tv House Education Labor Committee Hearing on College Affordability CSPAN March 17, 2019 1:49pm-5:24pm EDT
president trump and first lady melania trump attended services on sunday morning at st. john's episcopal church in washington, d.c. to mark st. patrick's day. the president made the short trip to the church, located two blocks from the white house via motorcade. according to a reporter traveling with the president, a word to celebrate st. patrick's day. >> next, a hearing on college affordability. they are testifying for the house committee.
chrm. scott: the committee on education and labor will come to order. i want to welcome everyone. i note for the record that a quorum is present. the committee is meeting together at a legislative hearing, to hear testimony on the cost of college, student senate reforms to bring higher education within reach. pursuant to committee rule 7c, opening statements are limited to the chair and ranking member. this allows us to hear from witnesses sooner and provide our members with adequate time to ask questions. i now recognize myself for the purpose of making an opening statement. this morning marks the first of five bipartisan hearings which
will inform our work and competence of reauthorization of the higher education act. i want to thank the ranking member and her staff for working cooperatively with us to arrange all five of the hearings. i also want to thank our witnesses for being with us today to answer questions and provide their valuable expertise. our timing could not be better. yesterday's news was a powerful reminder that elements of our higher education system are in desperate need of repair. the alleged use of bribery and fraud to gain the college admission system illustrates the reality that our higher education system, that is students from wealthy families and students from poor families are not treated fairly. it is important to note that all of the indicted people in this scheme are entitled to the presumption of innocence. at least one has pleaded guilty, so we know this scheme was going on. the reality of this is maddening
and inflammatory, illegal, and systemic inequality in college admissions that ultimately robbed countless students of their chance to reach their full potential. our education must be an engine of economic mobility for all students, not an instrument for preserving the elite status of wealthy families. in rewriting the higher education act, we have the opportunity to address many factors that prevent students, particularly students of color and low income families from attending institutions of higher education and those same factors often perpetuate racial income -- racial and income inequality. this committee has a difficult challenge in competing proposals released in the last congress, the republican act and the democratic aim higher act illustrated the vast differences in our approach to higher education. this hearing will begin the process of finding areas of common ground.
the goal of our work in this community in higher education is not just to write a new higher education bill but it is to pass a comprehensive higher education bill. accordingly, we propose to work together in a bipartisan way that produces a bill that can pass the house, pass the senate, and beside by the president. students, families, taxpayers, and institutions of higher education deserve a good faith effort on our behalf to address the urgent challenges facing the higher education system. today we are discussing one of the biggest challenges, the rising cost of college. the cost of attending public colleges has risen dramatically in recent years, from 1990 to 2015, the median household income increased by 12%, but the net cost of attending college increased by 81%.
while the president johnson signed the higher education act, he said that a high school student anywhere in this great land of ours can apply to any college or any university in any of the 50 states and not be turned away because the family is poor. that could have been the case in the 1960's and 1970's, but it is not the case today. in 1980, the maximum pell grant covered 76% of the cost of attending a four-year public college. today, the maximum pell grant covers only 29% of that cost. there are many factors that have led to the rising cost of college, but none more significant than the decline of state investment in higher education. you have a check on higher education? this shows the change in investment from states where it red is how much less they are paying and the blue is
how much more they are paying. we can see that a decade ago, states paid on average two thirds of the cost of higher education. today, pay on average less than one third of the cost. going from two thirds to one third, doubles the cost of education to the students and it is only going to get worse. adjusted for inflation, 45 states spend less per student in 2018 and they did 10 years before, in 2008. as tuition continues to outpace old wages and pell grant scum it should not be a surprise that students and their families are asking themselves if college is worth the cost. research demonstrates well supported responsible institutions of higher indication answers overwhelmingly, yes it is worth the cost. it remains a good investment for students and families as well as low income immunities and the national economy. than apically earn more high school graduate over their lifetime. individuals with an associates degree earn $400,000 more than a
high school graduate. in economythree jobs are filled by individuals where more than have school education. --are seeing this chart after the recession, you seize those with a college degree recovered in those with just a high school diploma on the bottom did not do well are those in the middle got in between. you can see those with college educations did much better during the recovery. college educated workforce is good for local economies. everyce shows that for dollar invested in state education, they received $4.50 in return and lower spending on public assistance. the also invest in universities.
they represent employers around the country and in rural areas, they are the largest employer in the county. we know that economic competitiveness is to a large extent aced on the availability of well-trained, well-educated workforce. even though college enrollment and completion is economic competitiveness, only 40% 25 to 34 have received that credential. in canada and japan, it is 60% who have received post secondary education. we do not address the rising don't talk about the cost, we will lose our competitiveness and students will learn -- lose out on a college degree. this is for low income and people of color. today we will consider a broad range of solutions to make
college more assessable and affordable for those of all backgrounds, including halting increases in college costs and encouraging more state support. expanding eligibility, including short-term-high-quality programs that provide valuable technical skills and a path to two and four year degrees, and making college student loans cheaper and easier to pay off while providing additional support for low income systems, including federal work study programs. of theidence benefits of college are all around us. thehe 1/15 congress -- in 115th congress, we found all senators had college degrees and 94% of the members of the house held at least a bachelors degree. not beall people, should
encouraging students from seeking the education that got us here today. we need to take up ansys steps to address access and affordability. -- we need to take steps to address and access affordability. i now recognize the ranking member. >> thank you, mr. chairman. thank you for your commitment to working on this issue in a bipartisan fashion. this hearing cuts to the heart of why postsecondary education reform is necessary and white it is so difficult to accomplish -- why it is so difficult to accomplish. it is necessary because colleges so expensive. tuition and fees have risen higher than the cost of inflation. cost varies between different types of institutions. it is hard to know what action would provide the best value for
the unique needs of each student and their families. here is a way to put the cost of college into perspective. if the price of cars had risen at the same rate tuition and fees have if the cost of a car had risen at the rate tuition has, the average car would cost $80,000. this is why change is difficult. high costs always mean high payouts for some. as a former college administrator, i know firsthand the complexity and ripple effects of budget decisions at the institutional level. sometimes, it takes creativity and resourcefulness to manage an institution finances well. sometimes, the easiest way to grow your budget is to use the old business mindset and pass costs to the consumer. arehis case, consumers
students and families, and they are not willing to pay the high costs anymore. i must say, i don't believe every college administrator in the country is giving students the consideration they deserve when deciding how to manage institutional finances. any discussion of college affordability must discuss -- must involve serious questions about institutional accountability. that todaymore about and i hope we will all have the courage to confront those who seek to maintain the status quo at the expense of students for their own benefit. the role of the federal government in trying to help families pay for college is a classic example of the unintended consequences of good intentions. on top of grants, the federal government has five loan programs, eight
forgiveness programs, and 32 forbearance options. $onehas added up to over point 5 trillion in student debt and counting, a number -- $1.5 trillion in student debt, a could not government have imagined. ofs is a symptom deeper, systemic flaws in american post secondary education and perhaps, more importantly, popular perceptions in values. i have long said we need bold reforms in post secondary education to make it work for students again. i put those ideas forward. i believe in comprehensive reform today more than ever. however, i am happy to acknowledge that there are a few bright stars in the system as we
know it. the pell grant was the cornerstone of federal student aid. today, there are ways to strengthen the pell grant program in ways that may not have been evident in previous decades. that goes back to my points about public perceptions. our skills programs meeting the needs of communities in which i believe, would see a higher and more satisfying rate of return. post secondaryve education is in a cecily, and they are not wrong in thinking that way. as we all offer ideas of what post secondary education can look like for students of every age, the question of how they will pay for it looms large. i am glad to see increasing interest in this issue and i
academic affairs, and legal affairs. of has nearly 35 years experience in higher education in three countries in both public and private universities. today is the first and her family to graduate from college. at franklinnrolled university, a four-year institution where she plans to obtain a bachelor's degree in human resources management in the fall of 2020. she is a student parent, and her eight-year-old daughter joins us in the front row today. fellow --is a senior ath akers is a senior fellow on brooking institute center
children and families in a staff economist on president bush's council on economics. she worked on federal student lending policy as well as other education and labor issues. she received a bs in mathematics and economics from albany and a phd in economics from columbia. james quayle is president of the institute for college access and success, a nonprofit organization that works on issues of affordability, accountability, and equity in education. he previously served as the deputy director of the white house domestic policy council in a senior role in the u.s. department of education. senate.lso in the u.s. he taught at the university of madison school of public policy and attended stanford university and harvard law school. we appreciate all the witnesses for being here today. we look forward to your
testimony. we remind the witnesses that we have your wit -- your written statements. they will appear in full in the -- eachrecord, showing of you is asked to limit your oral presentations to a five minute summary of your written statement. we remind you it is illegal to knowingly and willfully present false information to congress. please remember to press the button on the microphone in front of you so you will be able to turn the microphone on and members can hear you. as you begin to speak, the light in front of you will turn green. after four minutes, it will turn yellow to signal one minute remaining. when the light turns red, we would appreciate if you could summarize your testimony and wrap it up. will make panel presentations before we begin questions. we first recognize dr. weber. scott,er: chairman
distinguished members of the committee, i sincerely thank you for the opportunity to testify today and for your interest and devotion to college affordability. my name is doug weber. i am an associate professor of economics at temple university where i focus on higher education finance and returns on college investment. access,ility is about the value of a degree, and the risk associated with the investment. i say with great confidence that college is a risk worth taking for the vast majority of individuals and is worth the considerable public investment that we have made in trying to ensure that a quality education is affordable for anyone who wants it. at the price of college has outpaced inflation over the past several decades, making college less affordable. the high price and prospect of significant that deter low income students, including highly qualified low income students, from enrolling. higher debt loads and the fact that we have a conflict
repayment system that does nothing to automatically place distressed borrowers into income driven repayment plans has increased student risk, especially students who do not complete a degree. the factors driving the increased price of college are complex and greatly across sectors. my research has found that -- in publicutions institutions, state investment is responsible for roughly 30% of tuition increases in the year 2000, 41 percent of increases since the great recession began in 2007, possibly the biggest single driver, the returns to very high levels of education such as a phd in the private sector increased dramatically over time. in my field of economics, the combination of modern computing scalelogy and economic .as taught in most phd programs private-sector sector salaries for economics phd half to rise
substantially. this increase in competition from the private sector pushes up the salary that the university was offered to hire an economist. the difficulty here is that like instructional costs are driven by market forces completely outside the control of the university, tuition increased, low income individuals have found themselves with little money to pay for college and the purchasing power of pell grant's has declined considerably over the maximum available pell grant. as college prices have increased and the purchasing power of pell grant's have decreased, more students are working during school. 70% of college students work. over half of those work more than 20 hours per week. it's problematic as the need to work this much has been shown to lengthen the time it takes to get a degree and also reduces
the likelihood that you will get it. more students are taking out loans. today, 69% of students use loans to pay for college. the average student leaves with roughly $30,000 in federal and nonfederal debt. although need-based aid is needlessly complicated, it does help students enroll and graduate. the picture of affordability is complex. the value of a college degree has never been higher, but the downside risk has also increased over time. in one striking statistic, a high achieving student from a low income family is less likely to graduate from college than a low achieving student from a high income family. the wealth gap impacts student outcome, especially when looking at division by race.
much research has been done on this. i think there are many areas of bipartisan agreement that will lead to a better future for students in this country particularly related to accountability, which is something i have done a lot of work on. thank you for the opportunity to come before you today. i am eager to help in any way i can. thank you very much. chairman: thank you. >> good morning. i am the interim chancellor of western carolina university, a globally recognized university in the north carolina system. our mission is to serve our region and our community. our student volume reflects that. approximately 43% of our students are pell grant
recipients and 40% are first-generation college students. hasern carolina university enjoyed great success over the last seven years. enrollment and retention have increased. our six-year graduation rate has risen from 50% to 60%. we know the lions share of the work we need to lift families out of poverty happens at universities like ours. we take that responsibility very seriously. bold andent it a innovative program created by a forward thinking north carolina legislature to strengthen our role as an instrument of economic mobility and to provide access to affordable higher education that leads to timely graduation and transforms futures for our students. long andolina has a proud history of public universities and we are ranked
fifth nationally in pupils and per capita spending. capitale and per spending. we recognize that a college education drives economic development and creates jobs and strengthens community. north carolina general assembly took important steps for public higher education. in 2016, the general assembly instituted a tuition program that guarantees student tuition will not change for eight consecutive semesters. , increasesng year can be no more than 3% per year. creation ofw the -- of the country's oldest of mc promise, which sets perion at 500 dollars semester for in-state students
and 2500 dollars per semester for out-of-state students. the state pays the difference between what it used to cost to the tune of $51 million the first year alone. , that's one point five times the investment in an innovative free college program. to goal is increased access higher education, improved affordability, reducing student debt, and continuing to grow north carolina's economy. i hear from students every day that this program is a game changer opening doors and changing the trajectory of their lives. it is setting them up for success beyond their expectations. promise positive effect on student debt is significant. under nc promise, pell grants,
scholarships, and institutional aid go a lot farther. at western, an in-state student can graduate in four years and save approximately $12,000, nearly the cost of attendance for a full academic year. is it working? unequivocally the answer is yes. at western carolina university in fall 2018, enrollment grew by 6.6%. at the two other nc promise by 14% ands, it grew 90%. at western carolina university, the number of first-time full-time freshmen increased by 10.5% and transfer students by 40.5%. of our newthird students with significant financial needs that had it not been for nc promise, they would not of been able to attend any college or university. these numbers are hard to
ignore. located ins are historically underserved parts of north carolina. they are historically minority serving institutions. this program is a targeted intervention to lift up the communities and families who need it most. there should be no question that an educated leadership is essential for economic development. affordablet an college degree can transform a student's future. the nc promise program is a resounding win for all. students when. families win. the state wins and we are a step closer to creating a better economy and a thriving life in the community. >> ranking members of the
committee, chairman scott, thank you for the opportunity to testify. the price of college is something i know a lot about. so does my eight-year-old dollar. the chance to eat pizza between classes may seem like a mini vacation, but i suspect the reality is far more common. it needs to be a greater part of the conversation about the real college experience. i am 29. i am a parent, like one in four college students. i am a single-parent like 14% of college students. i went to the university of toledo. .oney was so tight the university cost when he $5,000 a year. i got a pell grant -- $25,000 a year. i got a pell grant and borrowed the rest, and worked.
it was exhausting. i could not focus on school. two years later, i dropped out. time passed. i got married. i had journey. i got divorced. in 2013, i was working full time and decided to try college again, this time at columbus community college. i juggled full-time work and full-time college while raising my daughter and caring for my mother, who had fallen ill. i love school, but when my mom passed away, i also had to care teenage daughters. the third time i enrolled part time and worked several part-time jobs. it was slow, but it was the only way i could afford school. our bills got so tight, we ran out of money for food. we lacked enough money to eat regularly. we were evicted.
i thought this was my fault. 80% of college students are dealing with food and housing insecurity. more than one in 10 are homeless. are we all not college material? have we all done something wrong? people need childcare, health insurance, food stamps, scholarships, and housing. earned myr of 2018, i associates and transferred to franklin university where i am now pursuing a bachelors in human resource management and plan to pursue a graduate degree in psychology. for people like me, the only way to go to college and eat is to use food stamps. what happens to the millions of students who can't get that help? the u.s. government accountability office recently said 2 million students are having trouble paying for college but not getting help from snap. most are first-generation
students. many are single parents. for me to go to college i have butnow my child is safe, childcare facilities have long waiting lists. .ome cost too much some students have no childcare at all. i am here to represent students and students like what journey will become. i know i will probably not escape poverty. but college will help. on days when money is tight and bills are due i wonder why i am paying the price for a badly broken system. what would happen if congress created a system that matched students like myself? i hope my story makes clear how desperately we want to improve our lives and how very real the struggle has become. thank you for your time. >> thank you.
>> good morning, chairman scott, and memberser foxe of the committee. research finance in higher education. i am first in my position as staff economist for the council of economic advisers. thank you for the opportunity to share my testimony here today. college is expensive and getting more so every year. inflation combined with growing enrollment among less well-off students is driving student borrowing to pick up year after year. the current outstanding balance is $1.5 trillion. it's the highest in history. to remember that spending on higher education is, on average, worth it. the increased earnings that, with a college degree tends to outweigh the cost of enrollment. this makes debt a reasonable
mechanism to paying for college. a problem ofh affordability, it's an issue of liquidity and being able to draw from future earnings and not an issue of price. statistics.n out by a dental student managed to amass $1 million in debt. the vast majority of borrowers have small balances, reasonable payments relative to income, and are eligible to take advantage of programs in times of financial hardship. the reality is that few borrowers have astronomical balances. 5% of borrowers had balances in excess of $100,000. many of those borrowers had completed graduate programs that would lead to high-paying careers. while it is the responsibility of the media to cover the
extremes of the few, i am afraid this has distorted the magnitude of the problem. but knowing they are in the minority will provide little comfort to borrowers who find themselves underwater. nor should the frequency of this problem because lawmakers to turn a blind eye. many students are spending on college only to turn out worse financially than if they had not gone. riskge is risky and the makes it untenable. -- makes the cost untenable. a small number of important changes could bring us closer in line with our collective objectives. we need to shore up the safety network for borrowers and make sure it is fiscally sustainable so that all students, not just those who are intensely factorally savvy, can
finances into enrollment decisions. we need a single loan program that collects payments through a plan tied to monthly income. there will always be a tension between a safety net and the motivation to be self-sufficient. moral hazards are inevitable. we also need to work to mitigate the financial risks of enrollment by empowering consumers with better information. the scorecard of the obama administration was a tremendous step forward. we need to improve and expand the information available to students as they shop for college. we need to make spending work harder for students and taxpayers and remove inefficient channels like tax benefits and interest rate subsidies to the
places where they will do the most good. subsidies should be a single means program that delivers the most aid to the least well-off. changes and ways to support new, low-cost business models that can put pressure on prices at all institutions. innovation in the higher education marketplace is currently limited by constraints on access to financial aid. we should continue to work the work started by the equipped togram and explore how best extend federal student aid dollars to low-cost providers. lastly, i encourage you to reject the growing demand to make college free. no market failure exists that isn't rectify a ball through subsidies, credit, and --
through subsidies, credit, and changes to education, innovation, quality, and adequacy of supply. thank you for being here. i look forward to answering all your questions. >> thank you. >> chairman scott, ranking members of the committee, thank you for the privilege of being here today. american colleges and universities are nearly unmatched in their potential to create opportunity and raise living standards. over the last generation, we have had a sea change in how we pay for college. it has driven up tuition for the three quarters of students who attend public universities and community colleges. higher costs mean many students
do not enroll. there is a long line of research that suggests that each additional thousand dollars in cost decreases enrollment by 3%-5%. students work long hours part and full-time, often at academic expense. some go hungry or homeless. students get a degree within six years. the most common reason given for dropping out is to earn more money. it is not surprising that students with higher earning parents are more -- are five times more likely to hold college degrees. latino students are only half as -- latino adults are only half as likely and black adults only one third as likely. growing college costs have created a concentrated crisis in student debt. while most students benefit from college and repay their loans, millions fall behind, default,
or see their balances grow over time because their payments are smaller than accrued interest. struggling borrowers tend to smaller loans because they dropped out. other students complete but attend low-quality programs. certificate programs at for-profit colleges leave students worse off than average because their increase in learning is smaller than their student debt. over one million students per year default on their loans, suffering punitive consequences that could drive them deeper into debt. the experience of black are worse in particular is deeply disturbing. in particularwers are deeply disturbing. a high percentage end up in default. i have three recommendations. first, congress should supplement the pell grant to the
-- should double the pell grant. should increase programs faster than inflation and make pell grants a true entitlement irrespective of the economic cycle. federal efforts to make college more affordable cannot succeed without robust state investments alongside them. a new partnership with states to ,rioritize low income students consider the full cost of college, not just tuition, and address equity and issues of low income students and students of color. finally, congress should make it easier to repay loans as a share of income. students with income driven repayment plans are less likely to fall behind, payback more, and are financially healthier overall. however, improvements are
needed. the five existing programs should be combined into a single plan that sets repayment at 10% of income above a living allowance. it should be easier to enroll and certify income and after 20 years of payment, any remaining balance should be forgiven. some final observations. first, too many unnecessary defaults occur because of the low quality of the students who loans for the department of education. i urge congress to hold these companies to higher standards. second, the loan forgiveness programs encourage students to become teachers, nurses, first responders, but the program is far too complicated and poorly run. in the first round of applications, 99% of applications were denied. we should retain this program but simplify it.
some colleges routinely leave students with unaffordable loans. i urge the committee to carefully consider how accountability could affect the value of what colleges offer students and taxpayers. after decades of shifting costs to students and parents, it is important to remember that we all have a stake in this. investing in pell grants, working with states, and ensuring loans are affordable are a reasonable path to bringing about the society we want. >> thank you. i thank all our witnesses for their testimony. we will begin with member questions. i will reserve my questions to the end. we call in the chair of the higher education subcommittee. for being here, particularly our students. to the process than some of us are.
, also want to mention, briefly we all know how many students and parents are anxiously awaiting letters of admission today. and how powerless they must be feeling when they know they work hard, played by the rules, and yet, we have the scandal we are all going to be following. it hurts many communities, including in san diego. will behat community hit hard. i wanted to go first to dr. weber. you mentioned public tuitionions increasing and cutting spending. can you talk about how cutting spending can be even more detrimental than increasing tuition? >> absolutely. i amuld mention first that legally blind so i apologize if
i am not making contact -- eye contact with you. there are many low resource institutions that simply are not able to provide the services that many at risk students currently need for graduating. as we have talked about already today, the students at the don'tst risk are ones who get the degree but do get the debt. spending cuts hurt the likelihood of graduation. that's intentionally more damaging than a rising cost. >> how do you suggest our public institutions address this problem? what are they doing, specifically? >> there are many ways the states have tried to address this. with are number of states
programs like north carolina. my colleague might be better equipped to address that than i am. investment of the state has been unprecedented for north carolina, and as a result, being able to ensure that students receive the kind of support they need to be successful is paramount. having the option to increase the number of students and the need forrease increase students and decrease the need for resources. >> can you talk about how that matters to the outcomes? we have students who are taking longer in some cases. that might be ok, but it also costs more to do that. and it's a greater burden on the institution. how have the outcomes been ?epresented in that way
>> the north carolina system is part of a strategic plan. with north carolina promise, what we are finding even in the first year is that we had an increase in enrollment. to see that increase because of a reduction in the cost of attendance really means that we have to be sure we have the resources available to make sure they are successful in graduating. resources need to be put in place so that we can retain successful,they are graduate on time, and leave to get good jobs and become successful members of the community. about were talking accountability as well. you have all mentioned that in thes of attend some of
for-profit institutions to be able to graduate and pay back loans because of their earnings. ofning a reasonable amount money that represents their effort. could you speak about our our veterans,ow active-duty personnel and their shortchanged been on many levels and are really a of these institutions? >> we have seen an increase in high-pressure recruiting tactics by for-profit colleges focused on service members. there are two reasons. the g.i. bill benefits and military education benefits can be quite generous. the second reason is that
for-profit colleges by law can only receive up to 90 percent of their revenue from federal student aid but that limitation does not apply to veterans or military benefits. so, for every veteran they g.i. benefits, they can enroll an additional nine students with federal student lows -- loans. that has led to some of the .xtreme pressures on veterans >> i hope at some point we can talk about how the federal government can address that. >> the ranking member will defer. >> thank you. miss parker, you hang in there. you are going to make it. i want to confess that if it were not for the small university in my hometown in tennessee, i would not be sitting here today. i was -- i went to dinner the other night to not a very expensive place, two of us had
dinner, no alcohol, that cost more than i paid for college. stay home and graduate with zero debt and a father who was a factory worker and a mother who was a bank teller. college was very affordable. you could work your way through school. student nowmedical graduates with $175,000 in debt. that's a huge debt. the question is, is college going to be relevant anymore? it's a huge question to ask. i do want to offer my condolences to you for losing coach larry hunter. i booed him many times investable games but he is a great man. in tennessee, we decided that
education had to be affordable we createddents, so the tennessee promise. and now you can go to school in our state for free. school -- 77% finish on time, 97% are placed in a job, and 100% graduate with no debt. you can go out in our state and if you go from a community college to a four year college in tennessee, you have the hope scholarship to help you. we have tried to make it affordable to our students in our state. with ourying for that lottery scholarship. i have served on the foundations
of two boards and been the president of one, and i think that investment is the best i've ever made, no doubt. i have not heard you talk about places like vanderbilt that complain about administrative costs. they spend $150 million a year complying with federal mandates. i heard no one talk about that or stayed in your testimony how affects your fafsa. can we streamline that? take that question. >> that something i can chime in on. something to think about with , we all tryve costs to point a finger at this as potentially a driver of rising costs. i think we want to realize that
if we are looking at an institutions providing tremendous outcomes for students and they have large expenditures on administration, we probably won't question if that's an appropriate place to be spending. what happens inside a school is somewhat of a black box. i think what we want to be concerned most with is the outcomes they are producing. what is enabling these institutions to drive up there spending because of the increased revenue coming from increased sticker price intuition? >> when i sent my children to college, all i was interested in was how much of a check i had to write. and that check kept getting bigger and bigger. i looked at the inflation rate. i thought we were bad in medicine. we were actually pretty good compared to colleges. colleges have increased their cost by 80% over the last four years and -- 40 years and that's
putting college out of the reach of people like miss parker. i think colleges have to rethink -- with all this technology i have in my hand right here, i can learn a lot at no cost. if you look at going to georgetown, 75,000 dollars a year, if you then go teach school in johnson city, tennessee, that's hardly a return on your investment. if you end up a investment bakery and -- end up an investment banker in new york, it probably is, but you probably won't want to be a teacher. say you don't have to borrow the maximum amount. you are going to have to pay for it sooner or latter -- later. my time is expired. >> the gentleman forum -- from connecticut. >> thank you for holding this
hearing early. hopefully, this will be the year the 116th congress re-authorizes the higher ed -- it was 2008, the last time, and we are way overdue for this issue. every part of the country is looking for help and action. first of all, my friend from tennessee cited the vanderbilt report. if you drill down a little bit in terms of the numbers they , in terms of added cost, most of what they identified had to do with a research component of universities and colleges? and that's on human subjects which, i think most of us agree is not a bad idea. it's a number that, again, there is a report -- i don't dispute that -- but the number is more complicated than i think some of the reporting on it is. i checked this morning.
the u.s. treasury is selling 10 year notes at 2.6%. we use that as a benchmark for the stafford student loan problem -- program. even today, we are still getting back around 4%-5% in terms of from the student, so the differential, the delta between what the government is paying when it borrows versus what the students are paying when they borrow from the same government pure ripoff for the federal government. betweenrted that 2007-2012, the federal government had a windfall of about $66 billion in terms of that differential. an emergency loan refinancing bill. senator warren is introducing a companion bill in the senate
that would allow both public and private student loan borrowers to write down their interest which was7 percent, the rate in 2016. we know that would put about $50 million into the pockets of students and folks who have graduated who are struggling with student loans. obviously, refinancing a home mortgage, car loans, credit card debt, that's a tool that is normal, but in the student loan market, because it's restricted on the public side by law and on the private side by the fact that you have two have equity in go finance some other type of property to write it down, this is the year we should move forward on that. of tryingast one way
to stop the bleeding. you talked about the harbor numbers in terms of default. at least being able to refinance an interest rate would provide some mitigation of that problem. would you agree? >> yes. sure anyone would disagree. i hope that would be the case. ms. parker, you talked about your story. thank you for being here. the private student loan interest rates are far higher than even the inflated stafford rates. maybe you could comment on if having the ability to write down interest rates would be a benefit to you and your friends. ms. parker: yes, it would be a benefit to myself and my peers. [laughter] >> congresswoman show layla is very excited about this bill.
ms. parker: i have accrued now -- you said in private. i have an6,000 and associates degree, so yes, it would be beneficial. >> thank you. would love to i say that the north carolina plan.e is a first dollar other free programs tend to be last dollar and relying on other aid first. this is particularly good for low income students. financial literacy is also something we need to make sure we are educating our students with. >> i am about to run out of time, but this was part of the aim higher act last year and we are optimistic it will be part of this year.
panel for being here. this, of course, is an unbelievably important subject for us to consider, and financial literacy is absolutely something we have not done well, and we are seeing the challenges of that. i often hear that the fafsa is a real obstacle to students continuing their education. i support legislation that would allow the irs to share income information with the education department, thereby making it easier for students and families to accurately complete the fafsa and access student aid. improve accuracy and cut down the amount of time administrators spend verifying student income.
in your experience at western is it youriversity, experience that the fafsa can act as an obstacle and what advice do you have for simplifying it? in complete agreement that the fafsa and the protocol to complete the fafsa is for some people and insurmountable position. a lot of our students, particularly at west carolina university are first-generation and come from low income backgrounds. when faced with questions for which they have to remember or don't have the information, they just don't do it. as a result, they don't apply and therefore they don't go to university or college. my recommendation for all federal grants and applications is to simplify them.
help people with the process. we do that at western carolina university when people approach us. i would love to see those and that would allow people the opportunity to get they deserve and have as their right. to thatave any addition from your experience? >> absolutely. i think your initial comments financial literacy are critically important. from my earlier research, we students are shockingly underinformed about financial circumstances. only about half students in first year college education know how much they are paying for their degree and about a third of students are able to
accurately tell you how much they borrowed. it's a pretty important crisis we have in higher education planning today. when ms. parker says 60 $66,000,t's amazing -- it's amazing. when you first started, did you expect anything like that in the process? >> not only did i not expect it, i had no idea. financial literacy is a big piece. i just wasn't aware. i wasn't informed. make the point very clearly as to why we have to move forward on this. in your testimony, you note that in some cases students are spending money on college only to end up worse off financially than if they hadn't gone to college in the first place. looking at the federal student aid system, i am concerned about
diverse incentives to over borrow. can you -- perverse incentives to over borrow. can you discuss what those are and how we can address them in reauthorization in a way that i can explain to my adult children how to care for their grandkids as they come up? >> the most glaring perverse incentive in the financial aid whoine is that borrowers anticipate they will be eligible for student loan forgiveness at facend of 12 or 15 years no marginal cost for every dollar they are are owing. imagine i am at an institution and have some idea what my career path will be because i am studying law or medicine where earnings are relatively well-known. i may reach a point in my
borrowing at a high cost institution where every additional dollar i take on in debt to support my lifestyle will very likely or almost certainly be forgiven. haveat's the case, i incentive to borrow as much as i am able. what is the solution? i think we need to consider limits on loan forgiveness and income-based repayment plans, putting caps those. >> thank you. lady from ohio. >> thank you so much. see you andure to to watch your daughter have such great pride as you speak. congress, surely, if we can provide $13 billion to farmers to cover the president's bad losing trade war with china, we can help you.
point, if we can give one $5 trillion in tax cuts to the wealthiest people in this country, surely we should be able to help you. and as we have just seen in the people cheat to get their children in college and you have done it the hard way. i am confident that you are going to be successful. i am confident that you are going to see your way out of poverty. because you have worked hard, you are committed, and a lot of these cheaters are not. be confident. just claim that, all right. you are going to be successful. dr. kvaal, do you think that it is important for us to discuss cash loan forgiveness as we talk about income driven repayment plans? dr. kvaal: i do. ms. fudge: what should that discussion be like? dr. kvaal: my view is that students who are paying everything they are supposed to pay over a period of 20 years, should at that point in time
have an opportunity to have the rest of their student loan forgiven. 20 years is a very long time. we know that student debt affects your credit score and makes it difficult to save for mortgage. after 20 years you may be trying to save for your children's education. i think there is an opportunity there where we need to say that we have collected what we can collect. ms. fudge: is this something we can do to help somebody like ms. parker? dr. kvaal: there are a couple of things that -- people that should qualify for special help. one is people who go into public service careers. and we know that student debt is an obstacle and does affect career choices and that can make it a challenge to recruit people into military and teaching careers. it impacts the diversity of those public service work forces. i think a second category is people who have been cheated by
their colleges and are currently over offer 100,000 borrowers having applications pending at the education department claiming fraud or some other illegal conduct. those people need to have them forgiven as well. ms. fudge: just one more question for you, dr. kvaal. grant plus loans. how do you believe that those loans assist with students and underrepresented communities or even fields for that matter to get to graduate school? what effect would there be if we eliminated them all together? dr. kvaal: graduate plus loans are an important source of finance for many people, pursuing graduate and professional degrees, especially people whose families are low in wealth. including communities of color. and we expanded access to federal loans for these communities because we were concerned that otherwise they would borrow higher costs, private loans that have interest rates that can be as high as 13%
or 14%. ms. fudge: dr. morrison-shetlar, since you represent with a university that deals with a loft first time and low-income students, what do you think we should look at to try to reduce the ongoing and sometimes exorbitant rate of loans that people have to take out, what do you think we should do differently? increasing pell grants? give me your ideas. dr. morrison-shetlar: i certainly would approve of reducing the costs. there are a lot of grants as we heard, loans out there. are i would like to see those simplified in terms of applications and more investment in those pell grants is a good example. with over 40% pell grant eligible students at western carolina university, we could see tremendous amount of reduction in indebtedness with
all of the results that occurs from people graduating on time. not having to do three or four jobs to be able to make it through. which distracts from their time of really focusing on their education and future careers. i'd like to see what we're currently doing expanded. and make sure that it's easy and relevant to be able to apply for those students. ms. fudge: thank you very much. i am ' going to close with ms. parker. we live in a country where people say if you work hard you'll be successful and do well. i want you to know that those people who believe, people like you are lazy, are you a perfect example of someone who is not. i wish you-all the very best. i yield back. chairman scott: thank you. the gentleman from kentucky, mr. guthrie. mr. guthrie: thank you, mr. chairman, for yielding time. thank you for the panelists for being here today. this is important hearing, appreciate the chairman for calling it. dr. akers, according to a study by the brookings institute, only a quarter of first-year students can accurately report how much
they had borrowed? 14% of students who borrowed money felt they had no debt at all? this information problem is very concerning to me which is why i have introduce add bipartisan counseling bill with my friend, congressman bonamici from oregon. in the last three kongs to last three congresses to enhance financial aid awareness and understanding. the bill would require more detailed and annual counseling for federal aid he recipients throughout their education. can you discuss the benefits of counseling students on their financial aid? dr. akers: sure. a lot of folks are looking into the fact that the provision of information about the cost the students are facing and the aid they are receiving is unnecessarily difficult to
digest. they are receiving right now their acceptance letters to universities and also their financial aid award packages. these packages are not often completely transparent about the difference between loans and grants. this is leaving students questioning what exactly their financial circumstances are. it's leaving them questioning that because we were able to document that using survey data. if we want students to be able to police the market for higher education using their dollars, choosing to spend at institution that is are delivering good outcomes for students, they need to understand what it is they are paying. they need to understand what it is they are borrowing. we want them to understand what it is that institutions are delivering to students that they have served previously. i think it's critically important to the system and also to individual students themselves. mr. guthrie: dr. webber, with $1.4 trillion in outstanding student loan debt, no doubt
students are struggling with debt. in your testimony you noted the large amount of misinformation on who is suffering the most from taking on loan debt. can you please explain what level of education students with $60,000 or more debt are seeking compared to the average balance of defaulted loans? ms. willis-brown: sure. on average the -- dr. webber: an average student who has more than $100,000 in debt is very rare. we're talking 5% of borrowers. most are people who have gone to graduate school, received professional degrees, mid school going to pay off in spades. not all of them. i don't want to minimize the problems that it's a distraction from the much larger problem of people who say they have $5,000 or $10,000 in debt but did not graduate, attended a low value institution, under resourced institution, and because the vast majority of the college premium is tied up in actually getting the degree, then having $5,000 or $10,000 in debt, which is not dischargeable in bankruptcy, are you going to be much, much more likely to
default under that scenario than someone with graduate professional degree and much more debt. mr. guthrie: doctor morrison-shetlar. could you elaborate, i know in kentucky we -- a lot of people are getting their two-year degree and moving on straight into our four-year universities with transferring credit. when i was in the state legislature i worked with someone to do dual credit. we have people graduating from high school with their associates degree. i think there is some cost to it, but it's not typically if they graduate interested high school and went. could you explain what you guys are doing to keep college costs down by working with community colleges. dr. morrison-shetlar: the great thing about western carolina university we work with all of our community colleges. we set up m.o.u.'s through particular traction of education so students when they go to the community college know what they
need to take at the community college that will count toward their four-year degree. and so we work very closely with the presidents and with the admissions office and with the advising office, which i think is a key component to anyone transferring from one institution to another. at western we have 42% of our students are transfer students and make sure that the curriculum alignment is in place and also the advising that they are getting at the community college is an affiliation with that at western carolina university. a seamless transfer is really important. curriculum alignment is really important. mr. guthrie: thank you. my time has expired. i yield back. chairman scott: the gentleman from the northern mariana islands, mr. sablan. mr. sablan: thank you very much. mr. chairman, thank you for holding this hearing. good morning to all the panelists.
i hope that you will remember forever this moment in your life and how your mother is sharing her story with us because that story is a part and major part. i'd also like to take an opportunity to, privilege to recognize in the audience a student from the northern mariana who is attending school here in washington, d.c. olivia. so your name is in the record for good. she doesn't like that. i come from a place where we have a community college, two-year college. 90% of our students all apply for pell grant. and when i went to college, i was -- i had to come here as a foreign student.
my father had a family of seven children to raise, and was making $1, $1.25 an hour. he lost his job. i couldn't just go and get a job because i needed to get immigration. it wasn't easy for me to finish college to be very honest. ms. parker, congratulations. you are in my prayers. you will succeed. i agree. our chancellor morrison-shetlar, you may not know, this my district in northern marian and american samoa are the only two jurisdictions without a four-year public university. our students face the cost of nonresident tuition at four-year institutions. as well as the extra travel costs to attend school in hawaii, 4,000 miles away from home. or almost 8,000 miles away from your school. as a member of this committee, i worked and continue to worked on legislation to help reduce the
cost for my constituents. i must compliment your state for committing the resources to be able to offer -- make college affordable and make sure the student areas a university chancellor do you believe the federal government has a role to play with assisting students with unique college costs such as those from american samoa and marianas? dr. morrison-shetlar: i think the way to help people is to make sure those grants and loans are available and able to be easily attained. in north carolina we subsidize the in-state students up to $500 per semester.
we also have a $2,500 for out of state. we also have an 18% cap on the number of out-of-state students we can take into north carolina. that's something that one has to be aware of when we're funding the students in north carolina. i will say that we're very fortunate western carolina university and within the system, 50% of the students who come from out-of-state to north carolina end up staying in the state of north carolina. that is a great investment in north carolina. it allows people to give back to their economy. mr. sablan: thank you. we heard you educate your students and come back home and use what they learn.
ms. parker, college students in the marianas and across the country, one in four students nationwide are parents, more than one in three are older than 25, and almost two out of three work while in college. what supports maze it easier for to you remain in college, persist? ms. parker: thank you. thank you for your wishes earlier. i have been supported -- i have been connected to resource. and that's what's enabled to get me to completion. for example, the biggest help i would say was being connected to the jobs and family services representative on campus. i went to visit the representative for childcare costs. i needed help to get childcare costs to be approved while i was in school and journey was in daycare at the time. when i went to speak to the job and family services representative, she also let me know that i could enroll for additional benefits. so the health care, food stamps, and i was also referred to -- not through her but scholar health for the student parent housing.
it takes a platform for all of those together to be able to get to completion. mr. sablan: my time is up. i do -- will submit questions for the record. chairman scott: thank you. the gentleman from georgia, mr. allen. mr. allen: thank you, mr. chairman. thank you for this hearing. it's important to find out what is actually got us to this point and try to fix it. it's a difficult situation. we have avenue got -- we've got 7.4 million jobs open in this country right now. we have college graduates that can't get a job.
i cannot for the life of me understand that. and everywhere i go people need people. it's not necessarily a college graduate. you have skill people. of course the chairman put up a chart up there about the difference in the wages of college graduates versus those who maybe had technical training and all that. that gap, in my opinion, is narrowing very quickly. i know when i was in college i had the opportunity to learn how to weld. and through that skill i was going to co-op and through that school and working basically double time and help from my parents, i was able to get through it. i thought it was terribly expensive back then. i'm sure i missed out on some of the college experience, but i had no college debt thanks to my great family and their support. i can't imagine, ms. parker,
what you have been through. and also to straighten out one other thing that came up here today, i just have to do this, is that i did notice you were on the food safety nutrition program. one of my colleagues brought up the farm bill. 80% of the farm bill is funding the safety net nutrition program. it's not farmers. we're just trying to keep our farmers in business so we can produce the best, safest, most efficient food supply. it's a national security issue, actually. since you are here and learning from us and we're learning from you, i thought you probably needed to know that. with that, dr. akers, your testimony mentions ways to bring private capital back into the student loan space.
increase competitive market participation in student lending. can you expand on those issues and discuss any challenges, policy lakers should think about are considering private sector participation and student lending? dr. akers: the question about private sector participation in education or the financing? mr. allen: in the financing. for example we were told that the student loan rate is somewhere between 7% and 8%. i know that -- i come from the business world. we borrowed money for much less than that. obviously you might have to get some small business government back loan, but you could reduce the interest rate substantially and provide a -- where ms. parker could go and say, well, the government is charging me this and you -- give her choices. also the financial institutions do a much better job, at least i have to do a portfolio and tell
them how i pay the money back, maybe they could educate ms. parker on how to pay that money back. dr. akers: there is a bit of misconception about the idea that private sector capital was previously involved in the lending programs. depending how long you have been involved in this issue, we previously were providing federal student loans through the program in which the loans were originated and financed by the private sector. but those loans were originated using terms that were prescribed in legislation. in essence department of education was outsourcing to the private market, the creation of those loans. those loans were not private sector or private loans in any broader sense because they were not underwritten.
what you are talking about is the process by which a private lender looks at a particular borrower and assesses their ability to repay in the future. that does not happen in the federal lending program for student borrowers and did not happen even when private capital was involved. the way forward to think about private capital in higher education finance is in the income share agreements. income share agreements are a relatively newly employed mechanism that are an alternative to loans that help borrowers finance their education. rather than taking out a loan and having fixed payments to repay over 10 years or whatever the term of the loan is, a borrower takes cash up front in exchange for a promise to pay a fraction of their income over a set period of time this. provides an insurance policy for students that if they pace low-income or no income for whatever reason, they are not on the hook for unaffordable financial obligation. and also puts some skin in the game for institutions. in thinking about private capital going forward, i think that's the place to be.
mr. allen: i had an amendment on the past a bill markup to somehow put financial -- actual education into the student loan programs. like ms. parker would understand what she's up against. i'm out of time. i yield back. chairman scott: thank you. the gentlelady from oregon, ms. bonamici. ms. bonamici: thank you for holding this hearing. thank you to all of our witnesses. ms. parker and journey, especially thank you to you for being here and telling your story and reminding us of the costs of higher education are not just about tuition. housing, childcare. so many other costs as well. i also worked my way through. i started two years of community college, two years of college, three years of law school. combination of grants, loans, and work study. and ended up because it was a long time ago with a manageable amount of debt. my first job was with the federal government not with the law firm where i could have made more money. unfortunately that's not the story i hear frequently today. i'm glad we're having this hearing. especially when we're talking
about students who remain underrepresented. i'm also glad that there seems to be a general recognition about the importance of higher education among people here today. we certainly need a short-term solution for people like ms. parker with existing debt. we also need long-term solutions to make sure that anyone who wants to go to college can do so without being burdened with debt. mr. kvaal, nice to see you. the federal work study program allows students to get work study experience and financial aid. i have introduced the opportunities for success act to reform work study program to modernize the funding formula which has not been done for quite some time. and also to make sure that work is going to -- the work study
jobs are helping to align students' work with their career goals and interests. we want the aid to go to the students most in need. what are your suggestions about how to make sure that institutions are serving the largest number of low-income students and they are having to align their interest with their work study jobs? dr. kvaal: thank you for the question. i share your support for the work study program. work is an important strategy for getting students through college both because it fills important gaps in financial aid budgets, but also research shows that modest amounts of work can actually help retain students and give them an opportunity to explore career interests and improve their earnings potential after college. the challenge we have is many students are in the same low-wage work force as other low-income americans. we know those jobs are very unstable, can be difficult to get askedles. to have an opportunity for a work study program where jobs
are designed around schedules students, they are often on campus, connected to career and academic interests is very valuable. the existing work study program funds colleges largely historically and it doesn't -- no longer sends the money where there are large numbers of low-income students. for example, new york university gets a larger allocation than cuny does. in you are -- if are you a low-income student at a four-year private university you are more likely to get work study than a low-income student at a public university. we know public university is disproportionately enroll low-income students. ms. bonamici: i want to get another couple message in. it's time to update the funding formula. thank you for mentioning my simple act that i have been working, i plan to reintroduce this bill, which will protect many borrowers from default by getting more students and keeping more students in income-driven repayment. and you mentioned importance of automating the annual income recertification process and also automatically enrolling severely delinquent borrowers. these are both changes in the simple act.
can you talk about how this will help students? dr. kvaal: the income driven repayment is an important safety net t allows us to tell students by think loans are an excellent investment, but if it doesn't pay off we guarantee loan payments will be affordable. they are a very important. changes that need to be made to the program to simplify the program for students, make it easier to enroll, auto enroll, delinquent students. i think the simple act has a lot of potential to reduce loan delinquency and default. ms. bonamici: i also heard retention several times this morning. that's a significant issue. especially if we look at the students with debt. if they don't graduate, they are less likely to be able to pay that back. who wants to talk about the importance of gear up and trio and programs that help with retention? dr. dr. morrison-shetlar: all of those programs with resention and it's key that if you have
students who have debt that you get them through the process and you get them to a point where they can start to work and eastern money and pay back those debts. those programs you are talking about are essential. they include things like financial literacy. they include things like working, if you are going to work, work in something that will get you the experience that will help to you succeed in your career. their career pathway experiences. all of those things help with retention. making sure that students can focus on their studies. get their work done. without having to work on two jobs is important. any program that will help students be able to if he cuss and get through their degrees and be successful. i'm fully supportive of. ms. bonamici: thank you, mr. chairman. chairman scott: thank you. the gentleman from pennsylvania, mr. smucker. mr. smirk: thank you. question for dr. shetlar, i
would like to learn more about your transfer program which helps students prepare for several high demand career fields. how did you term what jobs are in high demand in the work force? dr. morrison-shetlar: within western north carolina we do surveys. we look to see what jobs are available. in particular what jobs are needed. in our particular area health care is a big industry and one which we're severely need for the citizens of western north carolina. and so we make sure that we're providing the right programs with the right qualifications and right experiences so that students will then graduate and
go into those careers and be successful. that lifts up the whole economic development of our region. >> can you talk more about the agreements you have in place with some of the partner colleges? was it difficult to reach those agreements or talk about how that came about. dr. morrison-shetlar: we all have the same goal in mind four our students to be successful . to do that we need to make sure we have curriculum alignment. if you take two years of community college and your a.a. degree, those credits transfer into your four-year degree and go through a seamlessly as possible. advising is really key on that. we do joint advising between the community colleges and university. making sure that the advisors know what to say to the students if they even are thinking about going to a four-year degree. a lot of students go to community college not thinking they are going to have that dream. advising is a real component. making sure that those memorandums of understanding between the colleges and universities are clear and updated regularly. as curriculum changes to meet the needs of our growing industry like health care. mr. smucker: in your mind, what could other regions learn from you? what obstacles would they have
to setting up similar arrangements? dr. morrison-shetlar: it's all about communication. it's all about what's best for the student and making sure that pathway is one that is affordable. and n.c. promise has been fabulous because the cost to the student can be similar to a community a college cost. and therefore if a student has managed to get through the two years with the cost of that, to be able to transfer to western carolina university, for example, as an n.c. promise school, means that they are already on that pathway. they know they can afford t they know how much debt they are going to incur and know they are going to get a high quality education provided by high quality faculty and staff to make sure they have the experiences needed to be successful.
mr. smucker: dr. akers, innovation in any industry is critical to increasing competition among providers and delivering high quality product to consumers at a low price. and it appears that colleges and university, we know education is changing, but in some ways continue to use the same model that's been in existence for a long, long time, for decades, and maybe longer. how can we be helpful, or maybe to what extent do you think the federal government sort of constrains what colleges and universities can do, how can we work with you to encourage more innovation in higher education? dr. akers: in order for a new institution to come into existence, they need to be able to find and retain students. it's challenging for them to do that in the current space because they are competing with institutions throughout the
eligibility for very generous aid through the pell grant program and success to student loans. the way to potentially allow them access to federal student aid is through the experimental sites initiative and equip program. this is an effort started under the obama administration to allow innovative institution that is don't fit the standard model of what higher education looks like in this country and therefore don't achieve the standards necessary to get access to financial aid, it allowed them to partner with traditional institutions and sort of play with federal student aid and experiment. that effort was not largely successful, perhaps because of the way it was designed. i would encourage that the federal government continue to support those types of initiatives, but don't just open the floodgates and allow federal student aid to be utilized by new and exciting business models without any accountability. but rather to continue to test out and using different sites and trial programs for these new programs that have a proven track record of success.
mr. smucker: i look forward to working with you. my time is up. thank you. chairman scott: the gentleman from california, mr. takano. mr. takano: thank you, mr. chairman. i do appreciate that you're holding hearings on this important topic. i want to thank all the panelists for being here today. i want to begin my question with mr. kvaal. it's good to see you again. thank you for being here to share your recommendations on improving college affordability. i have a letter from chancellor oakley of the california community colleges that describes how the california community colleges have been hit hard particularly by the for-profit closures in the state of california. what happens when for-profit companies suddenly shutter, community colleges, which are already under resourced, how they mobilize to provide support to affected students. without objection, i would like to enter this into the record. the ability of the community colleges to properly serve these students is severely hampered by the poor quality education students receive at the
for-profit institution and the debt loads students carry after attending. i have heard too many stories about students attempting to transfer their credits only to find out that almost none of their credits transferred. and that they are nearing the maximum -- their maximum loan limit. impeding them to continue their education. in this case community colleges. mr. kvaal, what can the federal government do to provide better up front accountability of for-profit institutions to better protect students? dr. kvaal: thank you for that question, mr. takano. we have seen over the last few years for-profit colleges enrolling over 100,000 students close and leave them in the bind. the instances you mentioned in california are only the latest in a long chain. it is important to have strong accountability protections such as the gainful employment rule, which requires that typical graduates of for-profit programs be able to repay their loans. the borrower defense rule which holds colleges accountable for
illegal conduct such as fraud. the incentive compensation rule which prohibits deceptive and high pressure recruiting. and the 90-10 rule which requires at least 10% of students being willing to pay for the education out of their own pocket. there are important accountability rules, many of them are being neglected by the current administration and others need to be strengthened by congress. mr. takano: i'm aware. neglect and rollback of protections. i understand in the chairman's aim higher act we actually work to strengthen some of the protections you mentioned. how do we ensure students aren't left with burdensome debt after a for-profit closure? dr. kvaal: one important step is to make sure students have their loans discharged after a school closes.
currents has been the right to choose whether to transfer or get their loans discharged. many students never actually do either. so it's important to guarantee them that automatic right to have the school discharged. we need to adequately fund tuition relief funds so students have that means. and we also shouldn't keep and we also shouldn't keep students in the dark. when the colleges closed last week, it wasn't a surprise, executives at those colleges. it wasn't a surprise to the department of education. it was a surprise to a lot of the students who were borrowing and dipping into their savings to go there. mr. takano: amazing. i want to talk about income share agreements or i.s.a.'s. that are contracts between college students and investors in which an investor agrees to pay a portion of the a student's tuition for a portion of the student's future income after graduation.
speaking frankly i see i.s.a.'s another way to push the private market on to students which has never resulted in positive outcomes. in an effort to shore up profits, the private market has been inclined to irresponsible and unfair practices when lending to vulnerable students which is what led us to include consumer protections of the dodd-frank act. i'm concerned with the potential abuse of students or i.s.a.'s. what other pitfalls of i.s.a.'s? dr. kvaal: i share your concerns. i think that private loans including i.s.a.'s will always have higher costs. and weaker consumer safeguards than federal student loans do. i.s.a.'s in particular are not transparent. and because students have very different earning trajectories sometimes because of labor market discrimination, i.s.a.'s have the potential to have higher costs for students and even exclude some students from some types of programs or colleges. mr. takano: my time has expired. i yield back. chairman scott: thank you.
the gentleman from kansas, mr. watkins. mr. watkins: thank you, mr. chairman. thank you for being here. i represent eastern kansas. it's agrarian and lots of poverty issues there. i know personally what it's like to try and deal with mounting school debt. it seems to me the solution was a pro-economic growth policy characterized by low taxes and low regulation that allows the economy to thrive and does it work. well, pro-growth has led to record unemployment, we're enjoying over seven million job openings. the labor department when reporting on hiring competition says that there's an increase in average hourly pay by 3.4% from last year.
which is highest in a decade. given the strong economy, dr. akers, are you seeing states beginning to thoughtfully reinvest into the higher education institutions given strong economic performance nationally? dr. akers: it does seem there was a decline in state support following the great recession. and we have seen recent indications of an increase in investment. >> thank you. staying with the red tape subject, would you speak to any burdensome federal regulations on the higher education somunity that could be cut you could spend more on students and education? >> one thing is meeting the client's regulations and needs. would be great if we could keep what we have that we have to report on or decrease it, which was certainly help us with that.
we are having to hire people to help us with that rather than using those resources to invest in education. >> thank you, chancellor. for being here. i yield back my time. >> thank you. >> thank you. some extra time on there. let me thank all of the first of all for being here and for your testimony. by your story. i am a retired professor of 40 years. in north carolina, greensboro, i worked with young women. i went to school like you and took my children with me and i know the struggle. when i was in school many years ago, the cost was not nearly what it is today. thank you for what you do for
our students. i would like to submit for the record a letter from a class from an organization that supports low income students. let me ask first of all, helped createu the north carolina program. i was a member of the house appeared when the discussion came up, i was a little concerned about not only the fact, i think we need to make college affordable, access and are really key for students. having worked at a private institution knowing a lot about historical black colleges in i had a concern about the cost the college would incur. pay. the students do you have any information, i
know they are a fun university. had an opportunity to talk with the chancellor. i am curious about that. i know it is a game changer for students but struggle for universities. >> this is a very ambitious program. this state has stepped forward. $51 million has been put toward the success of the program. you -- make sure there is no impact on the quality of that they are able to provide. withalso know universities, and this is supposed be three years, is that correct? >> no. for students, it is the time in
the university. >> ok. let me ask what considerations in terms of helping to get the program started? closely tod to work make sure it is fundable and something that was three in thesel institutions are from rural areas. sure the rightke people could access these kinds of programs. the ability to let people know >> thank you. this has focused a lot on people -- students of color and what they have faced. passes minority, a
sizable portion of black and brown students, do so at a fraction of a cost. the president passes budget, title iii and five, allows expire.t funds to if we were to increase federal is it you are thinking that we could close some gaps in terms of access inaffordability among students of color compared to counterparts? >> yes. it is not surprise that is one reason why the graduation rates are not as high. a quick question and i think this was spoken to in terms of understanding financial aid packages, but can we do to help them better understand it did if we could get a quick response -- quick response.
>> i think it is important specifically when students go from high school to college to educate parents, if you are talking about these economic generationalis a effect that something happened before it even got back to that one student. >> i think higher education is an incredibly complex product. i think it is justified that we much >>- that he very thank you. >> the gentleman from texas. >> thank you, mr. chairman, thank you for your testimony. what you described is very similar that north carolina is
doing, i want to complement you, it is similar to what the university in my district has done. university of texas in arlington. 8000 students including online source spare the fastest-growing campus. second only to austin. it has the lowest average debt college ins of any texas to one of the lowest in the united states. the average is like $14,700. one thing they use, similar to what you talk about in terms of partnerships with community they did something that i think a special and i want you to comment on this. university of community
school superintendents and toarea came together try and lower the cost for the students, high school students can go to the community college college courses and get credit and when they go into arlington, it is recognized and test by the university. a lot of students are taking advantage of that. that in termsof of your experience? do you engage the high school in north carolina to any degree? to directlyot speak with community colleges, but the idea is absolutely fabulous. anyway that we can make sure students have a seamless case or 16, it a great
thing to think about. timeyield the rest of my back to dr. fox. >> thank you. you discussed non-completion in your testimony and college the biggest risk associated with going to college. are you familiar with the revenue theory thesis where institutions are spending on faculty presti jen influence instead of on support services to help students graduate. interested only the highly priced academic programs received quality and student access. >> thank you. there is mixed evidence as to the impact of very highly priced educational programs. ofre are certainly impacts truly increased quality -- college quality. there are large earning its going to a high-quality
state flagship, regional comprehensive for any number of reasons. i do not think there is strong that these suggest universities and high-priced institutions, that there is a causal effect, of higher earnings were anything of note. in theinterested existing research behind the .rans we'll have college graduate annings who obtain education. the economic return on college is unequal across the population and diminishing across
generations of college graduates. what can we do to restore return on investment for higher education to make college less risky? estimatingence higher education, and there is a dispersion of what those returns are crossed different classes of particularly with respect to their families. i think the most important thing to consider in maintaining the value we have seen historic and higher education is ensuring that prices do not continue to creep up at the rate they have been going. formost important tool doing that is empowering consumers for information so they can make informed choices of where to spend. to the extent they understand where spending is where henan where it isn't, they can put pressure on institutions to keep price in line with value. >> thank you. mr. chairman. >> thank you.
>> ms. hayes. >> good afternoon. thank you for holding this critical hearing. your story is my story. you are me. everything you said resonates with me. i am incredibly from area -- familiar because this is my experience that i will disagree with you on one thing. you said odds are he will not lift yourself out of poverty. you already are lifting yourself i have to push back on that being a choice at all ever wanted to be is a teacher. i went to community college to
get a bachelor degree. you have to obtain a master's degree within your first five years and an professional certification. an entry-level job, i need a postgraduate degree. it is not a choice. i can feel your energy coming off of you finding other jobs. or careering training. i was told the same thing 15 years ago and became a certified nurse's aide. my question now is exactly the same. don't i get to dream? don't i get to have aspirations? don't i get to provide a professional future for my children? fresheners --pose professors that would allow me to get my kids to class. years, myce of seven
daughter saw me every day and it was never an option. she is a teacher now. what thisr question means and why it is important, your daughter is seeing through possibility and my morris. i guess is for we talk about eliminating programs like the federal grants,ntal opportunity are those programs directly attacking low income families? in your opinion? one of the things i was told when i could not get a loan or a grant is to have my mother or my family fill out a plus loan or a parent loan. already working three jobs to take care of my family,
my mother did not have the capacity to fill on a loan on my behalf. it perpetuates this idea generational poverty. is the elimination of these programs, in your opinion, a direct attack on loan come families question mark -- families? -- on low income families? >> anything that prevents people from being able to apply for any aid or support at all is an attack on student learning and the ability to progress in their careers. that is why i'm so proud of what north carolina is doing in terms of capping things. capping on fees, making sure we in thet state investment cost of attendance -- a 10 minute -- attending for students, any progress putting barriers toward people plying
for support to be educated a think is attacking student learning. >> thank you. time,e remainder of my you actually figured it out a lot sooner than i did. my children's were a lot older when i decided to go back to community college. was still have to create opportunities for childcare to do different things. what do you think what happened if programsdents like the childcare at -- access and child care that currently exists would be eliminated? why thank you. i me would give us the move forward and progress and like you said, generational barriers placed upon us. if i know there is a safe place for my child, while i am in
class, i would have the bandwidth to focus more on what my studies are. thank you. >> no time. >> thank you. the gentleman from wisconsin. >> we have heard part of the reason for the increase in tuition is there is a lessening of government support for the schools. faq said it was 30%. dramaticallyone up even without that. what do you attribute that to an how is spending more money today anpared to 30 years ago for equivalent degree? where has the cash con? >> the numbers are about 30%
since the great recession of 2007, 40 1%. there are, across sectors, many different region -- reasons. i'm issue the competition with private sector salaries. in order to hire a highly professor, have to mentionone thing often is so-called wasteful spending and universities. this is really concentrated only universities that, the harvard, this amenity spending is concentrated among a small set of universities. >> harvard is more wasteful than other universities is what you are telling us? is theess i'm saying
universities that make the new york times for -- or the lazy rivers, educated very small the students in this country and are not at all representative of where most people are being educated. >> ok. a follow-up question. one faculty member of my time,sity felt that over that there had been say over the last 30 or 40 years, a significant increase in not teaching personality universities and that's why the students are being pounded for tuition. -- there has, in there are students not being offered no sir student office -- being offered down that we are not being offered.
students especially first-generation students to graduate. >> ok. question for you. i mean there is a feeling over students sometimes take up more student loans the necessary. i think it is a good idea to rank universities on how other if wesities are doing should allow the universities say into how much loans the students are taking out? professors, sometimes people take out more loans than necessary -- for a lifestyle. favorable, you'd
have to have universities sign up? >> i am in favor of more and of his pozo. >> good. foralk about pell grant's certain demographics. frequently people from middle-class homes, kids from those families may not be getting a lot from their parents . but i have had parents complain about this, but some people in one lifestyle are more likely to get grants the people of another. that grant is unfair? >> i do think that is unfair. it is easy to focus on anecdotes of, this person is getting something that they may be "don't deserve" but i don't think that is representative of the general situation.
it is unfair?k thatll ask the idea using is unfair? >> i think individuals come to the university or college with different backgrounds and different support mechanisms. i am first-generation and i come from a modest background and was grateful for the grants and loans available to me. to paintk it is hard everyone with one brush stroke. it's often an individual's choice. sometimes, the set of circumstances -- favor of justin rumination? -- of discrimination? >> i am not. >> ok.
gentleman's time has expired. >> thank you for being here on an important subject. i would love to start with you. can you share with us once again with the aggregate amount of student debt is now in the united states? >> $1.5 trillion. i know i have not been here that long. it was not long ago since i was in college myself. i was in college, do you recall with the aggregate debt was? >> i don't put it was substantially less than $1 trillion. >> having it was around $500 billion. does that sound about right? in other words, in the last 10 years since i got out of school, the aggregate amount of student debt in the country has tripled in the last 10 years. is that fair? itle we have done that, and is interesting to note we have
been investing in the justice those thatn some of are essential to my understanding is that the pell grant covered, about 76% of the cost of attendance for a four-year school. 76% in 1980, is that around correct? do you know where it is today? >> about one quarter. >> got it. in other words, the amount of student debt has tripled in the last 10 years and over the last 30 years or so, we have gone from 76% of the cost of attendance for a pell grant and has slipped to about a quarter, is that fair? i would love to get the student perspective on this. thank you for being here. it is interesting day today because we are about 24 hours scandal in higher education, where we have seen a renewed sense of inequality in
our higher education system. is your belief that your parents bribed in a school administrators are coaches to get you into the school? >> no. >> are you sure there is no building and a couple million dollars that helped you get in? >> i guarantee there is not. >> i bet there is not in my all my moderate either. what did you were in school? >>'s most recent time, human resource management. >> before you decided to study that, did you have access to reliable data that told you this is what you would make after four years of a program or study? data,i had access to the it is not something i had background knowledge of knowing to do. >> got it. would that have been helpful in making a decision about what to study?
>> yes. >> and would you agree that students today point college do not necessarily have information that they need to enroll in school? >> yes. >> and what is your sense of the fragmentation of our information and the transparency we give to students and parents in making one of the most important financial decisions of their ?ife >> woefully inadequate. >> why do you think that? >> one reason is the department of education is prohibited from on students who do not receive student aid, that 30% of students. we only know what made debt for college's report to a spirit we know how well students succeed after they transfer or are taken to a different program. we have limited insight into how well they do in the workforce. there are a lot of critical questions that just cannot be answered by a student deciding where to enroll right now.
communityto teach college and taught business 101 and taught a company at a community college in my committee. what about community college students? what access to information to you have doing a two-year degree? >> it varies by state. again, it is hard to know whether a two-year college graduate will go on to earn a four year degree or how likely that is. to labor market data for those earning out traditional degrees is hard to come from. very rare at a program level, ,hich is really what you want and again it is aggregated by student characteristics. is there any federal standard that standardizes what information students have or even a set of standards to know what other college graduation anys -- is there
standardization in that? you were making love the most important financial and lifelong you are making some of the most important financial and lifelong decisions. do you have a sense of where you're getting the most bank for buck?ck -- bang for the the success of many students, like ms. parker, would not be captured in those statistics. we have two problems. one is the cost of education which is skyrocketing while we are just investing in higher education and i am actually sponsoring a bill to make sure .e standardize some of these thank you so much and i yield back my time. .> thank you the gentleman from pennsylvania. >> thank you chairman scott and for holding a hearing.
thank you to all of our witnesses very much for sharing your expertise. the cost ofheard, higher education is well over the inflation rate by three points. it's almost an automatic increase every year. and this has been happening for 20 years at least, maybe more. despite the growing number of job openings in our economy, we have a skills gap that must be and yet our costs continue to soar. the average cost of attending a private four-year university is $50,000. so, i will start with the
$50,000 question, if you will -- these 66 dollars , what is6,000 question being done to truly provide a value or return on the besttment, lowering cost, education, appropriate and effective job placement? dr. weber, i will ask you. things i the biggest can say at temple university, that is an initiative trying to keep students on track .o graduate if they take longer than the four years, if they have met
, theyn performance goals won't have to pay for classes they this point as long as are meeting certain benchmarks. in terms of job placement, i think the best place for to investf all types is internship programs. but they invest in a strong internship program. in my college, there has been a toward making partnerships with businesses and local community and really investing. great. i am certainly a fan of temple university and i really hear some great things and i think your applications are a reflection of that. >> i'm a big and as well. another university that does very well is purdue university,
which daniels has done some remarkable things there, with costs, justowering making the school more attractive and definitely delivering on job placement. are other schools following this model? >> there is a college specific income share agreement. it takes university funds. we have seen, they were the first to start a program like that. we have seen other traditional institutions following suits. the university of utah was the
largest university to go that direct in. there's a dramatic expansion of the online program. they have underutilized the potential for technologies. so, i am hoping we will see other schools following suit. right. i just want to focus on , astional skill learning well as filling the jobs gap. you mentioned the importance of career education. resources go toward the technical school and do students receive the same level of student loans for vocational skills?
the program makes sure that , and degree is affordable that means a reduction in tuition. the other things we have done in terms of making sure students leave with less debt, we have tuition up to $3000 savings. the other things we have done, we have a cap on our fees every year so the ease to not keep increasing, as you mentioned, system we have fixed tuition. when people come in to get a degree, whatever kind of degree, they are getting the skills that they need. they can show that they have the
skills they need to be successful. our students are getting jobs based on the experience they are getting. the cost perspective of its in the -- of it in the state of north carolina is decreasing the cost to students so they can get the jobs they need when they graduate and give back to the economy. the gentleman's time has expired. the gentlelady from georgia. >> thank you. before i began asking my questions, i would like to echo of my colleague's comments. first, the need to reduce administrative burdens on colleges. regulation federal that provides protection for our students. this is tequila really important who areincome students
more likely to be burdened by unmanageable debt and to be victims of fraud and abuse by unscrupulous institutions. there are, however, some bipartisan proposals for college. the college transparency act also provides the educational and workforce outcomes which gives to some of the problems about transparency that were raised earlier today. it is true the demographics of post secondary students are more diverse than ever before. more women are attending and graduating from college than men. in georgia, 59% of college students are women. inare seeing an increase
students of color and students with a disability. we have much more to do to address systemic inequalities. they are disproportionately affected by the cost of education, resulting in lower rates of matriculation, retention, and graduation. in georgia and across the country, most americans will need to achieve a post secondary degree to achieve or maintain a middle class income. by 2020, 60 5% of the jobs in my state loan will require some of the jobs in my state alone will require some college education. a college education is the
surest path to economic sustainability in our society, we need to make sure everyone has the resources, especially financial resources, that they need. more than 200 30,000 programs were awarded to students. this brings the total to the to $900 million. giorgio is one of many -- george is one of many institutions -- 51% are receiving pell grants.
however, navigating the financial burdens is not the only obstacle that they face. they shift to an environment not looky people will like them. they come from the same background or belong to the same class.economic when we talk about highridge education we need to keep those challenges in mind. we speak of mental health in , but what about when students move on to post secondary education. what happens to those students who receive free or a reduced lunch? it's one thing to get students to college. it's another to get them through college. i hope we will consider the funding needed to help the students navigate the college experience. a sensible, affordable college
education is crucial to the advancement of our society and for the well-being -- well-being of people we are here to represent. greater returns in our society unless we are willing to invest more in the students in our country. more diverse than ever before and i am thrilled to see so many first-generation college students like ms. parker blazing the trail as first to attend college. said,rker, as you balancing multiple priorities can be stressful. we know mental health supports are critical. can you please talk about anything that has helped manage your stress level. and what do you think we can do to address mental health on
college campuses. >> thank you. statended columbia university and mental health is not something that is addressed regularly. the first session, i did not realize i was there. all of these things we have been going through, how that was heard in some to me. on college campuses, it was a normal conversation, instead of things to my and not just meant -- i'meer services
sorry, counseling services. i think that is something that should be talked about in advising. because no matter who the student was talking to, they see them as an advisor. there's an instructor. there is still a way to connect with the students. they know it is someone that they can lean into. >> thank you. >> thank you, mr. chairman. i want to raise a topic i have not heard much about. idaho, thereate of have been a couple things that have worked in a positive way to drive down the overall impact of
cost. one is just competition. we have a community college that was put in place to close proximity to our largest university, and since it was put in place, the student growth has , and thethere prevailing increase rate of the four-year university greatly slowed down. the second thing was the implementation of a dual credit system. i was selfishly, i was a proponent of that at the state taken and it has really off. i would like to maybe ask ms. parker. just because you have a compelling story and the demographic that you grew up in is just different than the typical demographic in my home
state. so, first of all, just a question for you -- if you would have had or maybe you did have an opportunity to receive college credit in high school -- would that have been something you would have pursued in your circumstance? i believe in my high school, senior year was when columbia state partnered with my high school to offer college credit. , and i wasenior year already afraid of college. going back, knowing what i know now, yes, i would have, but i did not take advantage of it at that time. mind you, i am a first-generation student of. >> i understand. this could be for anyone, that i will ask dr. weber. ,ave you seen any other states
track records where the dual credit system was advantageous or helpful in driving down the overall cost of college? >> yes, i think so. my home state of florida has a robust dual credit system that i think, 12tage of, i or 15 credits from my local community college. the general cost of college in florida is the lowest in the country. there are other reasons for that as well, but i think part of the effect is a robust dual credit system. >> will the gentleman yield? >> i yield my time. >> i want to ask you a question. you hit on an issue i wanted to bring up eventually, and i'm really pleased, and while you were here, i wanted to say it. there's an article that came out that were 10th that says that --
february 10 that says the student who takes at least one dual credit course in high school is three times as likely to graduate from college as students who don't take college credit courses in high school. had ao, the study also higher first, second, and third year gpa's. i want to compliment the gentleman i'm just us the issue because it is something that is moving to be very, very successful. thank you for bringing up the issue. i will yield my time back. >> thank you, dr. fox. i think the data in our home state would validate that. i yield to the chairman. back. gentleman yielded
the gentleman's time has expired. the gentlelady from washington. >> thank you, mr. chairman. withlly reiterate, i agree my colleagues. this reduces the cost of college. it is not as available to all in rural areas, but it is a great start. we have heard about college tuition rates. the for perspective, but in 1980's, when i went to college, i took a couple classes at community college for five dollars a credit. yes. and i went to uc berkeley for $2000 a year, and i graduated from medical school was -- with about $60,000 of debt, which pales in comparison with face.ng students today
, and iout with an m.d. have often said that the way we spend our money is a reflection of our values. we have just heard how college education leads to a million dollars more in lifetime earnings, a much bigger tax base, and ultimately will pay itself off, and i have always felt an investment in a home and in education are the only two kinds-- only two good go of debt. you mentioned doubling the amount we give in pell grants. we have an 80% graduation rate for students receiving pell grants. why not just go for it immediately, given what a good investment of college education
is and the increase in tax revenues for our country? >> great. i am for it. for themselves in terms of increased economic growth, so it would be a very worthwhile investment for congress to make. >> thank you. i would just note and i will yield back, the cost of college costs of college today are so different for someone like me who comes from a middle-class households and did not have huge expenses and someone like ms. parker, who grew up with adversity. the system is so rigged. as we saw yesterday with the wealthy parents paying their way for their kids to get into college who will have a cakewalk and would have had a cake walk it away, and ms. parker west to work and raise a child and get through college -- i don't think i could have made it through berkeley doing what you are
doing. i just want to recognize the ,ost of college is overwhelming and i applaud you for your efforts. i yield back my time. >> let me ask one question. tore has been a reference the private income-based repayment plan where you make a deal with a private investor to .et a percentage of your income how did those work and why would anyone prefer that to the federal income-based repayment we already have? >> i think there is very little reason for any student to prefer a private income share agreement to a federal student loan, because of the option of income
driven repayment, which will be a better option for almost every student. the federal government has less capital and offer better rates than private lenders will. with the public income-based repair and, you can decide if you have a real good job to pay off the loan and be finished with it. do you have the option with the private deals? >> not necessarily. oftentimes you have to pay back several times more than the apparent value of tuition. >> thank you. i yield back. >> the gentlelady yields back the balance of her time. i have a letter from the nea i would respectfully submit and i will yield back to whoever would like my time.
>> without objection. the gentleman from south dakota. you, mr. chairman. mr. parker, in your testimony, .his is a neat story low and ihe odds are want to echo those who say you are going to make it. you were going to make it and i know that. this is what president coolidge said. nothing in this world can take the place of persistence. talent will not. nothing is more common than unsuccessful men with talent. genius will not. on were rewarded genius is almost a proverb. education alone will not. the world is full of education
-- educated their relics. ms. parker, boy, do you have persistence. you are going to make it an journey is going to make it. miles to go,are but boy, are you going to make it. i have three boys. one is 13. tohave not really started think about what will happen after high school yet, but i would love to get you guys connected. he is not here today, but if he was and he says, ms. parker, what advice do you have for me, what i can be doing to have successful experience, whether that is related to affordability are other measures of student success, what would you tell him? >> get connected to as many resources as you can because that is my experience. i don't know how to do it without it. i don't know any other way.
just be mindful, just because not theay what it is is way it is. >> you need to be your own advocate. the system is too complicated, but there are times you have had to be your own advocate, i assume? >> yes. for years. there shouldze now have been a stepping point all those years where i could have been helped in guided. >> we talked about theirs -- ofre is a lack of -- a lack transparency. we're kind of dealing with
monopoly money. it is hard to really understand the financial impact. is there a moment's, is there a moment when you realized, oh, my gosh, this is real money and i owe it? says but i understood that when i was 17 going to the university of toledo. to be taught to survive. that was real. when i arrived and i see my peers and everyone setting up the rooms, i did not think they came from money. i knew that they had money because they had a comforter on their bed. i did not know what that meant until i saw an extensive amount. >> you talked in your testimony about how hard you worked and how many are time jobs, more
than a few of them, and we heard from other panelists how that could have a negative impact on student success. employment is a key part of your success story now. >> yes. it is also given me experience. although i was working all of these jobs, i am able to apply that experience and what is relevant to me now in my career. >> this is well said. i do think we mean to have a robust conversation. example ofreat someone who has done all you canned -- all you can on your end. hard work, being persistent. there are a lot of things to bets need to own
successful, and you're owning them. >> mr. chairman, to be fair, there is not enough time to answer the questions. florida.ntlelady from >> thank you, mr. chairman. i would like to introduce into -- to the, a letter panel, i think you have done an excellent job, but tuition is more complicated than the sticker price. so many colleges and universities in this country ofcount tuition in a variety ways. sometimes it's a scholarship, sometimes offering a lower price. it's hard to analyze whether to alone is a fact. it seems that one of the things
we have learned is there are these wraparound services that made a real difference for ms. parker. access to housing, access to services. can you talk about what the and how anion is analyst treats that? >> you bring up a very good point. there's the sticker price of tuition, but what is says on the sayite, and i do want to this matters. it does deter people who just see the prospect of this, these really big numbers and they are very reluctant to take out so .uch debt
and then there is what students actually pay. one of the problems is what they actually pay is different from year to year. it's not clear what they will get from one year to the next. the financial aid packages, there is so much fine print. it expires after for years or it expires if you lose it. it's incredibly complex. and this is a real burden to students. >> thank you very much. , we found that for-profitograms for similar to there not-for-profit four-year college. thatyou looked at
differential, in looking at the cost of college? >> yes, for-profit colleges tend .o have higher percentages >> what about the retention and graduation rates? haver-profit's seem to shorter programs. can you talk a little bit about the wraparound services? you talked about the low tuition. you have a large number that work and go to school. what services do you provide to soup or students -- to support students? >> educational support, obviously, things like advising,
to achieve skills that they need to be successful in their degree. the total cost of attendance is $14,000. and healthd board services that need to be in place that have an additional cost. thank you very much. ms. parker, and think you will do well in the future. i know a lot of hr people. i would be happy to provide some introductions to you guys i want to make sure you do not end up living in poverty the rest of your life. thank you. i yield back my time. >> the gentleman from virginia. >> thank you.
the cost of education has run factors include administrative costs. college can never truly be free. costs are simply masked. that being said, students should ane an ability to attend institution that prepares them to be members of society. the problem is twofold. we should not reach a point at which the cost of education is entirely prohibitive, but recognize that just as accessibility is important, so our graduation rate. you state that only 60% of students will earn a degree within six years of enrollment, with more and more resources
being devoted to administrative costs. why are we not seeing higher rates of graduation? >> one of the issues is doing an apples to apples comparison. over time, graduation rates have stated roughly constant, but that is despite public a muchtions educating different type of student today than 304050 years ago. in some sense, graduation rates have increased because they have stayed the same, if that makes sense. >> thank you.
i'm very interested in in see promise. it sounds exciting. how long have you been interim chat -- chancellor? >> just one year. >> are you familiar with your budgets over the last decade? >> to a certain extent, yes. >> can you tell me how much they have increased? >> that i asked that question. -- can i ask that question? stayedally, we have .elatively the same we have capital expenditures or
the ability to invest in our we are calendar -- beginning to see folks look at to attendf attendance to a growing population. >> that is not the answer i .xpected given that you have seen such a spike in enrollment, can you speak to other ways in which you as a higher education institution have managed to ?ontrol costs on your own seey district, they theiruing pressure on
costs. i was curious whether or not you to control it a goal costs. can you speak to this? having our students stay on is reducing their costs. system of the things the is doing is capped fees, so we 3%.-- we cannot go above so, what we have to do is looking at reallocating to make sure we are focusing. , prior to myears time coming to western carolina, -- are these the
right programs for our region? do, ther things that we reallocation of resources is the key to this. the money,t have what are your priorities? both the money. -- follow the money. we have a plan that focuses on success, and we make sure our resources follow those metrics. so, reallocation. >> thank you very much. thank you, mr. chairman. i yield back. >> thank you. the gentleman from michigan. >> thank you, mr. chairman.
who can pursue careers in public service, even if they take out loans to obtain a degree. i think we worked together in met in previous lives. it's good to see you. do for theould it sectorty of the public workforce? >> we know that low income students and students of color are more likely to borrow and it would make those career choices more challenging for them. >> how hard would it make it to pursue those careers in public service? >> we know that student debt is an obstacle and students with higher debt are less likely to paying careers
including service careers. believe thers population of homeless students in higher education is close to 1.5 million. furthermore, a recent gao report examining hunger found that low income students, first-generation students, and single parents are at a higher food insecure. ms. parker, i was so moved by housingry of finding for you and journey. can you tell us what a difference the stable housing has made for you and expand on how you're able to find stable housing? >> thank you. we had special circumstances
advising at columbia state and they directed me in the direction of scholar house. >> what is scholar house? who lives there? >> they provide programming for us. >> we have things for mentoring, coaching, programming offered to us that is a requirement. the community properties of ohio. so, a cooperative program, different agencies working together to get housing? >> exactly. part of the president budget
was released this week. republicans have proposed eliminating subsidized loans. how would a limiting subsidized undergraduates affect students? proposalesident's would raise costs by thousands of dollars for many students over the life of their loans and would not make college more affordable. finally, there were some proposals from the minority changing debt loads. do you believe that debt loads are the result of frivolous or
unnecessary spending? >> i absolutely believe they are the latter. there are limited circumstances where some students, maybe lack of financial counseling to borrow too much. i think schools should -- >> more advising or counseling rather than limiting the amount that they can borrow with a need at? >> exactly. >> the gentleman from maryland. >> thank you for being here. parker, i commend you for your phenomenal hard work. you will absolutely be successful and you will knock it out of the park. keep at it. we have been looking at higher education in an education system that really has not changed much in 50 years.
everything else is changed. our students have changed. their interests of changed -- have changed. where they would go to graduate school, that has all changed. tech jobs have changed. the way we communicate knowledge is changed. -- is thistem just doinging that we keep because it is there? and who and what state has done a best practice in this area that we could learn from and ?mulate
>> i think the comment about free is always difficult to determine. one of the things in see promise does that is little difference is the first dollar. students come and they know what their tuition is going to be. they know what their other costs are going to be and they can apply other loans and grants to that. making the process more transparent, making a process that is more accessible, especially for low income or first generations units is really, really important, making sure our education is helping our students get the right kind of jobs. at western carolina university, we have that sense in the university. what skills are needed? what would help our economy? and a nimble enough university to say we need to be focusing on and growing those particular things.
really knowing what your circumstances are. we are in rural western north carolina. we know what the needs of our community are and as an institution we meet those needs and we exceed those needs could possibly can, but we have to be nimble to do that. >> there is an interesting experiment happening in detroit's with the kresge k-12ation about mining schools. "free"any states have a first dollar, last dollar two-year beauty college -- is anyone -- community college? does anyone have a dollar on that? >> i don't think that there is any state that is entirely free. >> tennessee? no? tennessee is largely covered with pell grants. they have a last dollar
scholarship. >> the workforce permit. innovation, providing multiple pathways for students to learn and achieve success in the workplace. at the end of the day, that is what they are looking for, success in the workplace and a job. programs do not prepare people adequately. what kind of safeguards do we need for spending federal financial aid dollars to pursue workforce programs? pursuedents able to their financial aid for these workforce programs? >> in many cases, students are degrees that have direct occupational level. to get a pell grant, you need to be attending a program that is at least the length of her traditional academic semester, which is 15 weeks.
there are some proposals to allow shorter-term programs. they may not necessarily be offered for academics. is, those programs are worthier support -- worthy of support, that we need to be careful to think about the .rograms that could be created >> thank you. >> thank you. member,rolina's ranking dr. fox. congratulations on continuing your education. poor growingery up. i worked my way through college. it took me seven years and i had a family, and i want to
encourage you, as other people have, to continue to do what you do because getting your degree, i hope will be worthwhile for you. it has certainly been for me. so, i commend you for continuing to do what you are doing. i want to go back to the issue of the public service loan programs.s in your testimony, you mentioned that it is estimated it will cost one $4 billion over the next 10 years. can you give us examples of how andpslf is inequitable poorly designed? >> sure. , but ino objection believe the student lending program is the wrong place to provide those subsidies.
there's an obvious example of where there is an inequity, you can imagine to nurses in a nonprofit system. one went to college and have the experience ms. parker talked about. on the other scrimped and saved to have the low-cost experience. the individual who had a high amount of debt will have their loans forgiven, essentially receiving a large subsidy of taxpayer dollars, will the person who was more careful with their spending does not receive the subsidy. i would prefer that we choose to support professions, that subsidies be delivered through something like attacks credit that motivates all individuals, rather than just those who have spent large sums on their education. >> thank you for that example. of course, what ms. parker said, her idea before she went to college was that it was a vacation. and i think many people see that
the taxpayers are subsidizing those kinds of students who were going to college to be on vacation and not having the seriousness that other students have, and i think your example is an excellent one. thank you for coming to washington to testify about the wonderful things going on at western carolina and other places in north carolina. i think talking about the carolina promise, talking about the programs you all have where students can transfer from community college, make sure credits transfer. i happen to think that north carolina is doing a lot of good things in that regard. in highenrollment school that costs absolutely nothing. and that is, by the way, correct all through the state. i know you were a little unsure
about how to answer that question before, but it has been going on a long time before i was involved and before ms. adams and i were both in the general assembly. it is been going on a long time and it has been very successful. improving the economic viability of your students is an important value and you alluded to that. can you share what you're doing on campus to work with businesses and industry to make the transition from college graduate to employees in less for your students. we have a very robust career professional development service to fund allowed us industries so they are eligible for getting the experiences that ms. parker talked about, as she did in her work experience.
these are really important connections to be made and we live in an area where these indices are very supportive of our student success and a high endentage of our students up being employed by these businesses and industries, and as i mentioned, stayed in the area and contributed back to the economy. >> thank you. dr. weber, thank you for being here today. again, ms. parker, thank you for coming and sharing your experience. thank you, mr. chairman. i yield back. >> thank you. the gentlelady from nevada, ms. lee. chairman.ou, mr. i want to thank all of you for being here today. as one of eight children, i was able to put myself through
college with a smorgasbord of help. it was significantly importance to me, but we are finding, more and more, the students are not having that fact,pportunity, and in research from the brookings by 2023, shows that 20% of borrowers may default on their loans. this is a student income crisis, particularly for low income students, particularly who attend for-profit colleges. the student default rate at for-profit schools is almost those who that of attend community colleges. we know that black students are more likely to enroll in for-profit colleges and students in the bottom quartile are twice
as likely to enroll in for-profit colleges than the students at the top. given these statistics, can you explain why students who attend for-profit institutions are at greater risk of default? colleges tend to be more expensive. they tend to be priced at the level that were require a federal student loan at the maximum level and they often offer mediocre education or as a result, we do see a lot of students to halting or failing to make payments on their student loans. >> thank you. you said earlier that students who qualify for these for-profit colleges actually made to worse in the labor market than they otherwise would do, even if they did not go to school.
30%credentials tend to be to 40% more expensive. abc interviewed a young veteran, brian babcock,- a couple years ago. his plan was police work when he graduated. pursue a criminal justice degree at itt tech, which we all know what happened with that. he heard of them on a commercial. all agenciesthat would accept his credential. he borrowed up to 75 -- $70,000. he went on to apply to 23 we just discovered today, and this is particularly important point in nevada, we have a lot of for-profit universities that have shut their doors, 30 in the
last 10 years. we just discovered today that 1733 g.i. bill recipients were affected by the most recent closures of the dream education schools, of which one is in my district alone. can you explain more specifically, speak to why minority students and veterans tend to be the target of these predatory recruitment practices by for-profits? >> i think in many cases, students don't have experience with college, they have family members who don't have experience with college. we know that for-profit colleges engage in very high- pressure, sometimes deceptive recruiting tactics. in 2010, that gao is an undercover investigator all 15 found misleading statements, four of them found fraudulent statements. veterans are particularly attractive to for-profit
colleges because they generate revenue outside of what is called the 90/10 rule. imits the income. and so for all of those reasons you see, the practices of for- profit colleges are falling disproportionately heavy on show what you mentioned. >> any quick suggestions for what the federal government can do to these students? >> it's really important to have standards to ensure students can graduate, find jobs and pay back their loans. it's important to crackdown on the commission salespeople which leads to a lot of deceptive information. i would certainly include g.i. benefits, and the limitation on the amount of federal funds. i think that students who are defrauded should have the right to have their loans forgiven which is true in theory but not in practice. >> thank you very much.
>> the gentlelady from massachusetts. >> thank you mr. chairman, and thank you for having this hearing, it's so important to all of us. i was born and raised in a working-class family, i was one of four girls. and i attended public school my entire life. if it was not for a volleyball scholarship, i would not have gone to the college i've gone to. i'm so uniquely aware of the anxiety that goes around in funding your own education. school tuition had a high sticker price then, but i think what's more alarming to me is in the last 25 years i have seen that sticker price increase 3x in 25 years. i looked at the student debt report that was put out last september, and more than 200,000
colleges granting bachelor degrees carried an average debt of more than $35,000. today we heard ms. parker's testimony, and your $66,000 debt. i just want to ask a couple of basic questions on this. i think it's helpful for us to know what that mean drivers are for this tuition increase. of students gors to public institutions. the single biggest driver has been declining state support over the last few decades. >> that's fair, i've got three stepsons, i've toured lots of college campuses in the last 10 years. i've also seen a bit of amenities arms raised. whether it is the dorms, cafeterias, the gyms. education, ory of
the job readiness, not just the student experience, has it risen as a result of these tuition hikes? >> in part, colleges do have a challenge, because they employ highly educated workforces. it's difficult to become more productive like other parts of the economy, because you can't have more than 20 students in a seminar without the seminar getting worse. i think many colleges are also chasing prestige, which is measured by the amount the institution spends, not how much the student learns. we don't value community colleges that are inclusive and affordable and higher in quality. >> right, that's helpful. i think you are the only one in your testimony that use the word accountability. what accountability measures should we employ to make sure that our young people frankly get the return on their huge
investment? >> the most basic question is can students replaying report pay their loans? it's been widely accepted, but is no longer very effective at driving down defaults. i think there are other things that are worthy in other areas, for example, the gainful employment rules applied occupational programs, often in for-profit colleges, and look at typical debts relative to expected earnings. >> thank you. so we heard from ms. parker, that far too many students and their children, like journey, are going hungry while you are nobly trying to learn and get ahead. the help they need is not reaching them. the gao recently found that of
the 3.3 million students, i think this was referenced earlier, who were potentially eligible for snap, less than half say they participate. so i'm wondering if you can help with your experience, is student hunger an issue you see at western carolina, and if so, what are your recommendations for helping students? >> hunger is definitely something we are seeing, at all of our institutions. it is a big issue. and it's something that we across the system are really conscious of. making sure that students get to the resources they need, to be able to be successful. we've collaborated with a baptist children's home to create a food bank and resources for our students who are homeless, and who have issues. they are referred to sometimes
by faculty and staff. we've really got to get the information out to people, the resources that we have available to them. and i think communication is a big issue. got to get that information out, and it has to be done in a way that is compassionate and respectful for the person being affected. because that is one area where if people don't feel like they are being valued or respected, they will just leave, so . thank you all so much for being here today. >> thank you for holding these important hearings, thank you to the panel for being here. this has been an issue who is that's been important to me for years. and if i'm not mistaken mr. kroll, when you were with the obama administrator, i believe we worked with you, so thank you for your help back then.
and we have one of the best community colleges systems in the country. we did in seattle at a 13th year to a sort of k-12 continuum. we are excited to see how that goes. in washington state, just to echo some of the comments of my colleague that just spoke, we went from the state covering 66% of the cost of college in 2008 to now covering only 35%. and we are in a very unaffordable, let's put it that way, area, in terms of our living cost. so the challenges for students are tremendous, and i want to congratulate you ms. parker, and all of the students across our country to go through such challenges. let me start with you chancellor, and thank you so much for your work on the north carolina promise program. i wanted to ask if you can zero in a little bit on what you have
found around college accessibility and income diversity of your students, in particular. any specific reflections on show that connection? >> the nc system are put forward as a result of affordability and access across the system. then also including nc promise, really focusing on taking sure that low income and first-generation students have access to high-quality, affordable degree. and as a result, the nc promise system, through institutions, will allow students less than travel will make sure you get to college, which is really important. so people coming to western, are people who want to have a high quality education, but wouldn't normally be able to afford it.
the nc promise has allowed them to do that. so we are seeing increases in retention and time to graduation. even though we've only been at this for a short period of time. but we are seeing particular student retention. they are not having the financial impact that they would have otherwise. >> that's perfect, because my next question, sometimes we separate cost and affordability from completion. in my experience and the students i have spoken to, there is a very direct connection. if you don't have the aide, if you have to go out and have a second or third job, if you can 't afford your textbooks or a computer now, it really affects your ability to complete. so can you speak to that, i know it's early, but can you speak to that relationship, because they are so often separated. what comments do you have around
that? >> nc promise is a first dollar program, so they will know exactly what it's going to cost for tuition and fees, so that knowledge allows planning, it allows seeking other resources to complete the cost of attendance. and that is something i love to see as having a simpler, more transparent process. something that first-generation or low income students can have access to and become successful. that would be a huge game changer for the students you are talking about. >> i just want to say, i have actually championed a proposal to invest in a federal state partnership to make four-year and two-year tuition free for everybody, and the government will cover two thirds of the cost of eliminating tuition and fees. the states would cover one third.
i believe that's actually a very important cornerstone of higher education reauthorization. >> i was going to say that i think you hit the nail right on the head in respect to affordability and completion. on average, a college degree pays off in spades, and this is true for the vast majority of people. risk is really the important thing here. that downside risk. the people who are in the single worst condition are those who do not complete. >> just to add, we have this idea of college students being this temperamental class, and the reality of their lives today are really very different. we need to think about supporting children, other family members, emergency expenses, there's a whole range of costs that get in the way of completion that we don't deal with. >> thank you so much.
mr. kroll you mention the problems with the loan forgiveness, that it's good and in theory but is problematic in reality. >> i think it would help to simplify the types of repayment plans that are eligible for public service loan forgiveness. the types of employment is unclear, could be clarified by that department, and also by the congress. >> you're saying somebody could be working year after year thinking they are on the plan but after the 10 years you don't get any credit? >> that's not only hypothetical, that has happened. >> is that legislative or administrative? cases, the department has given inaccurate information to students. but i think there is an
opportunity for congress to fix it. >> are you talking about a problem with servicers? >> you mention the cost of for- profit colleges is a higher than community college for the same program. how much higher? >> is many times higher. >> many times? >> three or four or five times is a fair estimate. >> you talked about north carolina promise, and you also mentioned that significant improvement in graduation rate in several colleges, how much did the financial assistance contribute to the increased graduation rate? >> we are early on in the nc , our six-year graduation rate has gone from a 50% to 60%.
will see an we increase in graduation rates. it is too early at this point to say. >> is there a limit on how many students can participate? any of the students that are enrolled at the city institutions. >> so if you can get into the institution, you can get the rate? >> correct. >> you don't have to have a minimum grade point average? bywe have the standards set the institutions for entry. as the student attains those or exceeds those, then they have the possibility of coming to those institutions. >> has this benefited those colleges and had an adverse effect on others? no, we have the data to show, in fact those institutions that said they've seen a decrease as a result of nc promise, we are seeing 6.6% increase.
particularly with transfer students, they are coming from the same places that were transferring from before. >> thank you. >> ms. parker, you mentioned the assistance you got from counselors, how important was their advice in making it possible for you to stay and complete your degree? >> extremely important sir. the advice were skills on how to deal with anxiety when dealing with things like finances, worrying about childcare, just coping mechanisms to stay focused. do not have these counselors were paid for? it has been very helpful connecting you with scholarships
and resources. time i willof the submit other questions for the record. in light of the time, i will abbreviate my comments. will submit to dr. weber a mpletion he made about te that i would like to have some clarification on. havingto commend you for this year and appreciate the opportunity to collaborate with you on it. there is a void in our focus. that is the issue of the responsibility of the institutions in the states. we see the issue is completion. i'm looking forward to some of the other hearings that will help us focus more on why so few students are completing and why so many students are not seeking
the educational program that suits their interest. what is the responsibility of the institution, student, and state? i am flabbergasted by what we heard from ms. parker about the lack of concern by the university of toledo for her. that points out lots of problems at the state level. i want to believe that no student going to an institution in north carolina would have faced that total lack of concern. we have had a lot of hearings on post secondary education. as time goes on, statistics add up. it is becoming clear none of the issues stand alone. you and i share a love for methodical process. a topical approach makes sense to many. each topic leads directly to another. that is why this committee must focus on the following .ouchstones
modernizing federal student aid, voting student opportunities, you haven't even touched on some of the newer elements that are considered within the context of post secondary education. the other day i read about how population challenges are beginning to impact small, -- colleges.policy there will be for hundred 50,000 450,000 students entering it. without the tuition revenue supported by the students, colleges will need to figure out the way to adapt. it is imperative for the workforce that the system supports students in completing an affordable postsecondary education of some kind. mr. chairman, you and i share a assion for seeing skills play bigger role. we cannot forget about small
institutions and the role of the liberal arts. students must have options. i look forward to continuing these conversations with you at our next hearing. want tof the things we make sure we don't leave out is access to liberal arts education. many people want to have a formula where you can monetize your education the day after you get your degree. that is not often possible with a liberal arts degree. the long-term benefits in terms of transformation of the student i think is extremely important. >> as an english major, you know i agree. >> those who qualify to make that choice, we don't want to limit the choice for those who can pay the big tuition checks. the quality education is out of reach for too many of our students. we have heard of disinvestment from public higher education. how the weakening
federal grant programs and services have made it difficult for students to access higher education. obligationhave an particularly with the state disinvestment. going from the pell grant covering about 75 percent and going to about 25%, that triples the cost to the student. the inflation has made the portion they pay more expensive. obviously we have to do something. today's hearing was extremely important and informative. i want to thank our witnesses for being with us today. without objection, the committee hearing is adjourned. [captions copyright national cable satellite corp. 2018] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]