary program
at the community college level is that the case in point.
College completion rates for for-profits are consistently
lower than those in lower sectors. I have got to tell you. It
just really broke my heart when my student told me how much
debt he was in because he comes from a low-income family, and
we could have provided that same training, that same experience
at a community college for just a fraction of that cost, and
maybe even free. Madam Chair, or Mr. Chair, I yield back.
Mrs. Foxx. Thank you, Mr. Takano. I would like to welcome a
group of very young learners who have joined us today. Would
you all stand up so we could see you and applaud you for
joining.
[Applause]
Mrs. Foxx. We are so pleased to have you here, and we will
be on our P's and Q's to make sure we behave. Mr. Grothman, you
are recognized for 5 minutes.
Mr. Grothman. Yes. We will start off with Dr. Gillen. A
common argument we hear with regard to rising prices is because
of State disinvestment in postsecondary education. You
mentioned in your testimony how State funding has actually gone
up over time. Can you elaborate on this, and in fact as I
understand it states have increased this funding, so who is the
culprit when it comes to tuition and inflation we have seen
over the last few decades?
Mr. Gillen. Yes. A lot of people, when you focus on public
universities, will argue that tuition has to go up to make up
for cuts in State funding. If you adjust for inflation, State
funding has actually gone up. There is a very influential
report out that that does not adjust for inflation. Everybody
sort of cites that.
Mr. Grothman. Over what period of time?
Mr. Gillen. This is from 1980 to today, so four plus
decades. Once you adjust for inflation using any of the kind of
standard metrics, it is either flat or up, so State
disinvestment is not a cause of rising prices, which raises the
question what is.
All of my research is pointing me to what is called Bowen's
Laws. I mentioned them in the written testimony, but the cliff
notes version of it is colleges will raise and spend as much
money as they can because they have got a never ending goal to
pursue educational excellence, prestige, influence.
As a result of that, whatever revenue source they can grab
revenue from they are going to, whether that be tuition,
whether it be State funding, whether it be research dollars,
whether it be commercialization, whether it be athletics. They
are going to try to maximize revenue from any given revenue
stream they have regardless of what is going on with the
others.
Mr. Grothman. In other words, if they have access to money
they will spend it?
Mr. Gillen. Yes.
Mr. Grothman. Okay. Just a general question. This even goes
back to when I was in college. It seems to me that a relatively
high percentage of people who work for colleges, and I am
talking the white-collar jobs, not maintenance and that sort of
thing, are what I call non-teaching personnel.
Could you comment on what is going on over time there, and
the percentage of people we have working in colleges, not doing
research either, other source of advising sort of jobs, that
sort of thing?
Mr. Gillen. Yes. There has been a bit of a brewing
rebellion over what is called the administrative bloat over
precisely this issue. It has been a problem for a very long
time, and I think it is very real. There is actually some
evidence the number of non-teaching staff on university now
outnumbers the number of teaching staff, which is bizarre for
an educational institution to have that kind of staff ratio.
Mr. Grothman. Right.
Mr. Gillen. Yes, I think it is definitely concerning.
Mr. Grothman. Could you repeat that? Just you are saying
that there are some studies who have shown that in some
universities the number of non-teaching personnel outnumber the
number of teaching personnel. I will believe that. I just want
you to repeat it.
Mr. Gillen. Yes. Yes. That is correct.
Mr. Grothman. Okay. I will now ask Mr. Horn. One of the
biggest problems that students face today when they decide to
go to college or not, is they do not fully understand the
financial responsibility they are embarking on. You mentioned
how students can use student loans as free money, and quite
frankly at least some college advisers encourage that.
Free money instead of something needing to be repaid.
Before committing to a student loan, students must see the
whole picture on how much money an average graduate from the
school must pay back, and how much money they are likely to
earn in the future. What could be done to give students the
opportunity to make sure that borrowing choices are the right
ones for them academically and financially?
Mr. Horn. Yes. There are two components of this, right? One
is on the student side, and there is lots of documented
evidence that colleges mislead students with a variety of
linguistics on admission's letters to confuse them around the
actual price that they will be paying, and the obligation.
One is sorting that out. Second, frankly colleges, as Dr.
Cellini was saying, have a much more macro view of the future
of students in many cases. They can see things and have more
perspective than students coming into higher education often
do. Having colleges sign up for risk sharing on those loans as
Dr. Gillen has laid out, would make a lot of sense because it
would align incentives so that they are working with students
and taxpayers on this, and not misleading them.
Mr. Grothman. I have talked to, in my district, leaders in
the field, and do you find any effort being made by the
colleges to discourage students from taking out any more debt,
or are they even legally able to do that?
Mr. Horn. Colleges often talk about how students take out
more debt than they wish that they would, but they do not
actively take a role in helping them think through those--what
those commitments will mean in the future.
Mr. Grothman. Okay. Thank you.
Mrs. Foxx. Thank you, Mr. Grothman. Ms. Jayapal, you are
recognized for 5 minutes.
Ms. Jayapal. Thank you, Madam Chair, and thank you to our
witnesses for being here today. A degree can be the key to
economic mobility for low-and middle-income families, but years
of systemic discrimination has made it harder for black and
Latino students to afford tuition, which is why 90 percent of
black and 72 percent of Latino students take out student loans.
For a whole host of reasons, these communities struggle to
repay, with black borrowers being five times more likely to
default than white borrowers. All students, including black and
Latino, could realize the full benefits of a degree if we
eliminate cost barriers for all of those who want to go to
trade school or college.
To fully address those disparities, Congress should take
steps to ensure that postsecondary programs do not leave
students in a worse economic position. Dr. Cellini, I was moved
by the testimony that you submitted, including in the need for
accountability where you focus on for-profit colleges, in
particular, for-profit schools.
For-profit schools are notorious for abusing taxpayer funds
and peddling ineffective degree programs. We can learn a lot
about a program's effectiveness by looking at default rates for
socially disadvantaged students. How likely is a black or a
Latino student to default at a 4-year for-profit college?
Ms. Cellini. Well, some of the best data on default rates
by race and institution type is done by Judith Scott-Clayton.
She looks at data on student default over 12 to 20 years, so
long-term patterns that other data cannot get at. She finds
that about 58 percent of black students, whoever attended a
for-profit college defaulted on their loans within 12 years.
Then that number was 41 percent of Hispanic students were
defaulting on their loans within 12 years.
Ms. Jayapal. Wow. Now we have to compare those default
rates to default rates for black and Latino students who have
never attended a for-profit, and how they fare at other 4-year
colleges. Do you know what those rates are?
Ms. Cellini. Yes. From her paper, what I am remembering is
that the rate for black students in the never for-profit
category, who had not attended then, that rate was cut about in
half, about 28 percent. For Hispanic students that went way
down to about 11 percent, about a quarter.
Ms. Jayapal. That is really remarkable data. It is deeply
concerning that there is a real risk for black and Latino
borrowers at for-profit colleges to default, more than any
other sector. I also find it alarming considering that for-
profit colleges enroll nearly twice as many black students as
public colleges, and a disproportionate share of Latino
students, despite being more like to have them default.
Why are students of color overrepresented at for-profit
colleges?
Ms. Cellini. Well one big reason is that for-profits can
spend a lot of money on advertising and recruiting. They spend
about $400.00 per student on advertising, compared to about
$14.00 per student in the public sector, and this does not even
include a lot of social media advertising, and internet
advertising.
I also have some research with Latika Chaudhary that shows
that for-profits disproportionately tend to spend this
advertising money in local areas with higher shares of black
and Hispanic students.
There is less data on recruiting numbers, but some evidence
suggests that for-profits may spend around $4,000.00 per
student on them. We also know that these institutions tend to
locate in higher poverty areas, where students are more
eligible for aid.
Ms. Jayapal. For-profit colleges are aggressively marketing
specifically to low-income black and Latino students, and on
average for-profits spend $400.00 per student on commercials
compared to public colleges spending just $14.00 per student.
You talked, you mentioned aggressively recruiting and there
being less data, but there is some data to suggest that they
are aggressively recruiting these low-income students as well.
For-profits are clearly aware that their programs fail low-
income black and Latino students, but they are aggressively
marketing to them because they want the Federal student aid
dollars, which is really disturbing. I am glad that the
Department of Education finalized the gainful employment rule
to ensure that students are better off than having a high
school diploma.
What can Congress do to better protect students from
predatory recruitment and economic devastation?
Ms. Cellini. Well one thing that I think that Congress
could do is to really require disclosure of things like
advertising, recruiting, marketing and lobbying expenditures of
institutions. Make that separate from student services in data
sources like the IPEDS, so that we can actually take a look at
what colleges are spending.
They might also consider restrictions on the use of Title
IV funds for those types of activities, but really, I think the
new GE proposal is incredibly important. I would also think
about if Congress is thinking about expanding the Pell Grant
program, to really make sure that that is not extended to very
low value, short-term programs, potentially in the for-profit
sector, so to be careful of the risk.
Ms. Jayapal. Thank you so much. I think it is important to
protect students and taxpayers, and Madam Chair, I ask
unanimous consent to enter into the record this article called
The Biden Administration Wipes Out 130 Million Dollars of Debt
for Students Misled by Colorado Career College.
I think this is really important in terms of where students
are, and how we repair some of the damage that has been done.
Mrs. Foxx. Without objection.
[The information of Ms. Jayapal follows:]
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Ms. Jayapal. Thank you, Madam Chair. I yield back.
Mrs. Foxx. Thank you. Mr. Banks, you are recognized for 5
minutes.
Mr. Banks. The average cost of a 4-year degree has tripled
over the last four decades. Meanwhile, in 2021 Harvard
University grew its endowment by 10 billion dollars. Dr.
Gillen, why have not schools flush with cash like Harvard, used
a small piece of their profits to lower tuition cost?
Mr. Gillen. I think it fundamentally has to do with the
nature of composition in higher education, and we have got two
Harvard teachers right here, very distinguished ones I might
add. The way you become Harvard is you accumulate a massive
endowment, and the goal is to create the perception and
hopefully the reality of high academic excellence in every
field.
The way you do that you accumulate the endowment. You do
not spend, or you do not admit everybody. You are very
selective about who you let into the college, and so you
combine this, and you have got basically a very rich
institution that is kind of cream skimming the best students,
and then we all kind of agree that it is a great school because
of that. No offense to you guys, but that might not be the
case. There might be a community house out there.
Mr. Banks. 53.2-billion-dollar endowment. I mean is that
absurd? I mean.
Mr. Gillen. Yes, there is----
Mr. Banks. I am baffled by it. Why could not that money be
used to lower tuition costs?
Mr. Gillen. Harvard absolutely could just waive tuition for
all their students if they wanted to. They could probably waive
tuition for all students in Boston if they wanted to.
Mr. Banks. Maybe throughout the entire United States of
America, 53.2 billion dollars, so why should Harvard be
entirely exempt from paying any Federal income taxes on that
53-billion-dollar endowment?
Mr. Gillen. That is a great question. I do not know. There
was a small change to an endowment tax essentially, on the
return on investment. I think it is 1.4 percent that applies to
some endowments. I do not know if Harvard is caught up in that
or not, but that law could be updated.
Mr. Banks. Really crazy. Relatedly a 2021 Heritage
Foundation report found that the average U.S. university has 45
full-time staff dedicated to DEI. Some schools pay full-time
salaries to over 150 DEI staff, meanwhile the average cost of a
4-year degree has tripled over the last four decades. That is
even accounting for inflation.
Mr. Horn, how can policymakers make sure that universities
use Federal funds to prepare their students for the workforce
instead of wasting tax dollars on DEI offices.
Mr. Horn. Well, the increase in DE and I offices is really
part of a larger trend, right? Of the administrative overhead
that Dr. Gillen spoke to earlier. Administrative costs as
complexity, and trying to be all things to all people, and all
priorities, and so forth have caused colleges and universities
to accumulate costs and spending.
If we had a more coherent policy framework on the front end
that prioritized outcomes and value for students and taxpayers,
then colleges and universities would prioritize investments
that focused on those things, and I think we would see some
real gains in terms of student outcomes and value over time.
Mr. Banks. According to the same report, universities now
have 1.4 times more DEI personnel than tenured or tenured track
history professors. Are academic departments today forced to
compete with DEI offices for resources?
Mr. Horn. As a history major, I do not know the answer
directly, but I think there is no question again that the
support structures and administrative accumulation around
colleges and universities has just driven up the spending
problem. It is very popular to talk about tuition pricing and
costs onto the student, but that is fundamentally a symptom of
costs at the university, and a spending addiction that
continues to snowball.
Mr. Banks. Yes. I think the answer is obviously yes. Dr.
Gillen, you mentioned how schools see virtually no limit to the
amount of money they spend on this kind of stuff. Non-teaching,
administrative, DEI staff have especially benefited with many
of them making over $300,000.00 annually before bonuses.
Why do colleges feel justified in tacking on these kinds of
programs when they are not tied to measurable learning
outcomes?
Mr. Gillen. Well, I think that the last part is the key, is
that we do not know the quality of colleges in most instances.
As a result, whatever faction is most powerful on any given
campus, is going to have an advantage when it comes to divvying
up the resources, so on some campuses it is going to be the DEI
offices.
On some campuses it is going to be the football team, and
so whichever faction is most powerful gets the biggest slice of
the pie.
Mr. Banks. At least the football team is bringing revenue
in for the school. With that, Madam Chair, I would like to
enter this report from the Heritage Foundation titled Diversity
University DEI Bloat in the Academy from July 27, 2021, into
the record.
Mrs. Foxx. Without objection.
Mr. Banks. My time has expired.
[The information of Mr. Banks follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mrs. Foxx. Thank you. Ms. Manning, you are recognized for 5
minutes.
Ms. Manning. Thank you, Madam Chair. I would like to
address the idea that Congress should impede students from
accessing fields of education that some may deem unprofitable.
An idea that has been raised both at this hearing, and during
other hearings held by this Committee.
In fact, the proposed Responsible Borrowing Act for
example, would allow colleges to limit the amount of Federal
loans a student can borrow based on factors like the average
salaries for program completers, and what programs students
choose.
There has been an enormous emphasis from some on this
Committee that taxpayer dollars should only be used for
students to attend programs that give them tangible job skills
to make sure they are employable after they graduate.
I am concerned that this attitude supports the devaluation
of a liberal arts education. Mr. Horn, what kind of
undergraduate degree did you get?
Mr. Horn. I received a history major.
Ms. Manning. An undergraduate history degree from Yale I
believe, and you seem to be gainfully employed. Did that
liberal arts degree give you tangible job skills?
Mr. Horn. You bet, and this is why I think that liberal
arts frankly we have over indexed at colleges, in having
students opt not for the liberal arts in many cases.
Ms. Manning. Mr. Leschly, what kind of undergraduate degree
did you get?
Mr. Leschly. Comparative literature degree from Princeton.
Ms. Manning. A BA in competitive literature from Princeton.
Did that give you tangible job skills?
Mr. Leschly. Maybe.
Ms. Manning. Did it help you get your J.D. and your MBA
from Harvard?
Mr. Leschly. Maybe.
Ms. Manning. At least it got you accepted there, did it
not?
Mr. Leschly. Fair enough, yes.
Ms. Manning. Okay. Dr. Cellini, what kind of undergraduate
degree did you get?
Ms. Cellini. A public policy degree.
Ms. Manning. A BA in public policy from Stanford, and did
that give you tangible job skills?
Ms. Cellini. Yes, it did.
Ms. Manning. Thank you. Dr. Gillen, now you have got a
degree that some people might assume gave you tangible job
skills because you have got a BBA in business. Is that true?
Mr. Gillen. That is correct.
Ms. Manning. Even though it was from the Ohio State
University.
Mr. Gillen. Yes, ``The.''
Ms. Manning. Okay. I think we have at least three, maybe
four examples of people who got liberal arts degrees that stood
them in good State, and you all seem to be gainfully employed.
Do we not want good students from poor families to have
some of the same fulsome liberal arts education that each of
you got? Dr. Cellini, would you agree with that?
Ms. Cellini. Yes. I would agree with that.
Ms. Manning. Okay.
Ms. Cellini. The access to high-quality programs is very
important.
Ms. Manning. Right. Now Pell Grants, when they were first
enacted, covered 70 to 80 percent of the cost of college, yet
today Pell Grants cover only around 30 percent of the cost of
college. This means that students on Pell Grants today have to
piece together a variety of loans, some subsidized, some non-
subsidized.
They often have to work sometimes 20 hours a week to afford
college. That can certainly impact the student's ability to
take a full course load and graduate in anything close to 4
years. Dr. Cellini, would increasing the Pell Grant to keep
pace with inflation, or even doubling it, would that be an
effective way of helping students who have no family financial
support succeed in college, or perhaps even graduate in 4
years?
Ms. Cellini. I think expansions of the Pell Grant to keep
pace with inflation and costs of tuition would be really
important for students to be able to access high-quality
education.
Ms. Manning. I want to take a moment to highlight the
proposed budget cuts being made by my colleagues on the other
side of the aisle, which have historically served to address
skyrocketing costs of education were discussing cutting--fully
eliminating the Federal work study program, Federal
supplemental educational opportunity grants, childcare access
means parents in school program grants.
The current budget proposal would slash funding for the
Office of Federal Student Aid, and of course it goes without
saying it would not double, or help the Pell Grant keep pace
with inflation. Dr. Cellini, do you think that cutting these
programs would make it more difficult for students with no
family financial assistance to graduate from college?
Ms. Cellini. Yes. It would make it much more difficult for
students to afford college.
Ms. Manning. Now we have heard a suggestion that we could
impose a system of risk sharing on colleges. I am wondering
what changes you would expect a college to make if they were
going to share the risk of a student graduating and getting a
good job. Would you expect, for example, colleges and Dr.
Cellini, I will stick with you.
Would you expect colleges to implement a better and more
accountable counseling program for students?
Ms. Cellini. I am not entirely sure how risk sharing would
change their behavior, but I do not think taxpayers should fund
low performing programs, even if there is risk sharing.
Ms. Manning. Dr. Gillen, what kind of--I think you are the
one who mentioned risk sharing. What kinds of changes would you
expect a high-quality college to make if they were to take on
this risk sharing opportunity?
Mr. Gillen. I think the best example of the behavior that
we would see from colleges is what happened at Texas State
Technical College, which is they focused very clearly on
whether or not the programs that they are offering provides
students with valuable careers. So----
Ms. Manning. You do not think that a lot of students could
benefit from things like better counseling?
Mrs. Foxx. Ms. Manning, Ms. Manning your time is up, and
you keep asking questions.
Ms. Manning. I apologize. I yield back, and I would love to
get answers to that question, perhaps in writing. I yield back.
Thank you, Madam Chair.
Mrs. Foxx. Thank you. Mr. Good, you are recognized for 5
minutes.
Mr. Good. Thank you, Madam Chairman. Mr. Leschly, our
office has received examples of accreditors cracking down on
the sincerely held religious beliefs of higher education
institutions who are going through the accreditation process.
I am sure know, the President of Sachs, the accreditor for
schools like UNC, North Carolina, announced the desire to
investigate that school for its decision to create the School
of Civic Life and Leadership, which had been unanimously
supported by their board of trustees for its emphasis on free
expression.
Just last year, the ABA adopted a new standard for
accreditation that requires law schools to provide curriculum
on bias, cross cultural competency racism education. They also
adopted a non-discriminatory policy that includes gender
identity and sexual orientation.
Then the Liaison Committee on Medical Education, which
accredits medical schools as you know, has DEI requirements in
place, and faculty and institutions, if they are in danger if
the program is failing to meet accreditation requirements if
they object to these.
Do you think it is proper for an accreditor to threaten
institutions seeking to operate according to their sincerely
held religious beliefs by forcing political litmus tests on
them through DEI requirements, gender identity, non-
discrimination requirements, things like that?
Mr. Leschly. Accreditors should not run colleges. They
should regulate the outcomes of colleges fairly and precisely.
I talked about that in my testimony. Accreditors, and I think
all regulators at the State and Federal level should be very
precise and very determined to make sure that institutions
produce the outcomes that matter most.
Then after that, they should leave colleges alone to
specialize, to evolve, and very importantly, to serve with
enormous variety and almost infinite interest among student
populations in colleges with varying interests, priorities and
designs. Since we believe in that, we would also not micro
regulate the issues that you described.
We would not require a college to have a DEI policy, or
would we object if they had one. It is their business.
Mr. Good. Within the boundaries of the law, of course, a
college should be somewhat free to be the kind of college that
it wants to be, that attracts students and parents helping
their students make decisions, focuses perhaps on academic
excellence, and academic outcomes. The accrediting institutions
should be focused on those.
Changing gears for a moment, moving toward the cost of
higher education, and this will be toward Dr. Gillen, rather.
Dr. Gillen, a 2022 GAO study found that direct loan program has
cost taxpayers approximately 200 billion since its inception,
largely due to the generous forgiveness and repayment options
for borrowers in the IDR plans.
80 percent of parents report that 4-year schools cost too
much, and 50 percent say 4-year schools are inaccessible to
middle class Americans. A Wall Street Journal survey this year
found that 56 percent of graduates from college were not worth
the cost due to lack of job skills obtained, and the high debt
in return.
The Biden administration, of course, is doubling down on
their student loan transfer scheme. Congress voted to end that.
The Supreme Court declared it of course, unconstitutional, and
yet he is trying to do it through other mechanisms as we know.
This, despite the fact that a 2017 study showed that an
economist at the New York Federal Reserve found that colleges
raised tuition costs by 60 cents for every dollar in increased
Federal loan subsidies.
To you Dr. Gillen, does loan forgiveness--has it been
demonstrated to decrease costs, or would it decrease costs?
What have you found or seen?
Mr. Gillen. No. I think it would do the opposite actually.
If you have the anticipation, or the actuality of widespread
loan forgiveness, that is going to do a couple things. On the
student side, students are going to borrow as much as possible.
Right now, most students actually do not borrow because
most students are going part-time, and so the majority of
students that borrow, that is going to change. If nobody has to
repay loans, everybody is going to borrow, and they are going
to borrow as much as they can.
At the same time, the school is going to look at the
students with all this cash, and they are going to say well, we
could use some of that, and so they are going to raise prices,
and they are going to cut their other aid.
The loan forgiveness is basically going to exacerbate the
student loan debt problem in the sense that we would have even
higher debt until right after it was forgiven, because it would
so skew the incentives of both the students and the schools.
Mr. Good. I think you are exactly right, and the
President's plan thankfully overridden by the Supreme Court,
despite his efforts to try to find other avenues there. 60
percent of the people in my district don't have college
degrees.
His student loan transfer scheme to them would have to pay
for it would apply to families making up to $250,000.00 a year,
which is far beyond the average income within folks in my
district, and most districts throughout the country, I am sure.
With that, I yield back, Madam Chairman.
Mrs. Foxx. Thank you, Mr. Good. Mr. Courtney, you are
recognized for 5 minutes.
Mr. Courtney. Thank you, Madam Chairwoman, and thank you to
the witnesses for being here today. Again, I think this topic
is the highest relevance to this Committee.
I have been on it for a while, and I was around in 2007
when the College Cost Reduction Act, a bipartisan bill that was
signed into law by President Bush was signed, that cut the
interest rate from 6.8 percent to 3.4 percent over a 5-year
period, established the Loan Forgiveness Program, as well as
the income-driven repayment program.
Five or 6 years later in 2013, again, another bipartisan
effort, the Student Loan Certainty Act was passed.
Congresswoman Foxx's predecessor, John Kline and I were in the
oval office when President Biden--sorry, President Obama signed
that measure into law, which blocked what would have been a
jump to 6.8 percent interest on Stafford loans and set the new
10 year note index that is in place here today.
I say that because we are right now on the brink of a
cliff. Starting on October 1, despite all of the talk about
President Biden's--it was only a partial loan forgiveness
measure, whatever. I mean, all those student loans are going to
snap back.
Some of them with very high legacy interest rates on
October 1st, and also incoming freshmen who are about to start
their college careers, are looking at 5.5 percent interest
rates on Stafford loans for this year.
Again, with the 10-year notes going up plus two, which is
the formula that is in place today, and so we are really, we
are just going to start this treadmill for borrowers in October
for both old borrowers and new borrowers.
It is incumbent, I believe for us, to act as a congress,
and certainly this Committee has an essential role to doing
that. If you look at a kid who's at 5.5 percent interest, the
average student loan debt is about $26,000.00 on average.
Across where it is today, in terms of the portfolio that
exists, that is about 7,800 bucks of added costs per interest.
That is money that goes into the Federal treasury. That is a
windfall for the government. It was never the intent of Senator
Stafford, that this was going to create an income generating
program for the treasury.
I think it is time for us to get off that treadmill. Again,
the problem is who takes the head? The student who pays the
interests, or the taxpayers that would take the head if you
eliminate interest because obviously that hole has to be
filled.
Well today, myself and Senator Peter Welch in the Senate,
are introducing the Interest Elimination, Student Loan Interest
Elimination Act, which again basically zeroes out interest
across the board. It is paid for, however, and not with taxes.
What it does is establish a trust fund where principal balance
payments are deposited.
Again, administered by a board of trustees, and that would
then be invested in low interest, low risk securities to
generate enough income that would again pay the costs of not
having interest payments going into the treasury.
It is a model which exists today for the railroad
retirement fund, which is a completely solvent pension program
using exactly that type of approach, and that program by the
way is solvent for the next 25 years in terms of doing that.
It has other mechanisms in terms of accountability, in
terms of restricting eligibility for colleges and universities
to get grants if their tuitions rise above an unacceptable
level. If it generates a surplus, then there is actually a
provision in the bill to divert and invest that money into Pell
Grants that are there.
This gets us off this train of interest. It does not
excuse, it is not loan forgiveness, you know, people still have
to pay their principal levels in terms of their loans, but it
gets us out of this interest trap, which again with the
interest recapitalization metastasizes the costs, the level of
debt for students to a point where they owe more than the loans
they actually took out.
With my limited time Professor Cellini, maybe you could
just sort of comment in terms of this issue of interest.
Ms. Cellini. Yes. It sounds like a very interesting
proposal. Yes. We know that students will face a cliff when
they start to repay. I would just caution that thinking about
which programs have access to those loan programs, just to make
sure that taxpayers do not pay for, even with no interest, that
they do not pay for low performing no value programs.
Mr. Courtney. That is exactly the intent of this.
Ms. Cellini. That is right.
Mr. Courtney. We did it very carefully to avoid that
dynamic, which in the past has always been how you pay for it.
We are not doing that with this, and I would ask again, USA
Today article on this program, this bill, be introduced into
the record please, Madam Chairman.
Mrs. Foxx. Without objection.
[The information of Mr. Courtney follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mrs. Foxx. Ms. Houchin, you are recognized for 5 minutes.
Ms. Houchin. Thank you, Madam Chair. Thanks to the
witnesses for testifying before us today. I appreciate your
time. In alignment with this Committee's continued effort for
innovation in the higher education policy space, I want to hear
from some of you about the ideas that this Committee is
considering in their Higher Education Act reauthorization.
Dr. Gillen, I really appreciated your testimony that you
submitted in writing. I can relate to that as both a parent of
a college student, and as a former graduate student who took
out some student loans to afford my graduate education. When I
submitted the paperwork to get a student loan I was asked a
question, how much does it cost?
Then the answer is oh, we will pay whatever the cost is. I
am harkening to your Bowen's Law that you referenced, in the
quest for excellence, prestige and influence, there is
virtually no limit to the amount of money an institution could
spend for a seemingly fruitful educational end.
Under Bowen's laws, government subsidies do not reduce the
price to the consumer because the subsidy allows colleges to
raise and spend more money. Under Bowen's law, subsidies have
the counter intuitive effect of increasing the cost of
providing the good or service, rather than reducing the price
of the good or service for the consumer.
That has certainly been my experience, both as a student
loan borrower, a parent, and a taxpayer, so thank you for your
research. I do want to ask you about the Plus Loan program. The
Plus Loan program allows graduate students and parents of
undergraduate students to borrow nearly unlimited sums as the
only cap on the amount of loans someone could take is whatever
the college says it costs to go there.
And surprisingly, multiple studies conducted by economists
and policy experts across the political spectrum conclude that
these loans have substantially contributed to the rapid
inflation of college prices over the last few decades. The
result has been billions in loan forgiveness for graduate
students, and financial ruin for some low-income parents.
What, if any, justification is there to continue the Plus
Loan program.
Mr. Gillen. I do not think we need the Plus Loan program
because it is duplicative of the Stafford Loan program. We have
already got the Stafford Loan program. If we want to make some
changes to that we can. The Stafford Loan program is better. It
has got annual and aggregate limits.
It has got safeguards. That is completely lacking for the
Plus, both on the grad and the parents' side. I have seen some
people argue that Parent Plus was originally only designed to
allow people to borrow up to expected family contribution. That
got lost by the wayside.
Then originally, grad students could not take out Plus
Loans, but then they were allowed to because we thought it
would create money we could then spend. That has not worked out
either. This has kind of been a disaster of a program from the
start.
Ms. Houchin. I am glad that you mentioned the Stafford Loan
program. If we were to eliminate the Plus program, what reforms
to borrowing limits under the Stafford Loan program should we
examine?
Mr. Gillen. Right now, a graduate student can borrow up to
$20,500.00 from the Stafford Loan program. There are probably a
few cases where that is not enough, so I think it is something
like medical school tends to be very expensive. You might want
to increase the borrowing limit in special cases like that.
I would also recommend just an aggregate limit based on the
credential as well.
Ms. Houchin. Okay.
Mr. Gillen. It does not make sense to me to have the
$138,500.00 limit for a doctoral degree, which can take up to a
decade, and also a master's degree, which some of them will
only take a year.
Ms. Houchin. Okay. Thank you. Then do you think the
potential elimination of Plus Loans for graduate students would
make higher education less accessible for low-income students
looking to further their education? If we eliminate Plus Loans
for graduate students, would that make the education less
available to low-income students?
Mr. Gillen. I do not think so. Only about a sixth of
graduate students even take out grad Plus Loans, so most of the
borrowing is already done in the Stafford Program, so you are
not going to see much decline in access there. Particularly for
graduate students, the Plus Loans, or the parent Plus Loans are
not an issue.
If there is any decline in access due to getting rid of
Parent Plus, that can be easily remedied.
Ms. Houchin. Finally, Dr. Leschly, or Mr. Leschly, it is
not often we hear of a new accreditor forming. What were some
of the reasons you decided to create the Postsecondary
Commission?
Mr. Leschly. A lot of the motivation originated in my
colleagues, and I observing and being frustrated by the lack of
attention paid to magnificent open admission institutions that
served high need students.
In these places remarkable results can hide in plain sight
unless we pay attention carefully to measuring their
contributions. The inverse is when selective institutions are
reflectively applauded for the outcomes of their students, even
though that may have mostly to do with these very particular
admissions offices that they have.
The original of this idea, Congresswoman, was to take very
seriously how to measure fairly and precisely the contributions
that institutions make to this thing that almost every student
needs so desperately, which is a better economic future.
Nowhere is that more important than in institutions that serve
high need students.
Ms. Houchin. I agree. Thank you so much, Madam Chairman, I
yield back.
Mrs. Foxx. Thank you. Mr. Sablan, you are recognized for 5
minutes.
Mr. Sablan. Thank you very much, Madam Chair, and good
afternoon and welcome to all our witnesses. An educated
society, from all time improves everybody's lot in life. It
promotes relationships, it promotes economies, it promotes very
smart people get together and discuss very difficult things,
right?
That is what an education strives for, whether it is a
difficult thing, of how to connect with the number in this
corner, or clinical applications of your education. I would
think that we all benefit from the programs, the Federal
student aid programs that are available to those who qualify,
who need the program to move forward and get a good education.
Of course, not everybody goes to, you know, gets a good
education, but as many as we can. One of those programs is the
Pell Grant, and I am a true supporter. I am a strong supporter
of the Pell Grant because it is important as we can see all
throughout the country, such that we--I supported the
increasing the maximum award of Pell Grants twice in the last 2
years, and because the Pell Grant is so, so, very important to
my district, where about 1,000 students attend the community
college there, and typically covers the cost of tuition.
If we were to sort of tear down some of the programs
because, like the majority, my Republican colleagues here are
proposing to, next year, cut student budgets by the President's
submission of Fiscal Year 23 budget. It is going to get level
funding, or actually it is even going to get a modest decrease.
What happens to the programs, I mean besides continuing
resolution, what happens to the programs. The agencies that
administer those programs, for example the FSA, those agencies
who collect this debt. We have seen it before. I was here
before in 2013, there is a problem.
What happens to those, and moreover, what happens to those
students who want to go to school, who should go to school, and
yet do not have the resources to do it because we have all
these new ideas of how to reduce their funds, their student aid
program. What happens to our community, the investments we have
done so far that made us the greatest nation on earth?
It was not just from legacy admissions in colleges, was it?
There must have been--we must have done something right, and I
think we did something, we are doing some things right. We
should not do very much to hurt it. Dr. Cellini, I do not know
if you have an idea of what I am trying to say, but what would
it look like to schools if there is no, for example, just one,
Pell Grant were reduced, or the value removed?
Ms. Cellini. I think that would be really devastating for
millions of students if Pell Grants were removed. They are
incredibly important for low-income students to afford college.
Mr. Sablan. Even institutions, right? There are
institutions who absolutely--they are profit institutions, for-
profit colleges that make a lot of money.
Ms. Cellini. In the for-profit sector, that is where we see
problems predominantly, but not exclusively. I think we--it is
incumbent upon policymakers to ensure that the Pell Grant does
not go to programs that have very low value. That is very
important.
Mr. Sablan. Thank you. I yield back, Madam Chair.
Chairman Owens. Thank you. I would like to now recognize
Ms. Chaves-DeRemer.
Mrs. Chaves-DeRemer. Thank you, Chairman Owens. It is nice
to see you holding this important hearing and thank you to the
witnesses for being here today. Today's hearing highlights a
serious issue, which current and former students have known for
a very long time.
Our universities have become complacent. The current system
has rewarded their bad behavior, and graduates have been paying
life-altering consequences as universities raise and raise and
raise their prices. Why would they not? The loan system is
built to benefit the universities, not the students. It might
have well been designed by the financial departments really at
the schools.
These institutions do not have to pay any consequences for
loading young students with an insane amount of debt. Rather,
it is the students and taxpayers who are forced to shoulder the
burden of mounting debt, even though colleges are directly
responsible for the cost and quality of the education they
provide.
Graduates are delaying starting families and cannot save up
to buy homes because of the predatory practices of universities
charging students exorbitant amounts for degrees, with really
little to no financial value.
I believe universities know full well that engineering
students will graduate with higher paying jobs, than maybe say
an English major. Just like the University of Columbia knows
that piling nearly $200,000.00 in debt onto film majors making
$30,000.00 a year, it really is not commensurate, and it is
really criminal.
Tuition should reflect the expected return on investment
that the degree provides graduates in the workforce, not some
arbitrary number that boosts colleges bottom line. If it did,
maybe it would not be the case that a quarter of the bachelor's
degrees, and nearly half of master's degrees leaves students
worse off if they ever enrolled even in the first place.
Dr. Gillen, in your testimony you mentioned that the return
on investment metrics, such as those in the Pell Act, could be
used to determine the extent to which colleges should be
financially responsible, or financially rewarded for their
students' outcomes. Can you please elaborate to me,
specifically, on this concept or risk sharing for student
loans?
Mr. Gillen. Yes. You can tie in a return-on-investment
metric with risk sharing, and that will basically allow you to
evaluate whether a program is high return, low return, and then
either provide performance bonuses if it is high return, or
sanction it if it is low return.
The risk sharing you can do on its own, but you can also
tie it into this return-on-investment metric.
Mrs. Chaves-Deremer. Okay. Could we require these same
universities for programs with low returns on investment to
take on a percentage of the graduate's debt?
Mr. Gillen. Yes. You could actually do that, and this is
sort of what we had in the college co-sign the loan is all
about. It is something the college co-signs the loan, they are
on for 100 percent, but you could set the percentage at
whatever you want.
You could say okay, the college is on the hook for 50
percent of whatever the student does not repay.
Mrs. Chaves-Deremer. Ensuring that these schools have to
pay similar consequences if they continue to force financial
hardships on the students, would that ensure that?
Mr. Gillen. Yes.
Mrs. Chaves-Deremer. What would be the impact on tuition if
something like this were put in place?
Mr. Gillen. I think we would like to see tuition decline at
some schools and some programs, and the reason for that is if
you are a college that is offering a program that is just on
the cusp of being a higher return or a low return, you have got
a lot of leeway. You could probably cut a little costs, you can
cut some staff if you need to.
Particularly low return programs would likely see a decline
in price. We might see students shift into higher return
programs, so like once this information is out there, students
might say well I am going to go into this higher return program
instead of the lower return.
Depending on the capacity, that could have price
implications for the higher return programs, but as time goes
on competition would kind of ensure that prices remained pretty
reasonable.
Mrs. Chaves-DeRemer. Okay. That is good. I feel confident
then in saying that a large group of us on this Committee agree
with what you have said today, so Mr. Chairman, I yield back.
Thank you.
Chairman Owens. Thank you. Thank you so much. I would like
to recognize Ms. Bonamici. Thank you.
Ms. Bonamici. Thank you, Mr. Chairman. I have some specific
questions, but first I want to point out a couple of
fundamental big pictures issues I think that we can use when we
frame this conversation. The first is education a public good
or commodity? The second is are we going to eliminate, or
further blur the difference between education and job training?
Both important, but not the same. I also want to challenge
the notion that was brought up earlier in this hearing that for
some reason diversity, equity and inclusion might not be
relevant to preparing students for the real world of work. I
want to dispute that because DEI programs are often used for
example, first generation students, for veterans with PTSD, for
students with disabilities.
DEI programs can help. Here is a great explanation.
Encourage critical thinking, help students learn to communicate
effectively with people of varied backgrounds, which I suggest
people in this building could benefit from as well. I want to
push back on the notion that they are somehow not related to
preparing people for the real world.
I want to followup on Representative Grothman's question to
you, Dr. Gillen. You have a paper in which you wrote that
states disinvestment in higher education as you called it, a
myth. Dr. Gillen, do you agree that disinvestment in this
context means reduction of financial resources?
Mr. Gillen. Yes, in the conventional wisdom, yes.
Ms. Bonamici. Right. Okay. In 2022, 28 states provided less
funding for students at State universities than they did in
2008. Ten of those states funded higher education at least 20
percent below 2008 levels, so if we go back a little further to
2001, 36 states have reduced their level of funding in today's
dollars. These states clearly reduced their investments in
higher education in the past 20 years.
If 36 states have reduced their funding for public
universities and inflation adjusted dollars. Does this not meet
the disinvestment definition?
Mr. Gillen. 2001 was--before this year, it was the peak
funding, and you generally do not want to kind of compare a
peak to some other random because random----
Ms. Bonamici. Well, my point is that many states have
disinvested, and from 2008 to 2018 4-year public college
tuition rose on average 38 percent in inflation adjusted
dollars. Your research claims that there is no direct
relationship between this disinvestment by states and increases
to tuition. I strongly disagree with that, particularly as a
former State legislator.
Research from the non-partisan State Higher Education
Executive Officers Association, SHEEO shows the opposite,
they've held a direct correlation between decreasing education
revenue and tuition. So according to SHEEO, the states that,
excuse me, the student's share of an institution's revenue
increased from 28.9 percent to 42 percent, and including--or
excuse me, excluding Federal stimulus funding.
This is what the report said. Do to declines in education
appropriations and net tuition revenue increases, this data
clearly shows that colleges relied on tuition revenue increases
to recoup losses suffered by declines in State funding. Again,
I served in the State legislature. I saw universities forced to
raise their tuition after State disinvestment.
Right now, at the beginning of this year, my State was
number 39 out of 50. I just want to make clear that your data
may be hurting students, institutions, and taxpayers, who rely
on State funding to support a strong higher education system.
Dr. Cellini, why is it important to address State
disinvestment? Why should that be part of what we are talking
about to discuss issues of costs to students and institutions,
and how do claims of disinvestment hurt students, institutions
and taxpayers?
Ms. Cellini. Yes. Well, we know that states are primarily
responsible for funding community colleges, which are very low-
cost institutions that have generally----
Ms. Bonamici. I am a community college graduate myself.
Ms. Cellini. Better yes, better earnings outcomes than
programs in, for example, the for-profit sector. My own
research has shown that the earnings gains in community college
programs are much higher than the earnings gains in for-profit
programs for similar programs, for similar students, looking at
similar students with similar prior earnings.
We know that those are great investments, and low-cost
options for students.
Ms. Bonamici. Thank you, Dr. Cellini. I want to agree with
the Ranking Member Scott that often times there is value that
cannot be assessed or measured in higher education. I want to
make clear I do not agree with the notion that whether a
student got a good education should be measured by their post-
graduate earnings.
If someone joins the Peace Corps, or works for a non-profit
organization, or becomes a teacher, they are not necessarily
going to have high earnings, but they are doing incredibly
valuable work. That does not mean that they did not get a good
education. That being said, Dr. Cellini, you talked about
imperfect information. I support the bicameral bipartisan
College Transparency Act.
How could Federal policymakers better promote communication
of outcomes data that is privacy protected, and includes
multiple measures of student success, including completion
rates. Are there successful examples either in the public or
private sectors that we could model when it comes to good
consumer information?
Ms. Cellini. Well, I will mention that in the new Gainful
Employment proposal by the Department of Ed, there is a new
requirement to have information available on high debt, low
earning programs that students will need to acknowledge, and
this is across beyond just the non-degree programs, and career
training programs.
Ms. Bonamici. Thank you. I am being gaveled down, so I
yield back. Thank you, Mr. Chairman, sorry I went over.
Chairman Owens. Thank you so much. I would like to now
recognize Mrs. McBath.
Mrs. McBath. Thank you so much, Chairman Owens, and Ranking
Member Wilson, and to all of your staff for this really
inciteful hearing today. Thank you to all of our witnesses for
taking your time to give us information and knowledge.
Like the title of today's hearing suggests it's so
important we really take action to increase the value of higher
education, even further and to ensure that taxpayers are
getting the quality return on their investment by ensuring that
these Federal programs are focused in the areas, that are
proven, and to get the students where they want to be, which is
to get good careers, good salaries, and a better quality of
life for themselves and for their families.
I am very excited about the discussions that we have been
having here on the hill about this very thing, about expanding
Pell eligibility to short-term credentials, and certification
programs, like those that are offered at Gwinnett Technical
College, which is in my district, Georgia's 7th congressional
District.
We need to make sure that this expansion is done right. We
need to really take our time and make sure that we are doing
our students justice, and that what we do solves the problems
that we are trying to address today. We must ensure that any
expansion be targeted to outcomes that are--that they are based
in programs that are actually proven to work, that they are
efficient and effective for our students going forward.
One of the main reasons that we are actually having these
conversations is because our current system is not addressing
the needs of our students, or businesses who need to be able to
hire the specialized workforce.
If we do not ensure that those investments are targeted
programs that are proven to work, you know we truly risk
doubling down on the strategy that is not producing the
workforce that we are going to need going forward to compete
globally in the 21st Century.
If we are going to expand the number of programs that are
eligible for Pell, we also need to make sure that there are
ample resources to go around to provide for this increased
demand. We need to be increasing the maximum award as well as
expanding Pell's eligibility for short-term programing, and I
will be working to make sure here on the Hill, going forward,
that we take into account these kinds of things in the final
products when they are signed into law.
Again, I am very excited that Chairwoman Foxx, and Ranking
Member Scott, and the Committee are taking steps to address
this issue, and I hope that we continue to go forward in a
bipartisan manner to do the very same because we need to make
sure that a larger authorization of the Workforce Innovation
and Investment Act.
And so, Dr. Cellini, my questions are basically for you
today. You have done extensive research on short-term career
focus programs. Your work has highlighted that with current
accountability oversight, many short-term programs are not
adequately preparing students for gainful employment.
It is particularly concerning that without targeted
outcome-based financing, the short-term programs outcomes are
worse for students of color and low-income students. Given the
various proposals to expand the Pell Grants, some were talking
about this all the time on the Hill, expel Pell Grants to
short-term programs that we are considering.
Why is it important for Congress to consider trends in
student outcomes, and what specific accountability measures do
you believe are essential when we are considering oversight of
these short-term programs?
Ms. Cellini. Thank you. I think Congress should ensure
again that only the highest performing short-term programs can
access the Pell Grant. My research has been on some of these
short-term programs that currently are actually eligible for
Federal student loans, and I found that half of those programs
had earnings below the average earnings for high school
graduates, which might be a counter factual against to measure
what they might have made in the absence of that program.
Most of those programs that were below that high school
average threshold, 96 percent of those were in the for-profit
sector. Currently, there is something called a 70/70
requirement that requires 70 percent completion rates, and 70
percent job placement rates to be eligible for those loan
programs, and that's simply not enough accountability.
Both of those metrics can be manipulated by institutions,
and there are just not adequate protections. I would advocate
an earnings premium type metric that compares the earnings of
students in those short-term programs to a counterfactual of
what it might have been had they not gotten something like a
high school earnings benchmark.
Mrs. McBath. Well, thank you very much. You know, I live in
the State of Georgia. I represent the State of Georgia, and we
have just had millions of dollars that have been cut from our
university and college system, and so I am very, very concerned
about the education of our students.
They will have needs, and I am really glad that we are
talking about this today because we have to find organic,
holistic ways to make sure that our students needs are met, so
that we can globally compete, and that they too, have the
ability to be economically viable through academics. Thank you,
and I yield back.
Chairman Owens. Thank you. I want to once again thank the
witnesses for a remarkable opportunity to hear from you, the
innovators. I would like to recognize Ms. Wilson for her
closing remarks.
Ms. Wilson. Thank you, Mr. Chair. As we close this last
Education Committee hearing until after August recess, let us
review what we have accomplished so far. This year we have held
20 hearings. 20. We sit here after 20 hearings, after doing
absolutely nothing to address school shootings. There have been
23 school shootings so far this year alone, and this is just
July.
We are the Education Committee, and we have done nothing to
ensure that hungry students in our classrooms and college
campuses have access to food so that they can learn and not
worry about going hungry.
Since food is necessary to live, it should be free for all
students who cannot pay. We are the Education Committee in
Congress, and we have done nothing to empower teachers or
address the dangerous teacher shortage that is looming. My
bipartisan American Teacher Act with 75 cosponsors would solve
that problem, but it is not on the calendar.
We are the Education Committee, but we have done nothing to
address college affordability in ways that are proven to make
college more affordable. Instead, we as a Committee, have
chosen to attack anyone giving students the relief they
deserve. I introduced the LOAN Act, precisely to make college
more accessible and affordable. It is not on the calendar.
Yes, we are the Education Committee, but we have done
nothing to protect the American people and the workforce from
exploitation and multi-national corporations that overwork and
underpay them. I joined the Ranking Member, Mr. Scott, on the
PRO Act, which would protect people's right to organize.
Yes, we are the Education Committee, and we have done
nothing to address the minimum wage since 2009. Can you believe
that the Federal minimum wage sits at $7.25? Disgraceful. You
cannot even go to McDonalds and get a big Mac combo with that
level of compensation.
Democrats on the other hand, continue to push on $17.00 an
hour minimum wage. You see, this is the Education Committee.
Instead, what has this Committee focused on? We have
antagonized the very students we are tasked with protecting
from students of color to LBGTQ+ students.
We have brought our students from the freedom to pursue
their intellectual passions, through book bans, and restricting
their educational curriculum. We have focused on culture wars
that will not do a damn thing to help any hard-working
Americans, or our students, all just to please a small group of
extreme MAGA Republicans who funnel money into Republicans
pockets at the expense of everyday Americans who cannot afford
to purchase a politician.
In September, Mr. Chair and Committee, I genuinely hope we
address the needs of our country because they are immense, and
we do not have time for two more years of culture wars while
our students and American workforce needs our support. I yield
back.
Chairman Owens. Thank you. First of all, I want to thank
you. This is probably one of the most important phases of
changing the trajectory of our country that we have. That is
our education. Our founders understood the importance of that.
It was Thomas Jefferson who said, ``Ignorant and free can never
be.''
They began our country understanding that only an educated
and engaged people can be a free people. I was blessed. I was
raised as a child in Florida, and my dad was a college
professor for 40 years. I did see his frustration though, about
30 years ago when he recognized the poor preparation of kids
coming into his classrooms and the pressure of deans to pass
them through regardless of that.
Because he had an option of being an entrepreneur, he
decided to leave industry. I do want to say this, once put back
in place, let us focus on getting our kids to think, to be
optimistic, to be thankful for the opportunities. We will get
our Nation back. I have lived it.
I watched in the 40's, 50's and 60's when the black
community during the segregated days, because we believed in
education as a gateway. We believed that entrepreneurship and
thinking and engagement would give our community a way of being
respected, and it was, as we led the country, and we grew the
middle class.
We led the country in college with a percentage of
entrepreneurs, all because we were a thinking people. I was
excited to see and hear different words today because what we
need to do is realize our education system is broken. Thank
goodness for innovators like yourself, those who are not just
willing to go along.
We have pushed the boundaries to figure out how can we get
our kids really thinking again and successful again. To hear
words like transparency, innovation, risk taking, which was
never heard back in education, performance based, which you
never heard about in education.
How about cosigning loans? My goodness. Declining tuition,
ejecting non-profit courses, and a level playing field. I know
that my colleagues on the other side of the aisle like to glean
profit colleges, just know all we are asking for across the
board is a level playing field.
Use the same standards. Whatever those standards are for
success, profit and public should have the same opportunity to
prove that they are the best in the game. If they cannot pull
their weight, then you do something else that is across the
board. Our kids should be our priorities.
I am excited to have these conversations. I am excited by
the fact that thank goodness the Republican party now is the
majority conference, so these kind of things will be happening,
and we will be focusing on how our kids can make sure that
instead of going in the direction it has been the last two
decades, that we are going to get our act together, and have
them when they leave whatever decision or way they want to be
education, they can go out and succeed in that area.
I want to thank you again for your expertise, your time
taking out, continually please to share with us your
innovation. We now have a Congress that wants to legislatively
be innovative in that process. We need your help to do that.
Thank you so much for that.
I would like to again thank the witnesses for taking the
time to testify before the Subcommittee today. Without
objection, there being no further business, the Subcommittee
stands adjourned. Thank you so much.
[Whereupon at 12:29 p.m., the Subcommittee was adjourned.]
[all]