June 03, 2015
SEN. LAMAR ALEXANDER
SENATE COMMITTEE ON HEALTH, EDUCATION, LABOR AND PENSIONS
SEN. LAMAR ALEXANDER HOLDS A HEARING ON REAUTHORIZING THE HIGHER
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SENATE COMMITTEE ON HEALTH, EDUCATION, LABOR AND PENSIONS
HOLDS A HEARING ON REAUTHORIZING THE HIGHER EDUCATION ACT
JUNE 3, 2015
SEN. LAMAR ALEXANDER, R-TENN.
SEN. MICHAEL B. ENZI, R-WYO.
SEN. RICHARD M. BURR, R-N.C.
SEN. JOHNNY ISAKSON, R-GA.
SEN. RAND PAUL, R-KY.
SEN. LISA MURKOWSKI, R-ALASKA
SEN. MARK S. KIRK, R-ILL.
SEN. TIM SCOTT, R-S.C.
SEN. ORRIN G. HATCH, R-UTAH
SEN. PAT ROBERTS, R-KAN.
SEN. BILL CASSIDY, R-LA.
SEN. SUSAN COLLINS, R-MAINE
SEN. PATTY MURRAY, D-WASH.
SEN. BARBARA A. MIKULSKI, D-MD.
SEN. BOB CASEY, D-PA.
SEN. AL FRANKEN, D-MINN.
SEN. MICHAEL BENNET, D-COLO.
SEN. SHELDON WHITEHOUSE, D-R.I.
SEN. TAMMY BALDWIN, D-WIS.
SEN. CHRISTOPHER S. MURPHY, D-CONN.
SEN. ELIZABETH WARREN, D-MASS.
SEN. BERNARD SANDERS, I-VT.
ASSISTANT PROFESSOR OF ECONOMICS AND EDUCATION,
BROWN CENTER ON EDUCATION POLICY,
THE BROOKINGS INSTITUTION
F. KING ALEXANDER,
PRESIDENT AND CHANCELLOR,
LOUISIANA STATE UNIVERSITY,
BATON ROUGE, LOUISIANA
CENTER ON BUDGET AND POLICY PRIORITIES
ASSOCIATE VICE PRESIDENT,
UNIVERSITY STUDENT SERVICES AND SYSTEMS,
L. ALEXANDER: (OFF-MIKE) this testimony, we have a terrific group of witnesses, many senators interested on a subject that a lot — a lot of people care about, the cost of attending — of attending college.
Senator Murray and I will each have an opening statement, then we’ll introduce our witnesses. We call this — we’ll introduce our witnesses after the testimony. We’ll each have five minutes of questions, so that we can have a conversation and we’ll ask the witnesses if they’ll try to summarize your remarks in about five minutes. That will give us a chance to have a good — a good discussion.
The question before us is, can you afford to pay for college? And I believe the answer for most Americans is yes, and for millions, two years of college is free. It’s never easy to pay for college, but it’s easier than many think, and it’s unfair and untrue to make students think they can’t afford college, and I believe we should stop telling students they can’t afford college.
Four weeks ago, I spoke at the graduation ceremonies in Moorestown, Tennessee at the Walter State Community College. Half the students are low income. For them, two years of college is free or nearly free. The Pell grants up to $5,370 in tuition, for a average community college across the country it is about $3300. So for the four of 10 undergraduates in the United States who attend two-year colleges, college is affordable, especially in Tennessee where our state has made community college free for every — every student, every high school graduate.
Another 38 percent of undergraduate students go to public four- year colleges and universities, where the average tuition is about $9,000. So that means about three out of four of our undergraduate students are at public institutions. At the University of Tennessee, Knoxville, one third of the students have a Pell Grant, 98 percent of the freshmen have a state Hope Scholarship, which provides up to $3,500 annually for the first two years, and $4,500 for the next two.
So, for most students, a public university is affordable and those include some of the best colleges and universities in the world. So what about the 15 percent of our students who go to private universities where the average tuition is $31,000?
Here’s what John DeGioia, the president of Georgetown University, told me this week. At Georgetown, the costs of college are about 60,000 annually. First, he said, “We determine what a family can afford to pay, then we ask students to borrow $17,000 over four years, then we ask the student to work 10 to 15 hours under our work-study program. Then we pay the rest, the rest of the $60,000.” That costs Georgetown about $100 million a year. He says they work with 20 — 21 other private universities who — who have the same sort of plan.
And he said Harvard, Yale, Stanford, and Princeton are even more generous. So even for these elite universities, so-called, they may be affordable. And finally, 9 percent of students go to for-profit colleges, where tuition is about $15,000.
OK, let’s say that your family still is short of money. Taxpayers will loan you the money on generous terms. We hear a lot about these student loans. Are taxpayers being generous enough? Is borrowing a good investment? Are students borrowing too much?
One way to answer these questions is to compare student loans to automobile loans. When I was 25, I bought my first car. It was a Ford Mustang. The bank made my father co-sign the loan, because I had no credit history and no assets. I had to put up my car as a collateral. I had to pay off the loan three years. If you’re an undergraduate student today, you are entitled to borrow at least 5 to $6000 from the taxpayers each year. doesn’t matter what your credit rating is, you don’t need collateral, the fixed interest rate for new loans is 4.29 percent this year.
When you pay your loan back, you don’t have to pay more than 10 percent of your disposable income each year, and if that rate — and if that doesn’t pay it back over 20 years, your loan is forgiven. Is your student loan a better investment than your car loan? Cars depreciate. The College Board estimates that a four-year degree will increase your earnings by $1 million, on average, over a lifetime.
Is there too much student borrowing? The average debt of a graduate of a four-year institution is about $27,000. That’s about the same amount as an average car loan in the United States. The total amount of outstanding student loans is $1.2 billion. That’s a lot of money. But the total amount of auto loans outstanding in United States is about $950 billion. Excuse me, the student loans is $1.2 trillion, auto loans is $950 billion, and I don’t hear anyone complaining the economy’s about to crash because of auto loans, nor do I hear the taxpayers to do more to help borrowers pay off their auto loans .
Well you might say. “What about the hundred thousand dollar of students debts?” The answer is debts over $100,000 make up 4 percent of student loans and 90 percent of those are doctors, lawyers, business school graduates, and others who have earned graduate degrees. Nevertheless, it’s true that college costs are rising, and a growing number of students are having trouble paying back their debts.
Seven million, 17 percent of federal student loan borrowers, are in default, meaning they haven’t made a payment on their loans in at least nine months. The total amounts of loans currently in default is about 9 percent of the total. All of those loans get paid back one way or the other, usually.
The purpose of this hearing is to find ways to keep the cost of college affordable and to discourage students from borrowing more than they can pay back. I’m going to submit the rest of my statement for the record to save a little time and just summarize these remaining points.
I suggest five steps the federal government could take to make college more affordable, and to discourage students from borrowing more. One is stop discouraging colleges from counseling students about how much they should borrow. We’ve had witnesses here who have told us that they’re not allowed to — to require additional counseling before students borrow. Two, help students save by graduating sooner. Senator Bennett, I, and others have introduced the FAST Act, which would make the Pell Grant available year-round. Three, make it simpler to pay off student loans.
Tennessee College president told me last week, it took him nine months to help his daughter pay off his — her student loan, and he had the help of his financial aid officer. Four, allow colleges to share in the risk of lending to students. Five, point the finger at ourselves in Congress. In my opinion, state aid to public universities is down because of the imposition of Washington Medicaid mandates and a requirement that states maintain their level of spending on Medicaid. i
In the ’80s in Tennessee, Tennessee was paying 70 percent of the cost of college education, Medicaid spending was 8 percent. Today it’s 30 percent, Medicaid spending, and the dollars have come right out of state supported universities.
Chancellor Zeppos of Vanderbilt told us that the Boston consulting group estimated that it cost Vanderbilt University $150 million in 2014 to comply with federal rules and regulations, about $11,000 per student, which is more than the average tuition and fees for a four-year public university. Zeppos co-chaired a report to us that said that universities are snared in a jungle of red tape. So, we should take steps to make college more affordable, but I believe we should also cancel misleading rhetoric that causes so many students to believe they can’t afford college.
Community college is free for many. At U.T. Knoxville, 75 percent of your tuition may be aid; even at elite private universities, college may be affordable. And if you still need to borrow money, your student loan is likely to be about the same as your car debt, and your student loan is a better investment.
Dr. Anthony Carnevale of Georgetown says, without major changes, the American economy will fall short of 5 million workers with post- secondary degrees by 2020. So it’s a better investment for our country, too, Senator Murray.
MURRAY: Thank you, Mr. Chairman. I want to thank all of our witnesses who are here today.
You know, for many Americans, higher education can be a ticket to the middle class. And it’s not just important for students and their future, it’s also important for our economy. A highly educated workforce is going to help our nation compete in the 21st century global economy, so we should be working on ways to help more students earn their degree and gain a foothold into the middle class.
I personally know how critical this is, because I saw it with my own family when I was growing up. When I was just 15, my family fell on hard times, but because of strong federal investments, all of my brothers and sisters and I were able to get a quality education, we were able to afford to go to college through Pell grants and other federal aid programs. So, I really come to this believing that we should ensure students continue to have the success and the same opportunities that my family did.
But today, skyrocketing costs can be a major barrier to go to college, and to stay in school until they complete their degree. I was in my home state of Washington a few weeks back, visiting with some students at Central Washington University, and many of those students were the first in their families to go to college. They told me about the troubles they and their peers had, even just imagining being able to afford college growing up in low-income communities.
I have heard this over and over again, from students and families in my state. Last week, I met with community college students in Seattle who told me about the challenges of having to hold down two jobs while also being full time students, just to keep up with the rising tuition and fees and rent. And they will still end up with a loan debt when they graduate. That really places an unfair burden on our students and their ability to succeed.
In our country today, many students are doing the right thing. They’re working hard in school, they’re getting into college, they want to take the next steps to move in to the middle-class, but the high cost of college creates insurmountable roadblocks. Across the country, average annual tuition at public universities has gone up by more than $2,000 since the Recession alone; that is an increase of nearly 30 percent. Over the last 20 years, tuition has gone up far faster than inflation, but real family incomes, of course, have declined, but our investments in need-based aid have not kept up. This is made it much more difficult for young people, particularly from low-income families, to complete a college degree.
The high sticker price can deter some students for even — from even applying for college. Quite often increasing tuition mean students have to borrow more and more, saddling them with the crushing burden of student debt. In fact, according to the Federal Reserve, outstanding student and is now been more than $1.3 trillion, there are now 41 million Americans, 41 million Americans, with federal student loan debt today, up from 28 million in 2007. And seven in 10 college seniors who are graduating from a public or private non-profit college have student loan debt with an average of $28,400 per borrower.
Now, several factors contribute to the increase in college tuition. First and foremost, we have seen deep state funding cuts at public colleges and universities, which more than three quarters of our students attend. Today 47 states are spending less per student on higher education than they did before the Recession, according to Center Budget and Policy Priorities and the analysis of one of our great with witnesses today.
When student funding is cut, colleges and universities look to make up the differences with higher tuition, cuts to educational and support services, or both. A recent analysis by Demos (ph) found that declining state support is responsible for 100 percent of the increase in tuition at community colleges and 79 percent at research institutions. In my home state, state support per student is down more than 28 percent since the Recession.
Tuition at several of our four state year universities has increased by more than $5,000 and by more than $1,000 in our community colleges. Now I have heard some of my colleagues argue that Medicaid and higher college costs are somehow directly linked. Nothing forces states to find one expense at the expense of the other; ultimately state budgets just like our federal budget, are about values and priorities, and state lawmakers have tough choices to make about spending cuts and raising revenue to fund vital priorities like health care and higher education. And even as the economy has begun to recover, state investments in higher education have not begun to bounce back fast enough.
I believe this committee should look at ways to leverage federal investments to stem the decline in state support for higher education, and there are other ways that I believe we should look to help students and families to bring down the cost of college. I believe we need to protect need-based grant aid, so low and middle income students are not priced out of attending college, and students should also have access to simple, transparent consumer information on costs, expected debt and earnings and available financial aid, so consumers can make fully informed decisions.
So as we embark now on a bipartisan process to reauthorize the Higher Education Act, we have got to make sure that all of our students from all walks of life have the opportunity to further their education and secure their ticket to the middle class. Expanding access to higher education is a crucial part of building an economy that works for all of our families, not just the wealthiest few.
And I look forward to hearing from all of our witnesses today on this critical question of how to make sure our colleges are affordable for today.
Thank you very much.
L. ALEXANDER: Thank you, Senator Murray. I’m pleased to welcome our witnesses.
Our first witness is Dr. Judith Scott-Clayton, assistant professor of economics and education at the Teachers College of Columbia University. She’s appear before us before. We welcome her.
Our next witness is Dr. Elizabeth Akers, fellow with the Brown Center on education policy at the Brookings Institution. Welcome, Dr. Akers.
I’ll ask Senator Cassidy to introduce our third witness today.
CASSIDY: Thank you, Mr. Chairman, I appreciate this opportunity, I’m honored — I have to say I’m honored to introduce and welcome Dr. King Alexander to this hearing. Among other things, he is actually one of my bosses, so I feel obligated to — what a great guy you are, King, and by the way, you pay me nothing. Could you pay me some more?
He’s the president and chancellor of Louisiana State University, which is also my alma mater. Prior to this appointment Dr. Alexander was president of the Cal State University Long Beach, one of the nation’s largest public universities, and during his tenure twice named as the Cal State University student Association president of the year, which represents all 23 California state universities and more than 440,000 students.
Dr. Alexander previously served as president of Murray State University, faculty member at the University of Illinois at Champaign Urbana, where he was the director of graduate higher education programs. And as a teacher and administrator, Dr. Alexander has received many honors, served on numerous higher education and statewide organizational leadership boards, and often asked to present — to represent public higher education colleges and universities before Congress.
I’ll also add that our conversations he has taught me a lot about higher education financing.
Dr. Alexander, thank you for being here.
ALEXANDER: Thank you, Senator Cassidy. The only reason Dr. Alexander got a longer introduction is because he’s from Louisiana and he has a fortuitous name, so.
Next, we will hear from doctor — from Michael Mitchell, policy analyst at the Center on Budget and Policy Priorities. He focuses on state budget and tax policies there and is conducted research on the effects of budget cuts on communities of color in the impacts of the Recession on young adults.
Our final witness is Mr. James Kennedy, associate vice president of the university student systems and services at Indiana University, and his role there he is also the University director of financial aid.
Welcome to all of you. Why don’t we start with Dr. Scott- Clayton, and go right down the line. If you’d each summarize your remarks in five minutes or so, we will then go to questions.
SCOTT-CLAYTON: Chairman Alexander, Ranking Member Murray, and members of the committee, thank you for the opportunity to testify today. I would like to provide a bit of background about college affordability in general and then focus on and what the federal government can do immediately to improve it.
First, the college affordability crisis is real. College attainment has never been more important for economic mobility, yet state dis-investment in public institutions has led to both increases in tuition and decreases in resources available per student. Both of these have consequences. College attainment is becoming increasingly unequal by family income, even among fully qualified students.
As the economist Susan Dynarksi noted in yesterday’s New York Times, among students with top test scores, only 41 percent of the poorest kids are in a bachelors degree, compared to 74 percent of kids from high income families. This is a tragic waste of human potential, it’s getting worse and it demands policy solutions. However in terms of federal policy, the challenges the college affordability may be different than what people usually think, and if we focus on the wrong problems were likely to end up with the wrong solutions.
First while tuition is rising, financial aid is higher than many people realize and affordable options do exist. Only about a third of students pay full sticker price, and the average full-time undergraduate receives about $8,000 in grant aid, as well as $6,000 in other aid to help pay for college. Community college students receive enough on average to cover tuition, and even some of their additional living expenses. This is not say that aid is sufficient to completely meet all students’ needs, or that affordable options are just as good as more expensive ones, but too many students leave money on the table, failing to apply for aid that might help them persist to a degree, or even worse, failing to apply for college at all, because they assume they can’t afford it.
Second, student loan debt is lower than news headlines might lead you to believe. More than two thirds of college entrants borrow less than $10,000. Those with higher levels of debt typically have higher levels of degree attainment and thus higher earnings potential.
Still, the risk of default is concentrated among borrowers, particularly who attend for-profit institutions or who leave school without any degree at all, and the standard tenure repayment schedule unnecessarily burdens borrowers when their earnings are lowest and most variable.
The real college affordability crisis is not that we’re spending too much on college and saddling graduates with too much debt; the true crisis is that federal student aid has become more essential for more students than ever before. But the complexity of the system is undermining its effectiveness.
For many families, the college decision is not an exciting and joyous one but instead is scary and overwhelming. Unfortunately, the burdens of complexity and confusion fall most heavily on the very students who need aid the most, low-income students, minorities and first-generation college goers, who are the least likely to have a family member, friend, or counselor who can guide them through their options and help them fill out the FAFSA.
Too many of these students fall off the path to college early, not because they ever actively decide that it’s not worth it, but because they simply assume that they don’t have a choice.
We can’t keep tinkering around the edges of an aid system that was designed nearly half a century ago; we need meaningful federal aid reforms, and we can’t afford to wait.
First, we should simplify the unnecessarily complex Pell eligibility formula and get rid of the FAFSA. If eligibility were based only on tax information already available from the IRS and if this information were drawn from a prior — prior tax year, eligibility could be calculated automatically without the need for a separate application and students can learn about aid early enough for it to actually influence their college choice.
Second, streamline federal student loans into a single program with income-based repayment. Income-based repayment needs to be the default so that students don’t have to navigate additional paperwork to enroll. And the adjustment of monthly payments needs to be automatic, much like Social Security deductions, so that payments are based on current income, not income from several months or a year ago.
To some ears, these recommendations might sound boring, too technocratic or small-minded in light of the serious challenges that we’re facing. But complexity and confusion are far more than just an annoyance for low-income families. To the contrary, research has convincingly shown that when the complexity of financial aid is reduced, it significantly increases enrollments for low-income students.
Importantly, the impact of these reforms could reverberate even beyond financial aid. The current system requires an army of high- school and college staff, community-based organizations and volunteers just to help low-income students figure out the FAFSA and their student loan options.
If federal policymakers could empower students with simple, early information about financial aid, these precious, highly skilled resources could be redirected to helping students figure out where to go, what to study and how to succeed in college, not just figuring out whether they can afford to go at all.
L. ALEXANDER: Thank you, Dr. Scott Clayton.
Dr. Akers, welcome.
AKERS: Thank you.
Good morning, Chairman Alexander, Ranking Member Murray and distinguished members of the committee.
My name is Beth Akers. I’m an economist by training and presently a fellow at the Brookings Institution, where I carry out research on the economics of higher education. Thank you for giving me the opportunity to be here today to share my thoughts on this important issue.
I’d like to start by laying out three facts that are related to the issue of college affordability, none of which will be a surprise to anyone in this room, I’m sure.
Number one, students and their families are spending very large sums of money in pursuit of college degrees. The average student earning a bachelor’s degree at a four-year, private, non-profit institution will pay upwards of $94,000 in tuition, fees, and room and board over the course of their enrollment. This amount is almost twice the median household income in the United States in 2013.
Number two, as a nation, we’re spending a tremendous amount of money on higher education, and we’re relying heavily on debt to support that spending. U.S. households are now holding $1.2 trillion in education on their personal balance sheets.
And lastly, number three, there are more households with student loan debt today than ever before, and their balances that they’re holding are at the highest levels in history. 38 percent of young households are now holding some level of student debt. That’s up from 11 percent in 1989, and their average balances have more than tripled during that time, from about $5,800 to almost $20,000 today.
Discussions of college affordability often dwell on these three points. Unfortunately, without additional context, they tell us almost nothing about whether or not college is affordable. Rather, they simply tell us that college is expensive, and unfortunately, that’s not the same thing.
Let’s consider the first point again. The price tag of our education is high. We know that. But in order to know whether it’s affordable, we need to know what that price tag is actually buying.
Research tells us that education buys students access to higher earnings. While the exact figures vary across different studies, it’s been consistently found that the life-long financial dividends of a college education exceed the up-front cost by a very wide margin.
A recent report from the Federal Reserve Bank of New York indicated that the financial return on a college degree might be about 15 percent, which is a very generous return by pretty much any standards.
On the second point, regarding the $1.2 trillion in outstanding student loan debt, as we consider the question of affordability and higher education, let’s not make the mistake of thinking that these dollars were effectively thrown into some sort of black hole of the economy. Rather, this debt is simply a derivative of the significant national investment we’ve had in higher education, which is an asset we believe pays large dividends to individuals and therefore, necessarily, also to the broader economy.
And now back to the third point on debt, it’s important that we don’t forget that debt is simply an instrument that allows borrowers to tap into their future earnings in order to make investments that they would not have otherwise been able to afford. It is not inherently good or bad.
What we should asking ourselves is whether our current system of student lending sufficiently enables this transfer of wealth across stages of life, from a time when an individual is reaping the financial benefits of education with higher earnings to an earlier period when the individual is facing the up-front cost of investing in higher education.
My recent work on this question showed that despite the dramatic tuition inflation we’ve seen over the last two decades, the month-to- month burden of student loan repayment has not increased for the typical borrower.
I’ll conclude with three final points.
First, college is affordable for the average student in the sense that it will pay for itself in the long run.
Two, student loans are a critical tool for ensuring that all potential students, regardless of their wealth, are able to access the benefits, financial and otherwise, that higher education affords.
And three, college is affordable on average, but it is inevitable that some students will not see a positive return on the dollars that they invest into higher education. Therefore, it’s important that a streamlined system of income-driven repayment exists to ensure ex-post universal affordability.
Thank you for your attention. I look forward to your questions.
L. ALEXANDER: Thank you, Dr. Akers.
F. ALEXANDER: Thank you, Chairman Alexander and members of the health board committee for this opportunity to share with you some of my thoughts regarding the important national issue college and university affordability and access.
I am president of Louisiana State University, which is a Land Grant, Sea Grant and Space Grant university with an enrollment of nearly 44,000 students. We take great pride in providing high-quality educational opportunities at student costs well-below the national average, and our state ranks third lowest in student indebtedness in the country, and we’d like to stay that way. That’s why we’re asking you for your help.
This morning, I’d like to focus my comments on the ongoing and greatest challenge facing public higher education today, which is the continual decline of state appropriations. I will also provide some policy recommendations and proven examples of how federal government can actually better utilize its leverage to ensure that there will be affordable public colleges and universities for students in every state for years to come.
What no one expected — no one expected in 1972, was that states would get out of the higher education funding business. What no one expected was — in 1981, was the state — that’s when state reductions started to occur, and three-and-a-half-decade decline, we’ve experienced in state public funding decline.
The result has been that state funding for higher education sits currently around 48 percent below where it was in state tax effort in 1981 — would measure state spending by — the percentage of — of per capita income by state.
In other words, states began getting out of the higher-education business to the point that the federal government has now become the primary funding source through tuition and fee-based programs, which it wasn’t intended to be in 1972.
For example, if current state funding trends persist, Colorado will become the first state not to spend a penny on public higher- education less than a decade from now. This means that existing primary school children in Colorado will have no affordable public college or university options in less than a decade.
States that will soon follow Colorado in abandoning their public commitments will be Louisiana, two years later, Massachusetts, Rhode Island, two years later, Arizona, 2030, South Carolina, 2031, Vermont, ’32, Oregon, ’34, and so on.
As the interlocking relationship between student aid, public state funds and student tuition increases is indisputable. If we do not look to new federal policies to address this issue, we will continue to decline, watching our 25 to 34-year-olds ranked 12th in the OECD standards in terms of college completion, compared to our older population ranking first of our 55 to 64 year-olds in OECD standards.
To assist in addressing the college affordability issue, first we need to review all federal policies to ensure that price sensitivity is not incorporated into the formulas. Campus-based federal funding, SEOG and Work Study actually provides additional funding to institutions that charge more, incentivizing institutions to charge more.
For example, the California State University, with over 230,000 Pell Grant-eligible students, receives the same amount of the SEOG funding as the Ivy League institutions, with only 10,000 Pell Grant students.
The Ivy League, with 10,000 Pell Grant students, receives twice the Work Study as California State University, with 230,000 Pell Grant students.
However, the most important — I would say the most important federal policy recommendation that I make today is to use federal leverage to ensure that states maintain their public support of our education.
Today, the diversity of American higher education is indeed threatened by the elimination of public colleges and university student options. The time has come for a new federal partnership. Federal partnerships are not new to higher education.
We are a Land Grant university, which is a federal partnership established in 1862. That was a federal-state partnership using federal leverage.
More recently, federal leverage was used with the passage of the 1972 Higher Education Act, where we encourage states through the SSIG Program, of which only 19 have state student aid programs, federal matching program encouraged states with matching funds to adopt state student aid programs. Within four years, nearly 40 states had adopted those programs. Further evidence was found with the stimulus packages. If the stimulus packages did not include the maintenance of effort provisions, that said that — states could not accept stimulus funds. If they cut their budgets below 2006 funding levels, then those funds would not have been received by states.
Well, nearly 20 states adopted the policies that cut their budgets nearly to the federal limit of where they could go, but they would not cross the federal leverage line. Before we increase federal spending awards and expand federal — loan caps, we need to make sure that states are staying in the game, making sure that states are not disinvesting. Before we put $200 more into a Pell Grant, we need to ensure that the back door of these houses is closed, so that it doesn’t do — a Pell Grant student any good if we increase it by $200, when our states are increasing their tuition fees by $900.
So, now is the time that we do need federal leverage to make sure states do not abandon their responsibilities to public higher education.
Thank you very much.
L ALEXANDER: Thank you, Dr. Alexander
MITCHELL: Chairman Alexander, ranking member Murray, members of the committee, thank you very much for this opportunity to testify on college affordability.
My name is Mike Mitchell, I’, a policy analyst with the Center on Budget and Policy Priorities, a policy institute which focuses on research and analysis on budget and tax policy issues at the state and federal level. My research has focused on state investments in higher education.
My remarks today will hone in on three key points. First, states have made dramatic cuts to higher education funding since the onset of the 2008 recession. Over that same time period, second, we have seen significant increases in tuition at public four-year colleges. And then finally, as this shift from state investment to higher tuition has occurred, there is the potential for harm to students, particularly low-income and students of color at public four-year and two-year colleges.
State and local tax revenues play a critical role in funding higher education and unlike private institutions, which may rely upon private — gifts or large endowments, public two and four-year colleges typically rely on state and local appropriations to fund teaching and education purposes. In 2014, state and local dollars constituted slightly more than half of educational revenues, used directly for teaching and education.
For public colleges and universities, state support today is well below what it was in 2008. In aggregate, states are spending $13.3 billion less on higher education today than they were in 2008. On a per-student basis, we see that this is about a 20 percent decline in higher education funding across two and four-year public colleges.
In all but three states, as Senator Murray pointed out, Alaska, North Dakota, and Wyoming, are spending less per student today than they were before the recession. Over that same time period, we have seen increases in tuition at public four-year colleges, in some states dramatically so. In six states, for example, we’ve seen tuition increases above 60 percent — average annual increases above 60 percent, and over that same time period, in Arizona, the number one state in tuition increases, rose by 84 percent.
Now, encouragingly, I will say that over the past few years we have seen states start to put dollars back into their higher education systems. However, that reinvestment has been — has not been enough to make up for the total amount of cuts. Again, over that same time period, as states have started to reinvest, we have seen tuition increases that have been much more moderate than they were over the worst years of the economic recession and major years of cuts.
But, again, what does this mean for students? Well, I think it’s important to keep in mind that for low-income students and students of color, sticker shock is a very real phenomenon. And that, for these students, they are more likely to take on higher levels of debt and to borrow — more likely to borrow and to take on higher levels of debt to fund their education, even at public four-year institutions.
Student debt levels overall, for all students, are increasing and the share of students taking on debt is also going up, and this can present a host of challenges, threatening college completion, which is another population students we need to be very mindful of in terms of having debt but not necessarily the diploma to be able to pay this off. But then also for those who do graduate, what higher levels of debt can do in terms of pushing off major lifetime milestones and other important — other important actions and activities.
Moving forward, strengthening state investments in higher education will play a huge role, at the very least, in ensuring that more students can enter higher education and complete. In order to make this happen, state policy makers will need to make the right tax and budget choices over the coming years and must avoid additional cuts to higher education that will make it much harder for students to enter and complete in college.
Thank you very much for your time and I look forward to answering any questions you may have.
L ALEXANDER: Thank you, Mr. Mitchell.
KENNEDY: Chairman Alexander, ranking member Murray, and distinguished members of the committee, my name is James Kennedy and I’m the associate vice president of University Student Services and Systems at Indiana University.
Thank you today for giving me the opportunity to discuss the initiatives underway at Indiana University that assistance students to better manage student debt and cost of their college experience. One of my primary responsibilities is working with all seven Indiana University campuses and financial aid issues. Indiana University consists of 110,000 students, of which 84,000 — receive some type of financial assistance.
Providing a program advising the students regarding financial aid and debt management continues to be a high priority as included in the Bicentennial Strategic Plan for Indiana University. I’m here to discuss our success with three major initiatives in lowering student loan debt.
Through our Comprehensive Financial Literacy Program, started a little more than two years ago, a detailed review of financial aid processes and the University’s commitment to student success and degree completion, we have helped Indiana University undergraduate students lower their borrowing substantially, approaching 16 percent over two years, with savings of approximately $44 million.
Indiana University’s Office of Financial Literacy and its IU MoneySmarts financial education program were established to assist students in making informed financial decisions before, during, and after college. The goal is to provide students with information that will increase the likelihood of them making smart personal finance choices. Initiatives include one-on-one appointments, classroom setting education, interactive online material, and events and workshops.
A 60 minute online financial training module was initiated in 2013 for all new students. This module includes information on student loans and financial basics, such as savings, budgeting, and credit. In the two years since implementation, we have averaged an 80 percent completion rate. MoneySmarts.IU– IU.edu is our main source of financial information for students, including this to our weekly financial sessions and episodes in our How Not to Move Back in With Your Parents podcast. This podcast is averaging over 3,000 play requests per month. In addition, a group of undergraduate students from various disciplines constitute an IU MoneySmarts team that provides one-on-one peer mentoring financial sessions and group presentations to students.
Starting in the 2012-13 academic year, Indiana University started sending annual debt letters to all student borrowers. In our discussions with students, we discovered many did not have knowledge of their overall student loan debt until graduation or when they started repayment. While students completed the required department of education entrance and exit loan counseling requirements, there is no information actively provided to students while they attend (ph) it.
The annual debt letter gives students information on all federal loans, as well as the private loans processed through Indiana University, and includes cumulative debt, estimated monthly repayment, estimate interest rate, and remaining eligibility based on dependency status. Other important information is also provided to students. The annual debt letter has been well received and has resulted in many student inquiries about managing student loan debt.
In the fall of 2015, Indiana University will start sending to all new transfer students a debt letter before they start classes to assist with financial planning. Our analysis has that shown that transfer students have accumulated excess student loan debt from previous institutions will need additional counseling to be successful in completing their degree. Financially process changes have also been implemented including the cost of attendance methodology, how information is presented on financial aid award letters, earlier interventions with students not meeting satisfactory academic progress requirements, limited aid appeals and continuing touch points to counsel students with debt issues, and more targeted institutional aid to keep the net cost down.
Under the direction of Indiana president, Michael McRobbie, we have been implemented several — several completion initiatives which have the secondary benefit of decreasing the amount of money students will need. The 15 to Finish Campaign promotes taking 15 credits per semester to graduate in four years and minimize debt. Interactive degree maps are used to provide students a clear pathway to finish their baccalaureate degree in four years.
Early alert systems allow professors to identify students with academic issues and direct them to their advisers for assistance. The financial aid staff and campus advisers work closely together to counsel students on credit completion standards and the impact of withdrawal and state and federal aid eligibility requirements. These partnerships allow for improved counseling to students and have strongly promoted through our student loan debt initiatives.
Together, the goal through these — these three major initiatives is for students to have manageable levels of debt once they achieve their goal of a college degree.
Thank you for the opportunity to share our student loan debt initiatives at Indiana University.
L ALEXANDER: Thank — thank you very. We’ll now begin a five- minute round of — questioning.
You know what this is, right? I wanted to do that before Senator Bennett did it. The — that is the — this is the federal student loan application, 108 hundred questions long, correct?
SCOTT-CLAYTON: That’s the FAFSA.
L ALEXANDER: Would — would — would it surprise you if I told you that the president of Southwest Community College in Memphis says that he thinks he loses 1,500 students a semester because of the complexity.
SCOTT-CLAYTON: That would not surprise me.
L ALEXANDER: Are you familiar with the Fast Act that Senator Bennett, and Senator Burr, and Isakson, and Senator Booker, and Senator King have introduced?
SCOTT-CLAYTON: Yes, I am.
L ALEXANDER: And it has these provisions. It would reduce this 108 questions to two, it would tell families that they could fill it out in their junior year of high school, it would combine two federal grant programs into one Pell Grant Program, one — and — and — and reduce the number of long programs. It would provide for year-round Pell Grants, discourage over borrowing, and simplify repayment options.
Are — are — are you familiar with the proposed Fast Act?
SCOTT-CLAYTON: Yes, I am.
L ALEXANDER: Do you think it would address the — the testimony that you gave that the complexity of the federal aid system is a significant barrier to a large number students?
And I might ask you, also, before you answer, would you be surprised to learn that the college president in Tennessee took nine months to help his daughter pay — pay off her student loan because they kept finding there was no way to fully pay it off? Even — even though there is a very generous procedure for paying off loans?
SCOTT-CLAYTON: That is not surprising and — and at community colleges in particular, people may be surprised that the rate of Pell Grant receipt (ph) at community colleges is about the same as at private four-year institutions. And the reason for that is because of low application rates — low FAFSA application rates. There are likely many more students at community colleges who could qualify for more aid than they’re getting, if they could get through the application process.
So, I do think that the Fast Act would be a significant improvement, a meaningful improvement — and would potentially bring more students into college. I think that we should not be looking at that — we get into trouble when people think that this is just about a form and making a form easier for people who are already gonna go to college, and already have a parent or counselor who can help them fill out this really — annoying form. It’s not just about the form. It’s about being able to communicate to students early, not just in 11th grade, in ninth grade, in eighth grade, that there’s money available to help them go to college.
So this is not a trivial reform. This is something that could make a real difference and it has an unusual degree of consensus from across party lines, so I think it would be a very helpful policy.
L ALEXANDER: Let — let me ask you and Dr. Akers this question. I’ve been intrigued by the fact that the average car loan, in the United States, is about the same as the average student loan for an undergraduate. It’s about $27,000. And the total amount of student loans is about $1.2 trillion, and the total amount of auto loans is about $950 billion.
So, why do we not hear anything about auto loans being a great burden for Americans? Why do we not hear anything about — auto loans causing individuals to — to not be able to pay their other responsibilities, when it’s demonstrably true that — that a $27,000 student loan is a better investment than a $27,000 car loan. Are we exaggerating the difficulty of — of student loans?
Dr. Akers, do you want to try that? I mean, I was thinking as you testified if I — if I could substitute every time you mentioned student loan, car loan, you could’ve made some of the same testimony. I
AKERS: Sure. So, I think there’s a tremendous amount of anxiety around student debt right now. Some of that might be driven by the fact that we have, really, a new population of borrowers in the federal student lending system than we had two yeas ago…
L ALEXANDER: But why — why aren’t they worried about borrowing $27,000 for a car?
AKERS: … I — I can’t tell you that, to — to be honest.
L ALEXANDER: OK.
AKERS: But I do know that there’s a lot of concern…
L ALEXANDER: Seems to cause nobody any problem. I mean, I have –I have yet to see one report that says that’s about to bring down the American economy. Yet, there are all these reports about the student loan bubble, and the student loan bubble’s about the size of car loan bubble, the way I can figure it.
AKERS: … Can I just add two things to that? One is that people have a lot more experience with car loans than they do with student loans. Student loans are something that you do once in a lifetime and — and as that said, many — many students are — their parents didn’t have to go through that themselves. So, they’re not able to advise students the way they might be able to about a car loan.
And the second, I think a lot of the anxiety comes from the fact that people know that college is absolutely essential, that it’s absolutely necessary, and that’s what creates this high level of anxiety. Where as with a car loan, frankly — you might be able to get away — without one or you can borrow your brothers or your friends’.
L ALEXANDER: OK. My time is up.
MURRAY: Or you can sell it if you need to.
Dr. Alexander, we have heard from today’s witnesses that it will take increased investments from states to accomplish the goal of making college more affordable, especially at our public institutions, which serve about three quarters of our students, actually.
But Louisiana (ph), state support per student is down 43 percent since the recession began and now you’re facing more cuts, I understand. In — in your testimony, you — you mentioned the importance of leveraging federal resources in order to encourage states to invest more in their colleges and universities. In your experience, have federal incentives, or leverage, been effective in the past?
F. ALEXANDER: From my experience and what I’ve studied, it has been very effective. Go back to SSIG, in-state student aid programs, that are mentioned in 1972. Within four years, the number of states that adopted those programs for the federal match had doubled. More recently, with the stimulus packages, what most people don’t realize about the stimulus package is that they did have a floor, and that floor was the 2006 funding level. And — many states, nearly 20 states, cut their budgets to where that floor was, and did not correct cross that threshold during the stimulus era.
When the packages left, states such as California and others, where I was at the time, immediately dropped their budgets in 1994-95 funding levels because there was no more federal leverage. So, federal leverage works and it works in many ways. The latest is the fact that Tennessee does offer free community college education. 75 percent of those funds were provided by the federal government to offset tuition and fees that the students pay, but the big piece of the Tennessee leverage issue is that Tennessee must keep their 25 percent leverage, their 25 percent state appropriations, in place for two and four-year institutions in order to receive those funds.
I wish we had that plan working for us in Louisiana right now, because were looking at an 82 percent budget reduction that basically knocks us down to the lowest level that we have had in funding since we started measuring it, before 1961.
MURRAY: Any thoughts on how we could mirror — mirror some of those successful efforts when we reauthorize the Higher Education Act?
F. ALEXANDER: I think that we have $170 billion at the federal level going into revenues for higher education, and we need to utilize as much of that as possible, even incentivizing $10 billion of that to encourage states to reinvest, to continue investing, to reward states that are not cutting their budgets, to reward states that — that put money into public higher education. That could be the most affordable tactic that we take at the federal level, is to reward states for remaining affordable, keeping students out of debt, and keeping their effort at higher levels before they get out of the higher education business.
Dr. — or Mr. Mitchell, let me turn to you.
Your — your research shows that, even while the economy is beginning to recover, 47 states are spending less per student than they did before the recession. In — in Washington state, cuts like these have led to a nearly 60 percent increase in tuition at our public universities in just six years. The University of Washington State funding has been cut in half since the recession. A student attending the U.W. in the fall of — 2007 owed a little more than $6,000 in tuition and fees, and today that is almost double, more than $12,000. And by the way, that doesn’t include rent, or food, or transportation, or all those other costs that a student has to pay.
And to me this is really unacceptable. So, I want to ask you. From your perspective as a state budget analyst, what is keeping states from making these important investments?
MITCHELL: So, first and foremost, I don’t think you can overstate just how dramatic the decline in revenue was right after the recession. States cumulatively saw budget shortfalls above $100 billion for multiple years, and so cuts were deep in higher education.
Now, many states at that time, when they were facing these shortfalls, chose dramatic budget cuts over looking at a balanced approach of revenue — targeted, responsible revenue increases matched with some kind of budget — budget restrictions. Now, as you said, revenues are starting to come back to prerecession levels. However, when we look at across states, it’s only about 2 percent above revenues prior to the recession.
And so, in many states, it’s still very difficult for them to put these resources back into higher education, especially across a larger population of students. And — I — I did want to make one other point regarding the chairman’s earlier question on — on why we — why we care about debt.
Well, for low-income students and for students of color, we’re seeing these students take on higher levels of debt. But not necessarily completing college, and so the question of is it a good investment, sure, if you complete the investment. So, for students who are dropping out, who do not necessarily have the diploma, but you have the debt, because some of that — that the $1.2 trillion in debt is held by those students as well, so we need to keep that in mind.
MURRAY: And is that debt that they’re — that is growing for them, part of the deterrent of why they don’t finish college?
MITCHELL: There’s absolutely concerns for students who are looking at college and questioning whether or not it is an investment, even though, as other panelists here have said, it absolutely is. But, however, because they do not have the information on the front end to make that decision, it becomes much more muddied for them.
MURRAY: OK. Thank you, my time is up.
Thank you, Mr. Chairman.
L. ALEXANDER: Thank you, Senator Murray
COLLINS: Thank you very much, Mr. Chairman.
Prior to my election to the Senate, I worked at a college in Maine, Hudson University, and at that time, some 85 percent of the students there were first-generation college students, and virtually all of that group received some sort of federal financial aid. It was there that I learned that there was often a lot of pressure on the students to drop out of school, get a job, buy that car, because of the costs that they were bearing despite the finance aid that they were receiving.
And that’s the group that I am most concerned about. We know, when we heard from Dr. Akers today, that individuals who complete their college career are going to have lifetime earnings that are far higher than those with just a high school degree. But there are those in the middle, who have gone to college for a couple of years, amassed debt, and then dropped out, who are really in the worst situation. That’s why I’d like to ask the panel your opinion of programs like the Trio Program, which helps to provide counseling support not only to students who are thinking of going to college, but throughout their college careers.
I’ve also seen programs at Eastern Maine Community College in Maine, called college success programs, that works with this vulnerable group to encourage them to hang in there and deal with — helps them deal with what other — whatever issues that they have so that they complete their college degree. So, if we could go down the list, because if you think about, that’s the group that really is most vulnerable. They amass debt, and yet they don’t get the benefit of the higher earnings that come from college completion.
MURRAY (?): I think your concern is absolutely on target, and I think one way that the –the federal policy reform can help here is — so this guidance and support service you’re talking about are absolutely critical in the current system. What is we could simplify student aid so that it didn’t have to be so complicated, so it didn’t require this army of support services? If we could take that off the table so that so that students could borrow without that worry, without having to fear that they’re going to going to go into default, and if — if they could get all the aid that they’re entitled to, what we could re-devote all of those guidance and support services to helping students figure out what classes they should take, what program they should be in, what do they need to do academically to get their degrees so that they get that payoff?
COLLINS: So, I absolutely agree that we could be doing more to help students make better decisions on the front (ph), whether it be first generation or not, I think simplification is important in achieving that objective. I also think additional counseling could potentially have a positive impact there. We do have evidence that students, in their initial years of school, have very little information about their personal financial circumstances, and given that, it’s difficult to imagine that they’re really making the correct decisions — that are in their own best interest.
So lastly. I’ll say that, given all of that, we can improve front end decision-making. We will never get rid of the inevitability that some students will make bad investments, and so I want to emphasize the importance that we do need to maintain safety nets for borrowers who don’t see a positive return on — their investments.
(UNKNOWN): Trio programs do work, but they only impact one of 20 eligible students that need them. I’d like us to revisit an idea I think the federal government could certainly do, and it’s in 1972. Currently, there are no incentives to educate and enroll low-income students. Particularly for private rankings, for costs, low-income students cost more money and there are no incentives to enroll more Pell Grant students. I’d like us to revisit what happened in 1972. When we passed the Pell Grant Program in 1972, Congress also passed the Cost of Education Allowances, which allocated $2,500 to every institution following the Pell Grant student to those institutions, much like a title I school gets extra federal support, and we authorized it in 1972.
That would incentivize institutions to take the $2,500 and — per Pell, and put them into programs that help the low-income students stay and graduate. With no incentives in place right now, there is no — that we’ll see a continual decline of low-income students success.
This is one way that we can do — it’s already been authorized we’ve just never put any money into the cost of education allowances to encourage institutions to succeed with low-income students.
MITCHELL (?): And — and from a state perspective, I would want to point out that, as state cuts have taken shape, higher education — institutes of higher education and had to make choices about where they’re going to pair back (ph) their own budgets in the instances where tuition revenue wasn’t able to make up the difference.
And one of those areas that we’ve seen cuts occur, is — student support services, and some of those services go towards helping students, especially those students most at risk of dropping out, preventing that from happening. So, I think that there is absolutely, as you said, thing at the federal level, but also, states that need to be mindful of this as well.
KENNEDY (?): And Senator Collins, I would like to just add that — I believe we — we need to keep track of these students and keep — if they’re not doing well academically, or they’re having financial issues, I think that’s the key, is really keeping on track. Nobody wants to see a student leave after a couple of years and there is — that does unfortunately happen, especially when they have student loan debt.
But having manageable months of debt and — the students feeling like they’re in control, I think that really helps. Where if it gets to be too much, and they feel “I have to go work too much”, or take away from my studies, I think that really hinders their ability to move forward.
COLLINS: Thank you.
L. ALEXANDER: Thank you, Senator Collins.
FRANKEN: Thank you, Mr. Chairman.
Dr. Alexander, I have a bill I plan to introduce this year, called the College Access Act, that would that would address the college ability problem at the front end before students take on debt. Under my bill, as a condition for receiving federal funds, states would agree to implement reforms to make college more affordable and increase the percentage of first-generation and low-income students attaining a post secondary credential.
My question is, how would you design such a program to encourage states to invest for college access and affordability to first- generation and low-income college students?
F. ALEXANDER: I think the best design would be a federal, in — in this program, would be to match states that maintain certain levels of per-student spending, and to incentivize them by giving them a higher amount of support through the program if indeed they are succeeding and enrolling Pell Grant and low-income student populations.
It wasn’t — 10 years ago we finally got institutions to start admitting how many Pell Grant students were on their — at their institutions and how many were succeeding. And I know at the California State University and at Louisiana State University, we make this information available to parents, taxpayers, students, consumers, just to show how many of our Pell Grant students or low-income are on our campus, so we don’t move — back away from low-income serving populations.
The danger in having what we have had with the U.S. News & World Report, and many of the current measures that have been in place, is that they encourage institutions not to enroll low-income students. And in fact, with state appropriation reductions, what we’ve also seen is an increased interest and an increased attractiveness of out-of-state students, such as Colorado, Oregon, and others, that supplant the in-state, low-income populations of those various states, because they come in with more revenues, they come in with greater test scores, and at the expense of the low income population of the states.
So we’ve seen, in many instances, a supplanting of low-income students with out-of-state students because of state appropriation reductions. Any bill that addresses that issue, that encourages us to attract, retain, and graduate more low-income students, must be consistent with keeping our states — their — their tax effort in per-student spending at a certain level in order to receive those funds.
FRANKEN: Exactly, and thank you for that answer.
Mr. Kennedy, right now financial aid award letters are — are confusing. They often don’t clearly indicate what — what’s a grant versus what’s a loan. Sometimes they’re called award letters and I don’t know how many people consider a loan an award. I have a bipartisan bill, with Senator Chuck Grassley, that would make sure that students and their families get — and counselors get clear and uniform information, so that they can make apples to apples comparisons between what the different schools that the students have been accepted to are offering.
I’m pleased that Indiana University has changed its financial aid award letter to separate grants and scholarships from loans. Can you elaborate on how the initiatives you’ve introduced at Indiana, such as — a uniform financial aid — such as uniform financial aid and award letters and additional funding aid counseling, have affected student borrowing?
F. ALEXANDER: Yes, Senator Franken.
We had some focus groups with students, that’s where most of it started, just to find our what were the — the confusing parts were for students. And like you mentioned, that was very confusing, students having all the awards, or how you want to categorize all the aid types together. And we really wanted to separate us (ph) so the students would really understand that this is a student loan, I have to repay it, versus a grant or scholarship.
Our experiences been, any touch point that we have with students, whether it’s the financial aid notification, its counseling, it’s some of our financial literacy initiatives, it’s working with advisers, anything we can do is as a touch point to talk to students about — aid. Because one of our pieces with our student loan debt letter was, we realized that students — and we were — I guess we were pretty much horrified by the fact that, when talking to students, they’d say, “I have $25,000 — and I have $10,000 in student loan debt”, when it was actually $25,000. So, they didn’t really have a clue at all how much they accumulated up to, you know, a certain point.
So, and for planning purposes, we really wanted to make sure that, throughout their whole experience, they understand exactly how much money you have out in a debt, in student loan debt, and what their repayment’s gonna be so they can plan accordingly while (ph) once they leave the institution. So, to answer your question, I think anything we can do, any touch point with students to talk about student loan debt is very important.
FRANKEN: Well, thank you very much.
Thank you, Mr. Chairman.
L ALEXANDER: Thank you, Senator Franken.
CASSIDY: I enjoyed all of your testimonies, thank you.
And I — and — and as you spoke, I had this sense of the Greek myth of Tantalus, because we have incredible pressure to increase financial aid to students, but the more we offer, and Senator Warren, for example, has offered good legislation — legislation regarding that (inaudible) is good. I don’t like your tax position, but that’s — the more we offer, the more the states received. And so, if the goal is to make tuition affordable, and we try and raise aid, again, like Tantalus, it just recedes because the states pull away.
Now, and by the way, I think I read this. I heard from you, from you, from you, from you, from the GAO, and from this report, that states cutting aid is the principal reason tuition has increased. There is quite a consensus on this.
Now, Dr. Alexander, you mentioned something I heard Lamar say, when I was in Congress, that you mentioned that Tennessee’s Medicaid has gone from 8 percent of its budget to 30 percent of the budget, implying concomitantly that Tennessee’s support for higher Ed, except in the community college where there’s essentially a maintenance of effort, requirement has — declined. One has risen, one has declined.
The dollars are fungible, and states are moving it to where there’s a maintenance of effort. With that preamble, I’m against states be mandated to do something, but it appears, unless states are mandated to do something, they’re not gonna do so.
So, let me ask you, again, seeing that we have a maintenance effort for secondary education and we have a maintenance of effort for Medicaid, please explore with me this maintenance of effort. I don’t think the state should be told what to do. On the other hand, except where we tell them what to do, they’re gonna shift dollars to where we tell them what to do.
F. ALEXANDER: It certainly does, and Senator Alexander’s question’s right about the Medicaid growth in all of this. The — the challenge is that this — this cost isn’t going away, and as states back out of their responsibilities, the cost is falling on the backs of students, and it’s falling on the backs of the federal government. The federal government was not supposed to be putting in two and half times what states do in support of revenues for higher education, and that will be three and a half times, that will be four and a half times, because the $80 billion that states are putting into it will diminish, and this will quickly grow for the federal government’s burden, whether it’s Pell Grants, and SEOG Grants, subsidized loans, this burden will be transferred to the federal government and we will have a federal system of higher education, no longer state systems, but we’ll have a federal system of higher education, unless we stop states from getting out of the higher education business.
So, I think you’re exactly right. ESCA, actually, is a great example of what states will do with certain incentives. And in 1965, when we decided that title I schools should be in existence and the federal government should put extra money into poor schools, the first thing that states did is start backing their money out, and they backed their money out in numerous states. And that led to numerous court cases culminating with Bennett v. the Department of Education in Kentucky in 1985. It said states can’t supplant their money with federal money.
Well, currently we’ve got a supplanting situation in higher education.
CASSIDY: Now let me — let me — let me stop you. So paradoxically, the only way we maintain a state role is if we mandate a state role.
F. ALEXANDER: That — that actually has worked in so many different areas because the states are getting out and will continue to get out of the higher education business. We have states who have turned down Medicaid funding matches but still cut higher education at the same time.
CASSIDY: Now I also understand, which I did not appreciate before, Dr. Akers, I was struck what you said. This is actually a bargain. Most people are able to pay off their student loans — as Chairman Alexander said because the people with the $100,000 loans are, frankly, making a lot of money and they’re able to pay it off over time because their income befitted.
On the other hand, Mr. Mitchell, you make the point that it’s gonna be the poor person, the person of color, that is actually going to disproportionately suffer as states withdraw their contribution and the cost of tuition rises. So, if you will, for concern about income inequality, this issue states backing out tuition support actually contributes to income inequality. Is that what I got from you?
MITCHELL: The concern there is that those students of the low — low-income students and students of color, who either never make it on to a college campus, or don’t complete graduation — complete to graduation, won’t see the — the investment returns that some students do, especially higher income students. So that is — that is a problem, not only for those students, but also just for our broader economy and for a country that’s becoming more diverse.
And there was one other point though to — to on state budgets and kind of the pressures on state budgets. There are a number of areas where we look at what state priorities and what states need to spend on. One of those other areas that we look at is correction spending. Now, this is not a place where there is an — interaction with the federal government, but yet increases in cost at the state level have been rising over the past few years.
So, it’s — it’s — and, you know, state policy makers do have to make — decisions about whether or not to increase revenue, cut spending in other areas, to make investments in higher education possible. So I think it’s important to note that at the state level as well.
CASSIDY: I’m out of time. Thank you very much.
L ALEXANDER: Thanks, Senator Cassidy, and — and we’re — we’ll have a second round of questions because Senator Cassidy got — got into my favorite subject, which is what is the true cause of the — loss of state support of — for higher education, but I’m not going to abuse my chairman’s position to take up time to do it until my turn comes.
BENNET: Thank — thank you, Mr. Chairman, thank you for holding this hearing and I won’t dwell on the (inaudible) even unroll my (inaudible), just say that I hope with your leadership, we’re gonna be able to get this across the finish line. I think it’d make a difference to millions of people in the country.
I want to a say how much I appreciated Senator Cassidy’s preamble, because I don’t disagree with that and I think it’s — but I think the important part of this is to think about the practical effect of how our federal system has conspired against young people in this country over — over decades. And it has resulted — the –the polite way of saying it, I guess, is the way Dr. Smith (ph) Clayton has said. “College attainment is increasingly becoming less equal”, was your testimony. Another way of saying that is that our system of higher education, and I would say combined with our system of K-12 education, is conspiring to create — to compound income inequality in this country, rather than relieve income inequality in this country.
And it is certainly true, the evidence is absolutely clear and the — while we can speak it averages about the average experience that people have in this country, the way people in poverty intersect with our system of K-12 and higher education bears no resemblance to the way people that are more affluent intersect with the — with the system and I think it’s very important for people to understand that on this committee and in this Senate.
(inaudible) 40 years ago, if you were 22 years old, your Pell Grant covered 67 percent of the average cost of college. Today, it covers 27 percent of the average cost of college. Yet, interestingly enough, the average age of the United States Senate is 62 years old. So, when we were in college, we were content with the system that provided 67 percent of aid. But today it covers only 27 percent. That doesn’t seem fair to me, and I know the reasons why, but we have to figure out as a country, working with states and local governments, how we’re actually gonna provide a deal that’s different than — than the one people are getting today and looks more like the one people had when we had a rising middle class in this country. Otherwise, we’re not gonna have a rising middle class in this country.
The — in 2012, if you were in the bottom quartile of income earners in the United States, the average — the net average cost of the average college to you, after student aid is accounted for, after Pell Grants are accounted for was, I think, 85 percent of your annual income. If you were in the top quartile, it cost you 15 percent of your annual income. I don’t know what that is except a recipe for cementing income inequality in this country rather than relieving it, and I wish that — I’m — I’m sorry to go on so long, but I wonder the panel, I wanna start with you, Dr. Smith (ph)- Clayton, can us your best idea for how we can deal with it.
Dr. Alexander has spoken to it a little bit, but why don’t we just go down the list. Or tell me that I’m wrong. Give me the evidence that actually, our system of K-12 education and our system of higher education and the billions of dollars that we are spending on those, are actually diminishing income inequality in the United States of America.
If you’ve got that evidence, I’d love to see it.
SCOTT-CLAYTON: One thing I do wanna say is –is that part of the — the — the anxiety that we’re feeling, as you mentioned, is looking back on a prior era when it wasn’t this hard. Well, one of the reasons why it wasn’t so hard in a prior era is because not as many people were going to college. And so I do think we need to be a little bit careful. If we look internationally at the places where — where college is free, they achieve that by restricting access.
BENNET: That — that — that’s a very fair point. But I’d say in response, we are in a global economy today that was requiring that if you want to live in the middle class income family, you need some attainment North of a — high school education, so it only means it’s more challenging for us, because we had to do it. And the second thing I would say that is, from the perspective of the student, the individual, that’s pretty cold comfort.
SCOTT-CLAYTON: Absolutely. What is means is that the role…
SCOTT-CLAYTON: … the role of financial aid is more important than ever.
BENNET: … because while the purchasing power in this country for things like television sets and bicycles and other things have — have grown dramatically. The –the percent of the — of your income that you’re gonna have to spend just to hang on college is far — it’s dramatically different than it was 30 years ago.
Sorry to interrupt, I’ll stop.
SCOTT-CLAYTON: I — I completely agree with you. I think goal number one should be to make sure that every dollar that is invested has a maximum impact, and then let’s continue this conversation and — and — and not lead down the road of state disinvestment and federal disinvestment in — in student support.
AKERS (?): So, one thing, I think, that’s captured in your remarks, is the fact that prices increase dramatically, federal support for higher education hasn’t kept pace with that obviously, that’s in regard to your comments about the Pell Grants. What this means is that in order to invest in higher education, students have to become more levered than they were historically, so essentially putting all of their eggs in one basket when that wasn’t the case before. That just reflects the fundamental change in the market for higher education.
So, would I would add to that, is what they really emphasizes is a critical needs for safety nets, because as I said before, there are investments that will not pay off, despite the fact that they pay off on average, and those are gonna be an important and growing — part of the federal loan system that’s growing in importance over the coming years.
K ALEXANDER (?): The riches institutions in this country, the ones that are most capable of serving larger low-income populations, have the smallest number of low-income students and we need to re- incentivize this and reward the institutions who are the most affordable, and the ones that are keeping students out of debt, and who are serving low-income populations and serving them well. And that’s where the funding should go, and we should examine whether we should be giving money to industrial park universities that are leaving 50 percent of all their graduates default.
MITCHELL: I think you raise a wonderful point around the Pell and — and I wanted to — to stay at the federal level, one thing that could happen, is just making sure that we protect and maintain the purchasing power of the Pell. Currently, the maximum grant is indexed to inflation. However, after 2017, that will no longer be the case and that maximum grant will be frozen, which will only accelerate, kind of, the decline in the ability to Pell to help low-income students afford a higher education. So I think that’s another important point to keep in mind.
KENNEDY: I’d say we have to continue our commitment to the low- income students. We’re very fortunate in — in Indiana that we have a very good state aid program and we also use a lot of our institution aid because we want to have those low-income students be successful at our institutions. So I think we have to continue with that .
BENNET: Thank you, Mr. Chairman, I apologize for going over.
L ALEXANDER: Thank you, Senator Bennet.
MURKOWSKI: Thank you, Mr. Chairman.
And thank you, to each of you, very interesting panel here this morning, and I appreciate, very much, the comments by my colleague from Louisiana in talking about — this supplanting of — of the state dollar for federal and the direction that we — we really take in that regard. In looking at some of the numbers, Alaska is out there is as — as being one that’s still in the winning category, but not so much right now. The price of oil is down, we’re looking at a $2 billion hole in our budget, in our state’s budget, and so the pressure then, on — on the state and where dollars are going — for education is — is — is again, a consideration and a factor for us. And — and we are seeing, again, the same situation that you’ve seen with so many other states where you’re seeing state support for the University of Alaska system going down, the costs are going up for — for faculty, for — for maintenance. And so, as a consequence, our tuition costs also are arising.
So this is — this is a concern that I have and I’m trying to understand.
Dr. Alexander, you — you have mentioned several times now that we need to be leveraging the — utilizing the federal leverage that we have. You’ve mentioned, I think, $170 billion to reward states — again, how — how — how we as policy makers here, with tough budget situation as well, you know, you’ve got the states that are saying, “we can’t piece it together”, they’re looking to the feds to –to help do that. Do we really have $170 billion that we can provide for incentive to the state?
I understand what you’re saying in term of there must be way a to reward the states. But — but again, short of the actual appropriation dollars that we’re looking at, what — what more do we need to be doing to leverage the federal side?
F. ALEXANDER: Well, the — the $170 billion is the aggregate. I think you need about $10 billion to incentivize states. The — the argument is, we keep coming here over and over again to increase a Pell Grant…
F. ALEXANDER: … at a ratio that is much less than what are public universities are having to increase, so we’re completely negating any increase in student aid each and every year if we don’t close the back door, the back door being states. And if we don’t incentivize states to prioritize higher education, like we have highways, like we have Medicaid, like we’ve done other things, I do think that we need to put a priority on the next generation of students. And that priority is that we need to rethink how we’re using the $170 billion, because, as Senator Bennet pointed out, as Chancellor Charlie Reed once said, that “if you’re — if you’re poor and you’re smart, you have about a 10 percent chance still to graduate from college, but if you’re rich and you’re stupid, you have a 90 percent chance.” And that’s a quote that we gave here about five years ago.
Even despite the $170 billion that we’re putting into this to change that around, I’m hoping that we use those resources more effectively, encouraging states to remain affordable, encouraging states to…
MURKOWSKI: How do we do that more effectively, then?
F. ALEXANDER: … then you put matching funds on the table for states that put money into higher education or, at least, at this time, maintain the current funding levels in per-student funding for higher education. Those matching funds were utilized, certainly, in stimulus packages throughout the United States and could be utilized, and it could get our legislators to be more serious about not cutting higher education at a time when higher education is probably the easiest cut to make in every state in the country.
We set (ph) out there with no dedications, and that’s one reason why we’re declining at such a rapid pace.
MURKOWSKI: Well and I — I think we’ve — we’ve had good discussion about just this issue a lot this morning. I don’t want to belabor it more but, again, looking to those ways that we can encourage the states to make that commitment, I think, is gonna be huge.
Senator Collins mentioned a point, too, that as — as the states are — are making these decisions in where they find their cuts, the cuts, so often, come in the student services, the counseling, just those services that those who most need that — that help in understanding what their debt burden is, those are gone. And — and then the students are — are left hanging.
Mr. Kennedy, I appreciate the act that — that student loan debt letter that you’ve attached as part of your testimony. I looked through it, it — it looks readable, hopefully it’s just on — on one page, two sided, so that it’s — it’s there for the student. But, it’s — it’s transparent in terms of what it is that the student is then obligated for. I don’t know whether Indiana is — is on the cutting edge in terms of making something readable and understandable, and other universities are following suit. I’m gonna make sure that the University of Alaska system looks at it, because I think it’s helpful for us. And the more that we can do that, the more it’s gonna help as our students are — are trying to understand what they’re facing and the burdens when — when see these cuts and these reductions.
My time has expired, Mr. Chairman, thank you.
L ALEXANDER: Thank you, Senator Murkowski.
WARREN: Mr. Chairman.
So, we need to reduce the cost of going to college, but we can’t do it until we get the facts straight on what is driving the cost of college and how student loan debt is affecting our families.
Dr. Akers, you’ve written several analyses of the impact of student loan debt and you gave some summary of that here today. You use data from the survey of consumer finances, which is conducted by the Federal Reserve Board, but I noticed that your conclusion based on these data contradict the Federal Reserve’s analysis of its own data.
For example, you say that typical borrowers are quote “no worse off now than they were a generation ago” close quote, while Federal Reserve Chair Janet Yellen seems to think that many borrowers are worse off. Now, Chair Yellen analyzed federal data about families in the lower half of the income spectrum, and data show that in less than two decades outstanding student loan debt jumped from 26 percent of average income up to 58 percent of average income. That’s more than double.
Do you dispute the feds’ analysis of their own data?
AKERS: Absolutely now. So, I think that there’s room here for both of us to be of us to be contributing valid points to the conversation…
WARREN: Well, let’s start. So you think the Federal Reserve got this part right.
AKERS: … Sure, sure. I think they’re right. I think there’s — I think there’s truth in both of the — in both of the claims.
WARREN: Well, so let me ask about that. This is a huge increase in the debt to income ratio, and yet you say in your published work that you believe borrowers are no worse off than their counterparts were 20 years ago, and I’m trying to understand that.
AKERS: Sure, the basis for that statement, perhaps this is what I can occur here. So first of all, when we looks at the long run affordability of the student loan debts, we lean on the information that we have that the returns (ph) to college education are positive, on average. So, in a long run sense…
WARREN: So — so wait. The question is not whether or not it’s still good to go get a college education. I think everyone in this room signs on for that proposition. The question is whether or not people who are trying to do it now are in a much tougher spot than people who were trying to do it a generation ago? You describe it as no worse off and yet, based on your numbers, borrowers’ annual income over this time period has gone up by 17 percent, their debt load is up by 150 percent.
So, they have a little more money and a lot more debt over the last generation. How can you say they’re not worse off?
AKERS: … So, it’s important to remember that when we’re comparing income to debt accumulation, we need to be thinking about life —long income and not just annual income.
WARREN: But that is what we’re talking about.
AKERS: We don’t need annual income to keep pace (ph) on a dollar for dollar basis with amount of debt that’s increased or the increase in price, essentially, in order to do the cost-benefit analysis for — for college in general.
WARREN: I — I’m sorry, we’re back the original point. My question is not does it make sense financially but the time you’re 65 to have gotten a college diploma, it certainly does. I’m looking at your published statement that a generation today — today’s generation is no worse off than 20 years ago, and yet, all I can see is income has gone up 17 percent, debt has gone up 150 percent.
It seems, to me, that means that people today are a whole lot worse off on, on average, if they have to borrow money to go to school.
AKERS: Well I’ll offer an additional statement to support that claim, and that’s based on the transitive burden that student loan debt is — is imposing on the households.
So what we look at is what is the ratio of monthly payments to monthly income for the — these young households who are carrying student loan debt, and we see, surprisingly, I think, that it’s remained flat or even declined over the past 20 years…
WARREN: So, in fact, I looked at that part of your research, and with that part of your research says is that families today are stretching it out. A much bigger debt burden, but they’re stretching it out over decades longer than they used to. So you say they are no worse off even though they will be paying more interest, and they will be paying for a much longer period of time. They’re no worse off because they can pay more, they can pay longer, they can pay when they should be working on helping their our own children get an education, and when they should be saving money for retirement.
You know, a lot of people would think that being able to pay off your debt in 10 years versus being able to pay it off in 20 years or 30 years, you’re worse off if you have to make the same payments over a much longer period of time.
AKERS: … Yeah, absolutely. that piece of evidence alone doesn’t tell us anything about what’s happening to the long-run well- being of these borrowers and how it’s changed over time. There are two aspects of affordability, first is the long-run affordability. I think the best evidence we have on long-run affordability comes from estimates of the financial return on the investments, and then the transitive burden, or the month to month affordability…
WARREN: As I said, what we’re trying to get is the intergenerational because what I’m focused on is the question of whether or not kids are doing worse today. It just seems to me, based on your research and on the fed’s research, both of which show a substantial increase in debt loads, that is a serious problem. And I don’t think it’s responsible to sit here and claim that borrowers are quote “no worse off”, while people are still struggling to make much higher student loan payments than ever before and caring their debt for much longer than ever before.
It seems clear to me that the Federal Reserve, the Consumer Financial Protection Bureau, the Treasury Department, and other experts who’ve been sounding the alarm on student debt, got it right. Rising student loan debt is hurting our families and it’s hurting our economy. We need to make changes, we need to make them now, but that means taking an objective look at our student loan program instead of trying to sweep this problem under the rug.
Thank you, Mr. Chairman.
L ALEXANDER: Thanks, Senator Warren.
ISAKSON: Thank you, Mr. Chairman.
You know, I was thinking, when I listened to Senator Bennet’s testimony, I went the University of Georgia in 1962, which was back when the earth was cooling a long time ago. And I know things aren’t necessarily relevant, but I think we’re all sitting here sitting on a Sam — ham sandwich, starving to death. When I went to University of Georgia in 1962, they admitted every applicant who was a graduate of a Georgia high school. And Dean William Tate, who was the dead of students, would get you in the fine arts auditorium on the first, 2000 freshman. He’d say “look to your left and look to your right and one of you won’t bet here next quarter”. They managed to cost the university, through attrition of academic achievement where they took everybody who applied.
Today, at the University of Georgia, they have seven and a half applicants for every one person they accept, number one. Number two, the graduation is probably 100 percent, but is certainly in the 90′s, and every one of those student enters the University of Georgia on some type of scholarship, because of the Hope Scholarship Program.
So, we have a lot to be thankful for and in terms of what our education has done over the last 53 years. I remember my dad calling me in the living room, this is when I graduated from high school, and he said “Son, I’m gonna — make you two promises for higher ed. One is, if you go to the University of Georgia I’ll pay for the cost of your education as long as you don’t go one day longer than four years.” I went to the University of Georgia and I went to summer school for 3 summers to make sure it was four years when I got out.
Necessity is the mother of invention and I think there in lies a part of our problem. We need to start educating students on what it’s gonna take them to pay the debt that they pay and give them enough relevant information early in the decision-making process, so they borrow on a more — on a more reasonable basis, number one.
And number two, recognize our university system costs is in large measure because of the competitive nature of our university system. Everybody’s trying to have the best student personal fitness program, the best football team, the best library, the best everything else. We’ve got a lot of bricks and mortar costs and everything else. It’s going to continue to go up.
So my — the point I want to make is you can’t compare apples and oranges. You’ve got to compare apples and apples. And we’re lucky to be where we are. But we’re at a break point. We’re at a point where we may kind of invert because of the rising cost of higher education and because of the rising debt of students.
What you’re doing at the University of Indiana system is really remarkable. I agree with Lisa in terms of what she said about the letter (ph), but more often recognizing early that tracking students, making students aware of the cost of borrowing and helping them and counseling them in borrowing makes all the difference in the world. And I commend you on doing it. And we ought to be doing that at every institution in higher learning.
Secondly, there are lots of examples where students who have fallen through the cracks — minority students, poor students, people like that — are now being helped by universities. Two in Georgia, for example. Georgia State University has developed a program called Panther Grants, where they track 24,000 students at Georgia State University. If they see one falling through the cracks because of finances, they call them in. And more often than not, a small amount of money at a critical time in their education can keep them in school versus dropping out to work. Georgia State’s average Panther grant is $300, yet they’ve saved countless students from dropping out of school and going to work.
Georgia Tech has a program now called the Wayne Clough Full Scholarship Program, where if you’re academically qualified, and economically not able to pay for tuition, you go to the Georgia Institute of Technology on a full boat as long as you do $2,500 in student work during the course of the year. That’s the Wayne Clough Scholarship Program.
So we have universities in Georgia that are creating ways to bring those students who might fall through the cracks or the shrinking middle class back into our university system.
And I know I’m suppose to ask a question, and I’m not doing it. But the point I want to make is we’ve got a lot to be thankful for about where we are. I don’t know how much the state of Georgia has spent on the University of Georgia, but probably 75 percent of its revenues were in 1962 when I went there. Now, I think it’s 23.5 percent. I don’t know what Louisiana State is.
F. ALEXANDER: Thirteen
ISAKSON: Thirteen. What is Indiana?
KENNEDY (?): A little bit higher than that. I think about 18 percent.
ISAKSON: But most universities in the country are 25 percent or less — state universities. And that’s down from 75 percent or more 50 years or more.
But look at what we have as a product? So I think the important lesson on the cost of higher education is the university systems of the United States of America have an obligation to the potential students of those universities to give them the best debt education they can, the best timely information they can, and the best creative opportunities they can to continue to go to these universities.
And recognize every brick and mortar that you put on that campus contributes to the higher cost of the university that you’re running. And every now and then when we look for alternatives to bricks and mortar, we’re probably going to be a lot better off in terms of managing our costs.
You’re welcome to comment on that, if you want to, but I just had to get that out. That’s my story and I’m sticking to it.
L. ALEXANDER: Thank you, Senator Isakson.
Senator Casey is not here.
WHITEHOUSE: Thank you, Mr. Chairman.
It seems fairly recently that we had the news that student loan debt in the country broke through $1 trillion, and now appears to be at $1.3 trillion. So it’s accelerating at an astounding rate. And that behind those big numbers are stories like my constituent, Ashley Kennahan (ph) from Riverside, who is a nurse at Miriam (ph) Hospital, one of our great hospitals. She loves her work. She’s proud of what she does. But she may be an expert nurse, but she wasn’t an expert financier and she’s now carrying six different student loans, some of which have very high interest rates. She’s estimated her payoff is over $200,000.
And she’s looking around for fairly simple measures like: Is there a way to consolidate all those loans at a lower rate, given that we’re loaning the big banks money at virtually zero percent? Why not help students like Ashley, or I should say nurses like Ashley, because she’s through her student years?
And I think all of us are sympathetic to that problem. And I think we all want to help. But I think we also want to make sure that it’s really helping. And this business of flooding more student aid into the higher education system, if you’re not backstopping to make sure that you’re actually really funding the state general assembly by allowing them to offset every additional dollar you get with state cuts, and also taking the incentive out from the universities to meet any kind of basic cost — or at least cost reporting standards.
What — are there any good examples out there at the state level perhaps, or even at the individual university level, where somebody has addressed the danger of that kind of gamesmanship in the system and tried to hold both the university and the state alternative funding source accountable? Do we have good models to work off? Or are we in terra incognita here?
F. ALEXANDER (?): I think we have very good, viable good models. The key I think is protecting those models and protecting the institutions that have done exactly what you’ve said. Only 30-plus percent of the students that get out of a Louisiana state university graduate with any debt whatsoever. The national average is almost 75 percent.
We need support to stay where we are. We need support to ensure that the states help keep us where we are. If this continuation of a shift from the state to the federal student aid program moves forward as it’s been going, this trend continues where states get out of higher ed, the federal government picks up through programs, students will be in much, much greater debt each and every year as we go forward.
But there are many institutions that could be supported through state support, but also through federal recognition of the institutions nationwide who are affordable, who are keeping students out of debt.
WHITEHOUSE: Maintenance of effort is a doctrine that has a long history, often of rather squirrelly definition. Are there examples of how you can hold, for instance, a state’s feet to the fire on this, with terms that are more definite and more measurable and more — less amenable to gamesmanship than just the old maintenance of effort game?
F. ALEXANDER (?): Well, I can say that with regard to the stimulus package for higher education, it was the most important part of that stimulus package because you had many states that even cut their budgets within half a percent of the line that they couldn’t cross. And once that line was removed, those states cut their budgets back to 1994 and ’95 levels. They had nothing to maintain them at 2006 levels.
In addition to that, I’ll use ESEA and Title I schools.
WHITEHOUSE: Is that because this is something as simple and measurable as a state appropriation, and so maintenance of effort doesn’t get fogged into…
F. ALEXANDER (?): That you cannot cut below a certain level if you accept federal funds. And this also applies to ESEA and Title I schools.
WHITEHOUSE: And then what’s the university’s commitment not to just take now that extra funding, both from the federal government and the state, and give (inaudible) uniform and everbody…
F. ALEXANDER (?): I can speak on behalf of the public universities. The public universities’ commitment is we don’t want to go up in tuition. We don’t want to go up $900. If we get enough state support, or maintain state support, we don’t have to increase our cost. Therefore, our students do not have to incur greater debt on graduation, and/or students will get into debt at graduation.
WHITEHOUSE: My time has expired, Mr. Chairman. But I just want to let you know that I appreciate the process that you and the ranking member have embarked on on the Higher Education Act. I thought we had a really great outcome on the Elementary and Secondary Education Act, and I appreciate how well the committee is working together on this set of problems.
L. ALEXANDER: Thank you, Senator Whitehouse. I think we all have enjoyed the quality of the witnesses, and the opportunity to work together on such important issues. Thank you for your comment. Senator Scott?
SCOTT: Thank you, Mr. Chairman. And thank you for holding such an important hearing on such an important issue.
Dr. Akers, I appreciate you fitting the point on the core of the problem, and talking through the costs and challenges that so many students face in obtaining what I think is a very important component to success in America, which is, of course, more education.
As I’ve talked throughout the state of South Carolina with many of the presidents and colleges — at colleges — in South Carolina, I ran across a Dr. Miller, who’s a president at Greenville Tech, who talked about the important role that technical schools can play in reducing the overall burden and cost of education for students.
One point that he made was that if you compare Greenville Tech to other four-year institutions, the cost savings per semester is around $4,500 per semester. He also mentioned the fact that many schools, at least in South Carolina and other states, are moving to a model where you can allow — you have transfer agreements. So you lose no credits whatsoever.
Could you talk a little bit about the fact — if you agree, can you talk a little bit about the opportunities of reducing the cost of college by using technical schools? I think in Senator Alexander’s state of Tennessee, they’re moving towards making technical schools, virtually two-year schools, free.
L. ALEXANDER: Yes, that’s been done.
SCOTT: So if that is a fact, can you talk about the, A, many students want to go to the college of their choice and spend four years there; and, B, perhaps you can save 30 to 40 percent of the cost of education by going to a two-year school, and then transferring with those credits going forward to that alma mater of your choice, so to speak.
AKERS: Sure, thank you. So I think from the sentiment that you’re capturing in your remarks, we’ve placed a lot of emphasis on this dream of going to college, living on the campus, having this experience, which is in fact a great experience, a valuable experience.
But I think it’s pushing consumers away from thinking critically about the cost that they’re paying for college on the front end, and really being critical consumers in demanding their institution is providing a service to them that meets the dollars that they’re contributing.
I think use of community colleges or alternative non-bachelor- granting institutions as a stepping stone to higher eduction is a reasonable — an approach that’s probably underutilized.
SCOTT: Has anyone quantified the actual savings?
AKERS: I’m not familiar with work in that area, but it might exist.
SCOTT: OK. I spoke as well with some of our four-year institutions, and this question can go to whomever wants to answer it. You’ve talked — Dr. Pastides, University of South Carolina, and I talked yesterday about making Pell Grants available during the summertime again. And he talked about the opportunity cost that is lost in the fifth and the sixth year of education.
And if I have the figures right, part of the opportunity cost for the extra time in school for those two years, the fifth and the sixth year, is about $77,738. And so it seems like you’re spending more time in school. You’re actually, A, accumulating more debt, because typically your four years are done with your financial aid; B, you’re missing the opportunity of work and paying taxes, which is an opportunity cost as well.
So if someone wants to comment on, Mr. Kennedy, on the opportunity cost, as well as the savings if we were to make Pell Grants available during the summertime.
KENNEDY: Thank you, Senator Scott. We really liked having the year-round Pell, because we could use it for our students that were not completing the 30 credits. We’ve been really focused on the 15 credits per semester so somebody will graduate in four years. And we use the summer as kind of the makeup time. So if somebody’s not on track to graduate, they can use the summer.
And what we’ve found is the funding for summer is pretty limited. Most students have already used their federal eligibility. There’s a little bit of state eligibility. So we feel that putting that back in place would be very helpful to keep students moving through and graduating in four years.
SCOTT: One quick thought, Mr. Kennedy, while we’re on that topic, Dr. Pastides mentioned the fact that many of the interns in accounting and other areas are going to focus during a semester. So if you want — if you’re a CPA, or if you’re an accounting major, the chances of you getting an internship January to April is far better than June to August. So if you want to give that student the opportunity to get real skills at work, perhaps these summertime Pells actually allows that to happen more often than not as well.
KENNEDY: Very much.
SCOTT: My time is up. Did you have…
SCOTT-CLAYTON (?): Yes. I was just going to jump in with a couple points there. First, in terms of the student loan debt and the tradeoffs between a four-year versus a two-year or technical degree, when we hear about the $30,000 typical debt, that’s referring to bachelor’s degree graduates who borrow.
So if we look instead at two-year institutions, the rates of borrowing overall are far, far lower. And the amounts that students borrow, conditional on borrowing, are also lower. Students of those institutions, if they’re receiving a Pell Grant, are probably going to have their tuition fully covered, and even get some help paying with their other expenses.
SCOTT: So certainly would then reduce the cost of the four-year education for those students who transfer without any debt at all?
SCOTT-CLAYTON (?): Mm-hmm.
SCOTT: Mr. Chairman, my time is up, unfortunately.
L. ALEXANDER: Thank you, Senator Scott. Senator Casey?
CASEY: Mr. Chairman, thank you. I want to thank you and the ranking member for the hearing. One of the issues I think so many of us in both parties have been focused on is the issue of the middle class, or the inability for folks that at a more regular rate to get into the middle class.
And some of that is what I would call a 40-year (ph) wage growth problem. So we’re not talking about higher education when trying to solve the lack of wage growth over the last 40 (ph) years. We’re probably not getting to part of the solution. So this is a timely hearing in so many ways.
I wanted to focus more narrowly on the Perkins Program, and in particular, the value of it, but also the particular impact in my own state of Pennsylvania. We have over 50,000 students impacted by Perkins, more than 100 institutions. So it has a huge impact. And we know that it’s going to expire at the end of this fiscal year, September 30th of this year.
So I wanted to start with Dr. Alexander. In your testimony, you stated, and I’m quoting in part on the first page, you’re referring to recommendations you would make of, quote, “how the federal government can better utilize its fiscal leverage to ensure that there’ll be affordable public college and university options for students in every state,” unquote.
And I’d just ask you if you would include Perkins as one of those?
F. ALEXANDER: I would certainly. I think you can use any of the 170 billion. Perkins is in that 170 billion in support of encouraging states to do the right things, and remaining affordable. Perkins will grow if tuition grows. And the need for Perkins will grow.
Other campus-based programs that we’re aware of — FSEOG, as I mentioned, and Work-Study — also need to be carefully examined, because currently, they’re more price-based than they are student- based or institutional-based. And we need to examine the fairer share of which institutions are providing the best opportunities.
So — but all of that can be looked at, and can be incentivized to states so that states are also keeping their costs low, but also keeping student indebtedness lower as well as they go forward.
CASEY: In terms of your own institution, LSU, can you put a metric or a description of what Perkins means at LSU?
F. ALEXANDER: Perkins is very important. Because we’re lower cost, Perkins is vital to most of our institutions, primarily because we’re a poor state. We need revenues. We need support from the federal programs to offset what our states are unable to do.
My worry is that we don’t remain the affordable state that keeps students out of debt. And two-thirds of our students don’t graduate with any debt whatsoever. That’s the goal at the end of the day, is to keep our students out of debt as they go forward.
But if they choose to have debt, we want to make sure that they understand the low — the low interest rate debt, and we want to encourage them to take as little as possible, but enough to keep them on track to finish. So Perkins is very important.
CASEY: And the low interest rate connected to Perkins of course is an important feature. Mr. Kennedy, for Indiana, can you speak to Perkins in terms of the impact, or the value of it?
KENNEDY: Sure. Yes, I can, Senator Casey. We have roughly about $10 million a year we give out in Perkins loans to our low- income students. We feel it’s a very vital program, because it gives us some flexibility with the low-income students.
So we really like that program, and we’ve used it a lot just to help students, especially getting over, that have some issues financially. That extra little amount can really help them stay in school and finish their degree. So we really like the Perkins Program. We have strongly worked on that program at Indiana University.
CASEY: Great. And before I wrap up, about a minute, anyone else on Perkins? Any comments?
SCOTT-CLAYTON (?): I would just make one comment, that a concern is that students — students probably don’t know about Perkins until they’re already on campus. And it can be very confusing not only to have two different types of Stafford Loans, but also to have Perkins loans. So if there’s some way to get the benefits of the institutional flexibility while reducing the confusion and complexity that students face, I think that’s something to keep in mind.
And the second piece is the campus-based aid programs are extremely unequal in their allocation, and particularly with respect to federal Work-Study, which has been shown to be effective, it’s shown to be effective for the students who are least likely to be getting it right now, because their institutions aren’t getting sufficient funds.
CASEY: Thanks very much.
L. ALEXANDER: Thank you, Senator Casey. Senator Baldwin?
BALDWIN: Thank you, Mr. Chairman and ranking member for continuing in this series of important hearings. And as we take a deeper look at the investment that our states are making in our public university systems, I would make some observations about my home state of Wisconsin.
Unfortunately, we are seeing my home state as an example of this trend of disinvestment. Just as by way of example at our flagship university, the University of Wisconsin-Madison, state funds today account for only 17 percent of total revenue. This is down from 43 percent in the year 1974.
Earlier this year, our governor proposed further slashing state support for the University of Wisconsin System, cutting another $300 million in the next biannual budget. Last week, a key legislative committee approved a ever-so-slightly more modest cut of $250 million. If approved by the full legislature, this will mark the sixth budget in the last seven years that cut state support for higher education. And I fear this cut and others like it will limit opportunities for more Wisconsinites. It will saddle more families with student debt. It will dim the job prospects of the next generation and harm our Wisconsin economy.
I — I regret that I was unable to join this hearing during some of the earlier opening remarks. But I — I — so at the risk of having you repeat some of your earlier answers to questions and testimony, I guess I’m going to start with you, Dr. Alexander.
You’ve noted that this trend is sadly not unique to my home state of Wisconsin. Can you talk about the impact state disinvestment has had and could continue to have on students and families and the future vibrancy of our state economies, and frankly, just tell us what’s likely in store for the students and families in my state facing this massive additional cut.
F. ALEXANDER: We’ve watched Wisconsin very closely…
BALDWIN: I bet you have.
F. ALEXANDER: Because we’re I think you’re second in the budget reduction right behind us, and I’m very concerned about the cuts that are going on in Wisconsin, because I’m a father of a daughter that goes to Wisconsin, and I know my tuition and fees will be jumping rather rapidly.
In addition to that, I’m a graduate of the University of Wisconsin.
So I — without any utilization of federal leverage to encourage states and our state legislatures to keep their investments in public higher education, the consequences will be that this will shift on the backs of students and families, and the societal gain, or the societal support of our neighbor’s child will go away. It will become simply an individual benefit paid for by the families and the individuals who receive it.
That will become a sad day in this country when we do not have societal support on behalf of other state citizens to support other children who may not be our own. And that’s the direction we’re going, and that’s why I do think federal leverage is needed to encourage states to stay in the game and not abandon these commitments.
MITCHELL (?): And if I could just make two other observations specifically to Wisconsin, over the past few years, there have been significant tax cuts in the state of Wisconsin that have made it very difficult for policymakers within the state to put money towards higher education, cumulative cuts of around $2 billion over the past few years, largely in property tax and certain income tax reductions that haven’t actually even been targeted towards low-income households in the state.
So — so I think that’s very important to keep in mind, especially for — for potential budget cuts coming up in Wisconsin there. And then I also just want to point out that this shift that we’re talking about is not — is not as long-term as we were talking — as we sometimes communicate it to be. When we look at education revenues right now in the states, tuition is now about 50 percent of educational revenues, but even 12 to 15 years ago, it was only at around 30 percent. And so for lawmakers at the state level and at the federal level, I think it’s very important to keep in mind that it’s not so long ago that we have made a commitment to higher education funding.
BALDWIN: Thank you.
L. ALEXANDER: Thank you, Senator Baldwin.
MURPHY: Thank you very much, Mr. Chairman.
Thank you for sticking around for the last series of rounds of questions from those of us who had other committee meetings to attend to, and let me add my thanks to the chair and the ranking member for the way in which we’ve conducted this discussion.
I wanted to continue to talk about this question of accountability. I’m totally on board, Dr. Alexander, with the idea that you know, we should look at higher education funding in somewhat of the same way we look at transportation funding, whereby we require a minimum state contribution Medicaid funding by which we require a minimum state contribution as the numbers go up from the federal government. It just seems like we should expect something from the state governments other than cuts after cuts after cuts.
But a number of your testimony also talks about this idea of return on investment for the student, which is not just about the amount of money they’re spending, but it’s about the outcome that they receive as well. And so when you talk about accountability and affordability, it is all relative to the benefit that they get once they graduate, and the amount of money that they’re making, whether that lives up to their expectations when they made the decision to take out all of these loans in the first place.
And it strikes me that as part of this conversation, and I’d love to get the range of thoughts from the table, that we should be talking about a couple additional things. One is making sure that students have really good information when they decide to take out loans as to what the predictability is going to be of their ability to repay it.
Today, we just don’t have that data. We just don’t have the ability in part because of a ban in our statutes on something called a unitary student record, to actually tell students what the average graduate of a particular institution is making, how many of them are employed.
But the second thing we can do is have a little bit tougher accountability for schools at least to catch the outliers who aren’t delivering results. Right now, the only hammer we have is this default rate, this cohort default rate.
If 30 percent of your graduates aren’t paying back their — are defaulting on their loans, not paying back their loans, then you’ll get cut off from student aid. But that’s it. We have no other way to try to push schools towards accountability. So should this be part of our conversation about affordability, giving students some more information about the return on investment that they’re going to make, and perhaps talking about some you know, maybe even at the outset, light touch tools that the federal government can use to try to ratchet up the accountability for results that schools are getting?
AKERS: Thank you so much for this question and comment.
So the first thing I want to respond to is the need for better data on student outcomes, as well as better data about student loan repayment and default. There are critical holes in a researcher’s ability to figure out what’s going on, let alone students and their families. And there are movements afoot to make the problem even worse by limiting — by limiting a researcher’s ability to use student record data to look at things like what are the outcomes of students who enroll in and complete different degree programs. So I think that’s a very important point.
The second is that going back to this discussion about affordability, affordability of cost is just one half of the cost- benefit equation. And it’s pretty complicated enough, just to figure that piece out. But besides that, students also have to make complicated tradeoffs about which program is right for them and what their outcomes are likely to be if they go.
So I think providing better information as — as there have been movements to do, is helpful, but students do need more than just information. They need guidance. They need individualized and proactive assistance to make these decisions. And there may be some light touch things the federal government could do just pushing out information on where students can turn to for support with these decisions.
But I think if — if the feds could simplify the federal financial aid piece of it, again that would free up resources, community organizations, volunteers, college counselors, high school counselors, to help students with the even more difficult question of where they should go.
MURPHY: My time is running down, but I think there’s a couple other people who want to jump in, so.
F. ALEXANDER: I think you ought to take a look at the institutions that are fighting against this type of information. I’d love to have a blue book where parents can walk in and assess what the value of that institution is, because there are many institutions that are overcharging in this nation, and we had to get in the last reauthorization act, legislated, they had to admit how much student indebtedness they had.
We post what our starting salaries are. We post what our mid- career earnings are, age 42 to 45. We post what our student indebtedness is upon graduation. That’s what parents want to hear. That’s the information that they can’t get through private news sources, and that this value-based discussion needs to be pushed forward from the federal government to force every institution to admit outcomes.
MURPHY: Dr. Akers, a little over my time, but…
AKERS: Sorry, I appreciate it. I couldn’t agree more that we need more data available on student-level or institution-level and program-level outcomes that students can use to make better decisions about where to go to college, where to invest their dollars.
We talk about creating a system of accountability, but we’re sort of ignoring the most fundamental system of accountability, which is the consumers choosing where to spend their dollars in higher education.
So improving access to that data through potentially creation of unit records system or other means, I think would go a long way in creating the appropriate incentives for institutions to be serving their students well.
MURPHY: I just remember an incredibly sophisticated young man at a preparatory school in Hartford, Connecticut Public Schools saying that he was taking out a boatload of loans to go to MIT because he had made the decision that it was going to pay off for him, but the other kids around the table you know, just glazed over. They had no idea what he was talking about, because they had really no — you know, information about how to make that choice and no information given to them about the ways in which they would go about doing that.
So thank you very much,, Mr. Chairman.
L. ALEXANDER: Thanks, Senator Murphy.
This has been a terrific discussion, and you can see from the interest of the senators that we all feel that way. Let me ask Senator Murray if she has any further questions or comments that she’d like to make.
MURRAY: Well, I do have one more. Dr. Scott-Clayton, I want to come back to you.
You noted that the Pell Grant can cover tuition and fees for some students, like those who enroll at community colleges, and more students ought to recognize just how affordable college really is. But students and families in my state tell me that tuition isn’t their only expense. It’s in fact less than half of what they have to pay just to survive.
The federal data that I see shows that students from the lowest income families have to pay almost $12,000 a year for college after the grant aid. And I wanted to ask you, do you think we have done enough to make college more affordable, or should we providing additional support for long-time students?
SCOTT-CLAYTON: I don’t think we’ve done enough. I do think we can do better. I do think absolutely for community college students, tuition is not usually even the biggest barrier. So there’s been programs to such as the ASAP program at CUNY, that make tuition completely free, and the designers of that program were actually surprised that that was the — not the expensive part of the intervention. The expensive part was the metro cards and the student advisors.
So I do think we can do more. But let’s also make sure that students know about the aid that’s out there.
MURRAY: Thank you, Mr. Chairman.
L. ALEXANDER: Thanks, Senator Murray.
I have just a couple of questions. Mr. Kennedy, we had testimony at a March of 2014 hearing from two financial aid directors who said there that federal laws and regulations prevented colleges from requiring financial counseling. One said institutions are not allowed to require additional counseling for disbursement. We can offer it, but we’re not allowed to require it. Without the ability to require it, there’s no teeth in it.
Do you agree with that, or do you find our rules and regulations in your way as you try to step up your counseling efforts?
KENNEDY: Mr. Chairman, I feel the — what we’ve done with financial literacy kind of adding on to it, we have a major required. We’ve had great participation in that.
So we haven’t been hindered, I think, in our efforts with those regulations. But I think it should be strongly encouraged, with our success, that any type of additional counseling is very much needed and should be appreciated.
L. ALEXANDER: Well, do you think you should be prohibited from requiring it?
KENNEDY: I would say no. I think whatever we can do, I would strongly encourage.
L. ALEXANDER: Yeah. Thank you.
I’ve — among the things I — I heard today, importance of counseling and importance of clear information. The importance of reducing complexity as a way of releasing this army of people who could advise on — on other things. I thought I heard general approval of the year-round debt — the year-round — the year-round (inaudible) to help speed students through more rapidly, and in fact, hopefully reduce the cost of college if you get the workforce more — more rapidly.
One senator mentioned, I wouldn’t — we loan money to big banks at zero and to students at 4.29. That’s not exactly right. We loan money to banks — the Federal Reserve loans money to banks overnight at near zero. We loan money to students for about 10 years at 4.29. I think it’s also important to — to go back to where I started.
The message that always comes through at these discussions is how much more we’d like to do, because it’s never easy to pay for college, never comes through quite as clearly how affordable things are. I mean, if you’re a low income student in Tennessee, community college is — is — or if you’re any kind of college graduate, high school graduate in Tennessee, community college is free. If you’re a low-income student in any state, community college is free or nearly free. If you’re a four-year student at the University of Tennessee in Knoxville, 75 percent of your tuition is typically covered by student aid.
And the president of Georgetown pointed out that even if you wanted to go to one of the so-called elite universities, and you’re willing to borrow $4,500 a year and work 10 to 15 hours a week, the university will pay for whatever your family can’t. And the average student loan is about the same as the average car loan.
So all that information suggests to most students, there’s a way to go to college.
The last thing I would want to discuss a little bit before we conclude is with I think we have Alexanders going in different directions here. Dr. Alexander would have the federal government require states to spend money on higher education. I’d go just the opposite direction. I would say the federal government ought to stop requiring states to spend money on Medicaid.
And I know anecdotal evidence isn’t sometimes as good as research, but I’ve had a vantage point that’s pretty unique. I mean, I’ve been a governor in the ’80s and a university president and a secretary of education. Now I’m here. And I’ve watched Medicaid spending in Tennessee go from eight percent to as high as 33 percent of the state budget. And I’ve made up those state budgets. And what we did was we took money from higher education and put it into Medicaid. And I resisted that. And during the time I was there, we increased funding for higher education more than any other state for three years. But it was a struggle even in the ’80s.
So this isn’t anything very recent. And the reason for it is very simple. The federal government defines what the Medicaid benefits are. It mandates what states should do about them. The states have to pick up 30, 40, 50 percent of the cost and the percent goes from eight to 30 percent in Tennessee. And — and it’s exactly true that the reduction — that as state support for the University of Tennessee or LSU goes down or California, tuitions go up. But I believe it’s exactly true that as Medicaid mandates get stiffer, tuition goes up.
And if you — if I were the governor of Tennessee still, I would be saying the reverse, Dr. Alexander. I would be saying, “give us more flexibility, give us fewer federal definitions and fewer maintenance of efforts, and let us put the money where the priorities are.” And my priority was on higher education. Our current governor’s on higher — higher education. He’s the one who — who made community college free in Tennessee, which really doesn’t cost very much money, actually, because it’s almost already free for — for every low-income student.
So, why would you, Dr. Alexander, I’ll ask you this. Why would you adopt a policy of more federal mandates when it’s federal Medicaid mandates in my opinion that have basically caused the higher tuition fees at LSU, Tennessee, University of California, and every other state institution in the country?
F. ALEXANDER: I think two points I’d like to make with regard to that.
By the time you get that behemoth turned around get that tackled, we’ll have 15 states that’ll be out of the public higher education business that will not be funding a single penny of higher education from Colorado to South Carolina to Louisiana to Iowa. The second point is that we did have 48 governors against us 10 years ago when we proposed the maintenance of our provision through the National Governors Association was completely against it. We got Governor Schwarzenegger to be neutral on it.
And as that went forward within the six months to a year, those maintenance of effort provisions mattered to 20 states immediately. So our response to the national governor’s association was if this was such a bad idea, why did it work so well and why did our states only cut their budgets to where the federal penalty kicks in?
So the effectiveness, that period is the only time of fiscal stability we’ve had with our state governments. And without some kind of federal support, without a redesign of how we’re using federal funds to at least encourage states to stay in the game, I think it’ll be well too late at the end of the day for our states. They will bow out.
And I think it’s my responsibility to do everything I can to fight for the next generation of students as others have done for an aging population in healthcare.
L. ALEXANDER: Yeah, well I’m completely opposed to a federal maintenance of effort for higher education. I think that hinder — I mean, if you have that, you might as well just have the federal government take over all the states. Wouldn’t be anything left for governors or legislators to decide. And so I would respectfully disagree and say that my goal would be to — to increase flexibility in the spending of Medicaid funds and allow states to take that money and put it into higher education, because for 30 years, I’ve watched it go the other way.
But we’ve had a lively debate in this committee about that for veer since I’ve been here, with very different opinions about it, and we’ve had a good one from the panel today. So been very helpful.
If any of you have additional — Senator Murray.
MURRAY: I just wanted to make one comment. We won’t debate Medicaid right now.
L. ALEXANDER: OK.
MURRAY: Although I would say that many of the students who are trying to pay their tuition don’t want to have their parents who are in nursing homes all of a sudden be living at home with them as an additional cost.
But that’s a debate for another day.
I will just say that this panel has been excellent, and I really do appreciate all of your input. I think the cost of college is a roadblock to many young people today, and the long-time burden that student debt puts on them, it’s a complicated question, and one I really think our committee needs to tackle in a bipartisan way. I appreciate the chairman’s emphasis on the FAFSA form, and I think that’s an important area that we can look at.
But I think the whole issue of college affordability is very complex, and one that does need to be tackled comprehensively, so thank you very much.
L. ALEXANDER: Thank you, Senator Murray.
We’ve made good progress. I mean, I think as most people know, we were able to deal with the Elementary and Secondary Education Act in a good way after seven years of failure really. And we’re applying — trying to apply the same sort of bipartisan participation to the Higher Education Act and getting very good participation by both Democrats and Republicans thanks to Senator Murray’s leadership.
Our hope is to be able to have a markup for the higher education bill in the early fall. We’ll see. We’ve got some more hearings to have: a lot of work to do between now and then.
But this has been very helpful. I’d like to invite the witnesses if they have something to say but they didn’t get to say it today, we’d like to hear it.
And the hearing record will remain open for 10 days to submit additional comments and any questions the senators may have of you to follow up.
We plan to hold the next health hearing on reauthorizing the Higher Education Act on Wednesday, June 17th. Thank you for being here. The committee will stand adjourned.
Jul 10, 2015 20:58 ET .EOF