[House Hearing, 113 Congress]
[From the U.S. Government Printing Office]



 
   KEEPING COLLEGE WITHIN REACH: IMPROVING HIGHER EDUCATION THROUGH 
                               INNOVATION 

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

                                HEARING

                               before the

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

              HEARING HELD IN WASHINGTON, DC, JULY 9, 2013

                               __________

                           Serial No. 113-26

                               __________

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

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                COMMITTEE ON EDUCATION AND THE WORKFORCE

                    JOHN KLINE, Minnesota, Chairman

Thomas E. Petri, Wisconsin           George Miller, California,
Howard P. ``Buck'' McKeon,             Senior Democratic Member
    California                       Robert E. Andrews, New Jersey
Joe Wilson, South Carolina           Robert C. ``Bobby'' Scott, 
Virginia Foxx, North Carolina            Virginia
Tom Price, Georgia                   Ruben Hinojosa, Texas
Kenny Marchant, Texas                Carolyn McCarthy, New York
Duncan Hunter, California            John F. Tierney, Massachusetts
David P. Roe, Tennessee              Rush Holt, New Jersey
Glenn Thompson, Pennsylvania         Susan A. Davis, California
Tim Walberg, Michigan                Raul M. Grijalva, Arizona
Matt Salmon, Arizona                 Timothy H. Bishop, New York
Brett Guthrie, Kentucky              David Loebsack, Iowa
Scott DesJarlais, Tennessee          Joe Courtney, Connecticut
Todd Rokita, Indiana                 Marcia L. Fudge, Ohio
Larry Bucshon, Indiana               Jared Polis, Colorado
Trey Gowdy, South Carolina           Gregorio Kilili Camacho Sablan,
Lou Barletta, Pennsylvania             Northern Mariana Islands
Martha Roby, Alabama                 John A. Yarmuth, Kentucky
Joseph J. Heck, Nevada               Frederica S. Wilson, Florida
Susan W. Brooks, Indiana             Suzanne Bonamici, Oregon
Richard Hudson, North Carolina
Luke Messer, Indiana

                    Juliane Sullivan, Staff Director
                 Jody Calemine, Minority Staff Director



                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on July 9, 2013.....................................     1

Statement of Members:
    Kline, Hon. John, Chairman, Committee on Education and the 
      Workforce..................................................     1
        Prepared statement of....................................     3
    Miller, Hon. George, senior Democratic member, Committee on 
      Education and the Workforce................................     4
        Prepared statement of....................................     6

Statement of Witnesses:
    Boughman, Dr. Joann, senior vice chancellor for academic 
      affairs, University System of Maryland.....................    21
        Prepared statement of....................................    23
    Jenkins, Alan Scott, director of external relations, Western 
      Governors University.......................................     8
        Prepared statement of....................................     9
    Smith, Burck, CEO and founder, StraighterLine, Inc...........    26
        Prepared statement of....................................    29
    Tate, Dr. Pamela J., president and chief executive officer, 
      Council for Adult and Experiential Learning (CAEL).........    12
        Prepared statement of....................................    14

Additional Submissions:
    Mr. Jenkins, response to questions submitted for the record..    66
    Questions submitted for the record by:
        Foxx, Hon. Virginia, a Representative in Congress from 
          the State of North Carolina............................    65
        Chairman Kline...........................................    64
        Polis, Hon. Jared, a Representative in Congress from the 
          State of Colorado......................................    65
    Dr. Tate:....................................................
        ``Underserved Students Who Earn Credit Through Prior 
          Learning Assessment (PLA) Have Higher Degree Completion 
          Rates and Shorter Time-to-Degree,'' research brief, 
          April 2011, Internet address to........................    21
        ``Fueling the Race to Postsecondary Success: A 48-
          Institution Study of Prior Learning Assessment and 
          Adult Student Outcomes,'' executive summary, February 
          2010, Internet address to..............................    21
        ``State Policy Approaches to Support Prior Learning 
          Assessment,'' a resource guide for state leaders, 2012, 
          Internet address to....................................    21


                     KEEPING COLLEGE WITHIN REACH:
                       IMPROVING HIGHER EDUCATION
                           THROUGH INNOVATION

                              ----------                              


                         Tuesday, July 9, 2013

                     U.S. House of Representatives

                Committee on Education and the Workforce

                             Washington, DC

                              ----------                              

    The committee met, pursuant to call, at 10:04 a.m., in room 
2175, Rayburn House Office Building, Hon. John Kline [chairman 
of the committee] presiding.
    Present: Representatives Kline, Petri, Wilson, Foxx, Roe, 
Thompson, Walberg, Guthrie, DesJarlais, Rokita, Bucshon, Gowdy, 
Roby, Brooks, Hudson, Miller, Andrews, Hinojosa, Tierney, 
Davis, Grijalva, Bishop, Courtney, Polis, Sablan, and Bonamici.
    Staff present: Katherine Bathgate, Deputy Press Secretary; 
James Bergeron, Director of Education and Human Services 
Policy; Casey Buboltz, Coalitions and Member Services 
Coordinator; Heather Couri, Deputy Director of Education and 
Human Services Policy; Amy Raaf Jones, Education Policy Counsel 
and Senior Advisor; Nancy Locke, Chief Clerk; Brian Melnyk, 
Professional Staff Member; Krisann Pearce, General Counsel; 
Nicole Sizemore, Deputy Press Secretary; Emily Slack, 
Legislative Assistant; Alex Sollberger, Communications 
Director; Alissa Strawcutter, Deputy Clerk; Juliane Sullivan, 
Staff Director; Tylease Alli, Minority Clerk/Intern and Fellow 
Coordinator; Kelly Broughan, Minority Education Policy 
Associate; Jody Calemine, Minority Staff Director; Tiffany 
Edwards, Minority Press Secretary for Education; Jamie Fasteau, 
Minority Director of Education Policy; Eunice Ikene, Minority 
Staff Assistant; Rich Williams, Minority Education Policy 
Advisor; Michael Zola, Minority Deputy Staff Director; and Mark 
Zuckerman, Minority Senior Economic Advisor.
    Chairman Kline. A quorum being present, the committee will 
come to order.
    Good morning. Welcome. We have a truly excellent panel of 
witnesses here with us today, and I thank each of them for 
joining us.
    When we consider how higher education is changing, most of 
us probably think about rising tuition. And that is a fair 
connection, after all. In-state tuition and fees at public 4-
year universities have shot up 81 percent in the last decade, 
and similar trends can be seen in private institutions and 2-
year degree programs.
    But tuition increases aren't the only changes affecting our 
nation's higher education system. Student demographics are also 
evolving.
    The number of so-called ``traditional'' students--young 
people who enroll in college full time upon graduating high 
school--is on the decline. According to the National Center for 
Education Statistics, ``nontraditional'' students--those who 
decide to earn a degree later in life, perhaps while working 
full time--are now the fastest-growing segment in postsecondary 
education.
    Together, these two very different trends are sparking 
widespread demand for new and innovative modes of delivering a 
quality postsecondary education at a more affordable price, and 
states, institutions, and private entities are rising to the 
challenge.
    Several states, including Kentucky and Wisconsin, are 
embracing competency-based models of education. These programs 
establish the skills a student needs to succeed in a given 
field of study, provide the student with all the necessary 
materials, and give him or her the opportunity to learn the 
materials with the help of tutors or instructional mentors at 
his or her own pace. Once the student is ready, he or she 
demonstrates competency in the subject through an exam.
    Recognizing the amount of time a student spends in the 
classroom isn't the only way to measure learning, a growing 
number of colleges and universities now offer prior learning 
assessments. These assessments determine whether the knowledge 
a student has obtained through previous education or work 
experience merits college credit, helping students avoid the 
redundancy of taking courses they simply don't need.
    Like competency-based models and prior learning 
assessments, online coursework provides another flexible 
alternative to the traditional college classroom setting--
something that is particularly beneficial to nontraditional 
students who have family or career obligations. Instead of 
forcing students to deal with limited enrollment and high 
tuition, Massive Open Online Courses, or MOOCs, provide 
students the opportunity to take the courses they want, when 
they want, all from the comfort of home.
    According to the Sloan Consortium's annual survey of online 
learning, nearly 7 million students took at least one online 
course during the fall 2011 term, an increase of more than half 
a million students over the previous year. Building on the 
popularity of MOOCs and online coursework, private entities are 
also offering general education classes online at a nominal 
fee, helping students complete prerequisite coursework or 
finish earning a degree faster and more affordably.
    As we continue to prepare for reauthorization of the Higher 
Education Act, we must ensure federal policies support these 
state and local efforts to challenge the status quo and pioneer 
new modes of education delivery. I remain concerned some 
federal regulations advanced as part of the Obama 
administration's package of program integrity mandates could 
stand in the way of the higher education innovation students 
want and so desperately need.
    The heavy-handed Gainful Employment, State Authorization, 
and Credit Hour regulations will almost certainly prevent 
states and institutions from continuing to find new ways to 
offer students a quality education at a lower price. There is 
bipartisan agreement these regulations create unnecessary 
burdens for students and schools and should be repealed. Rest 
assured the committee will continue working toward this goal in 
the coming months.
    Once again, I would like to thank our witnesses for 
participating today. I look forward to gaining their 
perspectives on ways states, institutions, and private entities 
are supporting innovation in our nation's higher education 
system.
    With that, I would like to yield to the senior Democratic 
member of the committee, George Miller, for his opening 
remarks.
    [The statement of Chairman Kline follows:]

            Prepared Statement of Hon. John Kline, Chairman,
                Committee on Education and the Workforce

    Good morning, and welcome. We have an excellent panel of witnesses 
here with us today, and I thank each of them for joining us.
    When we consider how higher education is changing, most of us 
probably think about rising tuition. And that's a fair connection; 
after all, in-state tuition and fees at public four-year universities 
have shot up 81 percent in the last decade, and similar trends can be 
seen at private institutions and two-year degree programs.
    But tuition increases aren't the only changes affecting our 
nation's higher education system. Student demographics are also 
evolving. The number of so-called ``traditional'' students--young 
people who enroll in college full time upon graduating high school--is 
on the decline. According to the National Center for Education 
Statistics, ``non-traditional'' students--those who decide to earn a 
degree later in life, perhaps while working full-time--are now the 
fastest growing segment in postsecondary education.
    Together, these two very different trends are sparking widespread 
demand for new and innovative modes of delivering a quality 
postsecondary education at a more affordable price--and states, 
institutions, and private entities are rising to the challenge.
    Several states, including Kentucky and Wisconsin, are embracing 
competency-based models of education. These programs establish the 
skills a student needs to succeed in a given field of study, provide 
the student with all the necessary materials, and give him or her the 
opportunity to learn the materials with the help of tutors or 
instructional mentors at his or her own pace. Once the student is 
ready, he or she demonstrates competency in the subject manner through 
an exam.
    Recognizing the amount of time a student spends in the classroom 
isn't the only way to measure learning, a growing number of colleges 
and universities now offer prior learning assessments. These 
assessments determine whether the knowledge a student has obtained 
through previous education or work experience merits college credit, 
helping students avoid the redundancy of taking courses they simply 
don't need.
    Like competency-based models and prior learning assessments, online 
coursework provides another flexible alternative to the traditional 
college classroom setting, something that is particularly beneficial to 
non-traditional students who have family or career obligations. Instead 
of forcing students to deal with limited enrollment and high tuition, 
Massive Open Online Courses, or MOOCs, provide students the opportunity 
to take the courses they want, when they want--all from the comfort of 
home.
    According to the Sloan Consortium's annual survey of online 
learning, nearly 7 million students took at least one online course 
during the fall 2011 term, an increase of more than half a million 
students over the previous year. Building on the popularity of MOOCs 
and online coursework, private entities are also offering general 
education classes online at a nominal fee, helping students complete 
prerequisite coursework or finish earning a degree faster and more 
affordably.
    As we continue to prepare for reauthorization of the Higher 
Education Act, we must ensure federal policies support these state and 
local efforts to challenge the status quo and pioneer new modes of 
education delivery. I remain concerned some federal regulations 
advanced as part of the Obama administration's package of ``program 
integrity'' mandates could stand in the way of the higher education 
innovation students want and so desperately need.
    The heavy-handed Gainful Employment, State Authorization, and 
Credit Hour regulations will almost certainly prevent states and 
institutions from continuing to find new ways to offer students a 
quality education at a lower price. There is bipartisan agreement these 
regulations create unnecessary burdens for students and schools, and 
should be repealed. Rest assured the committee will continue working 
toward this goal in the coming months.
    Once again, I'd like to thank our witnesses for participating 
today. I look forward to gaining their perspectives on ways states, 
institutions, and private entities are supporting innovation in our 
nation's higher education system. With that, I'd like to yield to the 
senior Democratic member of the committee, George Miller, for his 
opening remarks.
                                 ______
                                 
    Mr. Miller. Thank you very much, Mr. Chairman.
    Good morning. We meet today to examine ways to improve 
higher education. We will look at innovations from around the 
country developed by states and schools alike to make college 
more accessible, more affordable, and to improve retention and 
completion rates. These discussions will hopefully inform our 
efforts to reauthorize the Higher Education Act so that the 
federal policy can promote and support innovations that benefit 
students.
    But there is an elephant in this room we cannot ignore. 
While we like to start looking at the future, Congress has 
failed students miserably in the past and we need to fix that.
    One week ago interest rates for more than 7.2 million 
students doubled from 3.4 percent to 6.8 percent. This should 
have never happened. With the job market still recovering, 
interest rates at a historic low, student loan debt at a record 
high $1.1 trillion, we should not be asking students with the 
greatest need to be burdened by the highest loan cost--by 
higher loan cost.
    Because Congress has not acted, this rate will increase the 
cost borrowers of an additional $1,000 per student per loan on 
their next loans. These borrowers are students like 28-year-old 
Brandon Anderson.
    Brandon had a difficult upbringing. He dropped out of high 
school and lived on his own because of family issues. He joined 
the Army and completed two tours of Iraq and next May he will 
graduate with a bachelor's degree from Georgetown University.
    Unfortunately, even while getting help from the G.I. Bill 
and significant aid from his school, Brandon is set to graduate 
with nearly $25,000 in student loan debt. And thanks to this 
Congress' inaction, Brandon will pay double the interest on 
next year's student loans.
    Brandon's loan debt has already caused him to forego his 
dream of owning his first home before age 30 and abandon even 
more immediate needs like helping out his younger sister. This 
Congress has not done right by Brandon and millions of other 
students who will graduate with mountains of debt. What the 
Congress has done is far from inexcusable.
    The House passed a Republican bill that featured a bait and 
switch rates that actually made college even more expensive 
than letting the rates double. Democrats offered a proposal 
that would freeze interest rates at 3.4 percent for 2 years 
while Congress considers a long-term, comprehensive solution to 
address rising college costs and affordability during the 
reauthorization of the Higher Education Act, but our proposal 
was not allowed a vote on the House floor and neither was 
President Obama's plan. At every corner, and specifically in 
the Senate and the House Rules Committee, Republicans have 
blocked consideration of any bill that would provide debt 
relief to students, insisting instead that students be taxed 
higher interest rates to pay for the deficit.
    So if we want to improve access and affordability to higher 
education, our immediate job today as members of one 
institution with the power to do so should be to reverse the 
interest rate hike on 7.2 million college students. That is why 
2 weeks ago, after efforts to stop the rate hike had clearly 
stalled, my colleagues and I introduced the Keep Student Loans 
Affordable Act of 2013. It is a 1-year stopgap measure to keep 
rates low while all parties work out their differences on a 
longer-term solution.
    And longer-term comprehensive solutions to rising college 
costs are critically needed. Those solutions will take time and 
effort. Congress, states, and institutions must work together 
to examine cost structures and ensure that we do not price 
students out of a higher education.
    The full reauthorization of HEA should promote 
affordability, retention, and completion. Through cost-saving 
measures like redesigning courses, recognizing prior learning, 
making better use of education technology, institutions can 
keep costs down to provide greater affordability for students.
    For example, the University of Maryland's system integrated 
course redesign to increase class size but continue actively 
engaging students in their studies. Arizona University, Western 
Governors University, Southern New Hampshire University, among 
others, are beginning to look beyond seat time to provide 
competency-based degrees, potentially shortening students' time 
to achieve a degree. And many institutions are going online to 
reach a broader audience and provide low-cost, high-quality 
education to students.
    These are positive steps and I look forward to hearing from 
our witnesses today about how they are utilizing technology and 
other innovations on campus to reduce college cost for 
students.
    In the meantime, we can make a difference right now by 
acting to keep rates low for at least another year. I joined 28 
other members of this committee on our side, formerly--excuse 
me--on June 28th--I am sorry--otherwise we have a majority, I 
think. Stopped your heart, didn't it? [Laughter.]
    I joined other members on June 28th to formally ask for a 
special meeting of the committee to mark up the Keep Student 
Loan Affordable Act but received no response. We can schedule 
that markup right now if a majority of this committee signs the 
special meeting notice.
    On our side all of the members have signed this notice and 
we only need three members from the other side of the aisle to 
sign this document and we can move legislation to reverse that 
rate hike. The petition is over here on display.
    Students need interest rate relief now. Congress needs to 
act today to reverse this increase. We cannot let the American 
dream become a dream permanently deferred for millions of 
college graduates drowning in debt.
    We counted on people like Brandon Anderson in Iraq and now 
they are counting on us. Let's get this done.
    I yield back my time.
    [The statement of Mr. Miller follows:]

  Prepared Statement of Hon. George Miller, Senior Democratic Member, 
                Committee on Education and the Workforce

    Good morning, Chairman Kline. We meet today to examine ways to 
improve higher education.
    We will look at innovations from around the country, developed by 
states and schools alike, to make college more accessible and more 
affordable and to improve retention and completion rates. These 
discussions will hopefully inform our efforts to reauthorize the Higher 
Education Act--so that federal policy can promote and support 
innovations that benefit students.
    But there's an elephant in this room that we cannot ignore. While 
we'd like to start looking to the future, Congress has failed students 
miserably in the present. We need to fix that.
    One week ago, interest rates for more than 7.2 million students 
doubled from 3.4 percent to 6.8 percent. This should not have happened.
    With the job market still recovering, interest rates at historic 
lows, and student loan debt at a record high $1.1 trillion, we should 
not be asking students with the greatest need to be burdened by higher 
loan costs.
    Because Congress has not acted, this rate increase will cost 
borrowers an additional $1,000 per student, per loan. These borrowers 
are students like 28-year-old Brandon Anderson.
    Brandon had a difficult upbringing. He dropped out of high school 
and lived on his own because of family issues. He joined the army. He 
completed two tours of duty in Iraq. And next May he will graduate with 
a bachelor's degree from Georgetown University.
    Unfortunately, even while getting help from the G.I. Bill and 
significant aid from his school, Brandon is set to graduate with nearly 
$25,000 in student loan debt. And thanks to this Congress's inaction, 
Brandon will pay double the interest on next year's student loans.
    Brandon's loan debt has already caused him to forgo his dream of 
owning his first home before age 30 and abandon even more immediate 
needs like helping out his younger sister.
    This Congress has not done right by Brandon and the millions of 
other students who will graduate with mountains of debt. What the 
Congress has done so far is inexcusable. The House passed a Republican 
bill that featured bait and switch rates that actually made college 
more expensive--even more expensive than letting the rates double.
    Democrats offered a proposal that would freeze interest rates at 
3.4 percent for two years, while Congress considers long-term, 
comprehensive solutions to address rising college costs and 
affordability, during the reauthorization of the Higher Education Act.
    But our proposal was not allowed a vote on the House floor. And 
neither was President Obama's plan. The House majority even blocked a 
vote on that.
    At every corner, and specifically in the Senate and in the House 
Rules Committee, Republicans have blocked consideration of any bill 
that would provide debt relief to students, insisting instead that 
students be taxed higher interest rates to pay down the deficit.
    So, if we want to improve access and affordability in higher 
education, our immediate job today, as members of the one institution 
with the power to do so, should be to reverse the interest rate hike on 
7.2 million college students.
    That's why, two weeks ago, after efforts to stop the rate hike had 
clearly stalled, my colleagues and I introduced the Keep Student Loans 
Affordable Act of 2013. It is a one-year stop gap measure to keep rates 
low while all parties work out their differences on a longer term 
solution.
    And longer term, comprehensive solutions to rising college costs 
are critically needed. Those solutions will take time and effort. 
Congress, states, and institutions must work together to examine cost 
structures and ensure that we do not price students out of a higher 
education.
    A full reauthorization of HEA should promote affordability, 
retention and completion.Through cost-saving measures like redesigning 
courses, recognizing prior learning, and making better use of education 
technology, institutions can keep costs down to provide greater 
affordability for students.
    For example, the University of Maryland system integrated course 
redesign to increase class size, but continue to actively engage 
students in their studies. Arizona University, Western Governors' 
University, and Southern New Hampshire University, among others, are 
beginning to look beyond seat time and provide competency-based 
degrees--potentially shortening students' time to achieve a degree.
    And, many institutions are going online to reach a broader 
audience, and provide low-cost, high quality education to students. 
These are positive steps and I look forward to hearing from our 
witnesses today about how they are utilizing technology and other 
innovations on campus to reduce costs for students.
    In the meantime, we can make a difference right now by acting to 
keep rates low at least another year.
    I joined other members on June 28 in formally asking for a special 
meeting of the committee to mark up the Keep Student Loans Affordable 
Act--but received no response.
    We can schedule that markup right now, if a majority of the 
committee signs the special meeting notice. I have that notice right 
here. All Democratic members have signed. We only need three members 
from the other side of the aisle to sign this document, and we can then 
move legislation to reverse the rate hike.
    Students need interest rate relief now and Congress needs to act 
today to reverse this increase.
    We cannot let the American Dream become a dream permanently 
deferred for millions of college graduates drowning in debt. We counted 
on people like Brandon Anderson in Iraq. Now they are counting on us. 
Let's get this done.
    I yield back.
                                 ______
                                 
    Chairman Kline. The gentleman yields back.
    Pursuant to committee rule 7(c), all committee members will 
be permitted to submit written statements to be included in the 
permanent hearing record. Without objection, the hearing record 
will remain open for 14 days to allow statements, questions for 
the record, and other extraneous material referenced during the 
hearing to be submitted in the official hearing record.
    It is now my pleasure to introduce our distinguished panel 
of witnesses.
    Mr. Scott Jenkins currently serves as the director of 
external relations at Western Governors University where he 
collaborates with state and federal policy leaders to expand 
affordable higher education capacity through the WGU 
competency-based model.
    Dr. Pamela Tate is the president of the Council for Adult 
and Experiential Learning, CAEL, a national non-profit 
educational organization committed to expanding lifelong 
opportunities for adults.
    Mr. Burck Smith is the CEO and founder of StraighterLine, 
which provides online college course credit to students. Prior 
to launching StraighterLine he cofounded Smarthinking, the 
largest online tutoring provider for schools and colleges.
    And Dr. Joann Boughman currently serves as the senior vice 
chancellor for academic affairs at the University System of 
Maryland.
    Before I recognize each of you to provide your testimony I 
will remind you of our lighting system. It is not actually too 
complicated. It is green, yellow, and red.
    When the yellow light comes on please look to winding up 
your testimony. When the red light comes on try to wrap up as 
expeditiously as you can.
    I am loath to gavel down witnesses; we want to hear from 
you. But we need to hear from all of you and my colleagues 
would like the opportunity to engage in the discussion. As they 
all know, I am less reluctant to drop the gavel if they go 
beyond 5 minutes because everyone deserves a chance here today.
    I would now like to recognize Mr. Scott Jenkins for 5 
minutes.
    You are recognized, sir.

  STATEMENT OF SCOTT JENKINS, DIRECTOR OF EXTERNAL RELATIONS, 
                  WESTERN GOVERNORS UNIVERSITY

    Mr. Jenkins. Chairman Kline, Ranking Member Miller, members 
of the committee, thank you for the opportunity to testify 
before the committee today. I am Scott Jenkins from Western 
Governors University and I appreciate the committee's interest 
in considering innovations in higher education.
    As the members of the committee know, our nation is facing 
a crisis in higher education. The Georgetown Center on 
Education and the Workforce tells us that by 2018 66 percent of 
new jobs will require a college degree, and today only 40 
percent of adults have completed college. This means that the 
U.S. needs to produce roughly 1 million more qualified 
graduates a year.
    According to McKinsey and Company, to achieve this increase 
the U.S. would need to increase educational funding by $52 
billion a year or increase productivity by 23 percent. We must 
rethink the way we look at higher education and make 
fundamental changes, including adopting new models like 
competency-based learning.
    Western Governors University is a nonprofit, fully online 
university established in 1997 by a bipartisan group of 19 U.S. 
governors. From the start, WGU has demonstrated that higher 
education can be both affordable and high-quality. WGU offers 
accredited bachelor's and master's degree programs in the high 
demand areas of business, information technology, K-12 teacher 
education, and health professions.
    Growing by over 20 percent annually, the university has 
over 39,000 students and 25,000 graduates in all 50 states. The 
university is self-sustaining on tuition alone of $6,000 for 
most programs and we have not raised tuition in over 5 years. 
The average age of a WGU student is 37 years old, 68 percent 
work full-time, and a majority have completed some college when 
they enroll at WGU.
    The WGU approach to learning is unique in two important 
ways, resulting in increased productivity, a higher level of 
student support, and shorter times to graduation.
    First, WGU uses a competency-based learning model which 
measures learning rather than time. WGU enables students to 
move quickly through material they already know so that they 
can focus on what they still need to learn. Students advance by 
successfully completing assessments that measure competencies.
    This model dramatically shortens the time to degree. The 
average time to complete a bachelor's degree is just under 3 
years.
    The second unique attribute of our model is the use of 
technology to facilitate learning. Even with the improvements 
in online learning platforms and resources, the majority of 
online education is simply classroom education delivered 
through the Internet, instructor-led, time-based, and 
relatively costly.
    In contrast, WGU actually uses technology to provide 
interactive instruction that allows our students to learn at 
their own pace. Rather than delivering lectures, our faculty, 
all full-time, serve as mentors and are fully engaged in the 
learning process.
    We believe that WGU has demonstrated that new models of 
higher education, using technology and competency-based 
learning, have the potential to reduce costs and improve 
quality simultaneously.
    I recommend that Congress support legislation creating a 
demonstration project for competency-based education similar to 
the 1998 demonstration project for distance learning. This 
project would allow on a selected basis waivers of current 
financial aid statutes and rules that would allow innovative 
colleges and universities to explore ways of delivering 
education and dispersing financial aid based on learning rather 
than time.
    We need a regulatory environment that supports innovation. 
Everyone supports the goals of innovation but new regulations 
take us in the opposite direction.
    Two that have specifically had an adverse effect on WGU are 
those dealing with the credit hour and state authorization. 
State authorization alone has cost WGU more than $1 million 
over the past 18 months.
    With regards to the credit hour, it locks in place the 
current lackluster productivity of higher education. If an 
institution like Carnegie Mellon can create a course that can 
educate students just as well in half the time as a traditional 
course they are only permitted to give half the credit for that 
course.
    We need to remove barriers that judge institutions based on 
seat time, credit hours, and student-faculty ratios. The myth 
of the credit hour as a proxy to measure learning, allocate 
funding, or hold students and institutions accountable must 
end.
    We have found ways to use technology to customize learning 
to individual needs, make college more relevant and meaningful 
for students, adapt to learning styles, increase productivity, 
and expand access, and most importantly, improve quality and 
affordability.
    It is in that spirit that I call on Congress to write a new 
Higher Education Act rather than amending the 1965 HEA. It is 
clear that neither today's education nor today's students 
resemble those of 50 years ago. In 1965 higher education was 
more elite and students were generally full-time and between 
the ages of 18 and 24.
    Only 25 percent of today's postsecondary students fit that 
mold. Continuing to amend and tweak this 1965 law will do 
little to expand opportunity, restrain tuition growth, hold 
institutions and states accountable, or spur institutional 
innovation needed to education students for an economy that 
also bears little resemblance to 50 years ago.
    Institutions like WGU and a host of emerging innovators are 
blazing a path forward using authentic learning of competencies 
as the building blocks of a postsecondary education. It is time 
to take these successful, innovative higher ed options out of 
the hot house of ad hoc agreements and waivers and plant them 
in a hospitable ecosystem where they can flourish for the next 
50 years.
    I appreciate the opportunity and we look forward to working 
with you to advance innovation in higher education. I look 
forward to answering any questions you have.
    [The statement of Mr. Jenkins follows:]

    Prepared Statement of Alan Scott Jenkins, Director of External 
                Relations, Western Governors University

    Chairman Kline, Ranking Member Miller, and Members of the 
Committee, thank you for the opportunity to testify before the 
Committee today. I am Scott Jenkins from Western Governors University, 
and I appreciate the Committee's interest in considering innovations in 
higher education.
    As the members of the Committee know, our nation is facing a crisis 
in higher education. The Georgetown Center on Education and the 
Workforce tells us that by 2018, 66% of new jobs will require a college 
degree, and today, only 40% of adults have completed college. This 
means that the U.S. needs to produce roughly one million more graduates 
per year--40% more than we are producing today--to ensure that we have 
the skilled workers we need. According to a report published by 
McKinsey and Company in November 2010, to achieve this increase in 
degree production at the current cost, the U.S. would need to increase 
educational funding by $52 billion a year or increase higher education 
productivity by 23%.
    We know that we cannot increase funding for higher education at 
that level, so we must find ways to make higher education more 
productive and affordable. Efforts to cut a few percentage points of 
cost by streamlining administrative processes, reducing facility costs, 
and other savings measures will not be enough. We must re-think the way 
we look at higher education and make fundamental changes, including 
adopting new models like competency-based learning.
    In a report for the Center for American Progress, ``Disrupting 
College, How Disruptive Innovation Can Deliver Quality and 
Affordability to Postsecondary Education,'' Harvard Business School 
Professor Clayton Christensen and the Center's Director of 
Postsecondary Education Louis Soares discuss disruptive innovation in 
higher education. The report applies the principles of disruptive 
innovation--using technology and changing the business model--as an 
approach to make higher education more affordable and accessible. WGU 
and WGU Indiana are cited as examples of disruptive innovators in 
higher education.
    Western Governors University (WGU) is a nonprofit, fully online 
university established in 1997 by a bi-partisan group of 19 U.S. 
governors. The university's mission from the start has been to 
demonstrate that higher education can be both affordable and high 
quality. WGU offers accredited bachelor's and master's degree programs 
in the four high-demand workforce areas of business, information 
technology, K-12 teacher education, and health professions, including 
nursing. Growing by over 20% annually, the university has over 39,000 
students and 25,000 graduates in all 50 states and the District of 
Columbia.
    WGU provides high-quality education that is very affordable. The 
university is self-sustaining on tuition of $6,000 per year for most of 
our programs, and, while other institutions are raising tuition 
annually, WGU has not raised tuition for five years.
    Today, 37 million American adults have started, but not completed, 
a college degree. WGU was created to meet the needs of working adults 
and other individuals who do not have access to more traditional higher 
education. The average age of WGU students is 37 years old, most of our 
students have families, 68% work full time, and the majority have 
completed some college when they enroll at WGU. In addition, 76% are 
classified as underserved (ethnic minority, low income, rural, or first 
generation to complete college).
    The WGU approach to learning is unique in two important ways, 
resulting in increased productivity, a higher level of student support, 
and shorter times to graduation. First, rather than simply delivering 
classroom instruction through the Internet, WGU uses a competency-based 
learning model, which measures learning rather than time. This approach 
allows students to earn their degrees by demonstrating their mastery of 
subject matter rather than spending time in class to accumulate credit 
hours.
    We know two important things about adult learners: they come to 
college knowing different things, and they learn at different rates. 
Rather than requiring all students to complete the same classes, all 
lasting four months, WGU has created a model that allows students to 
move quickly through material they already know so they can focus on 
what they still need to learn. Students advance by successfully 
completing assessments that measure competencies, such as exams, 
papers, and performance tasks. To pass, they must earn the equivalent 
of a ``B'' grade or better. This model dramatically shortens the time 
to graduation--the average time to complete a bachelor's degree is just 
under three years.
    Required competencies for each degree program are defined in 
collaboration with external program councils that are composed of 
representatives from industry and higher education. By working with 
these councils, we ensure that our students graduate with the knowledge 
and skills employers need.
    The second unique attribute of our model is the use of technology 
to facilitate learning. Technology has increased the productivity of 
nearly every industry except education, where it is most often an add-
on cost and not used to change or improve teaching and learning. Even 
with the improvements in online learning platforms and resources, the 
majority of online education is simply classroom education delivered 
through the Internet, instructor-led and time-based. As a result, most 
online higher education is no more affordable and no better than 
traditional education.
    In contrast, WGU actually uses technology to provide interactive 
instruction that allows students to learn at their own pace. Rather 
than delivering lectures, our faculty, all full time, serve as mentors, 
and are fully engaged in the learning process, leading discussions, 
answering questions, and serving as role models for their students. WGU 
does not develop course content and curriculum; faculty members 
identify and qualify learning resources from the best third-party 
sources in the country.
    The Northwest Commission on Colleges and Universities accredits 
WGU. The WGU Teachers College, which offers initial teacher licensure 
as well as nationally recognized math and science education programs, 
has earned accreditation from the National Council for the 
Accreditation of Teacher Education (NCATE) and is on the National 
Center for Teacher Quality (NCTQ) Honor Roll. Our nursing programs are 
accredited by the Commission for Collegiate Nursing Education (CCNE).
    The debate used to be whether online learning was ``as good as'' 
classroom education. That is not the right question. The question is, 
can technology and competency-based learning allow us to have better 
education at lower cost. We need to improve both quality and 
affordability.
    At WGU, we measure our success by the engagement and success of our 
students. Here are some key data:
     In the National Study of Student Engagement (NSSE), WGU 
consistently scores significantly above the average of all 
participating institutions in areas such as the level of academic 
challenge, relationships with faculty, and overall educational 
experience.
     The university's one-year retention rate is 79%, and 85% 
of our students are in good academic standing.
     On our most recent student satisfaction survey, 97% 
reported that they are satisfied with their experience and that they 
would recommend WGU.
     Approximately 65% of graduates surveyed said they had 
received a raise, promotion, or new job as result of their WGU degree, 
and 97% said they would recommend WGU.
     On our 2012 employer survey, 98% rated the preparation of 
WGU graduates as equal to or better than graduates of other 
universities; 55% rated it better.
     On the Collegiate Learning Assessment, which measures 
general education skills, WGU's value-added score was in the 93rd 
percentile of all universities participating.
    We do not claim that we have achieved the perfect model for higher 
education at WGU. But we believe we have demonstrated that new models 
of higher education--using technology and competency-based learning--
have the potential to reduce costs and improve quality simultaneously.
    As the U.S. higher education community works to increase access and 
affordability, I encourage the Committee and Congress to support the 
institutions that are ``disruptive innovators,'' providing quality 
education at a lower cost. Opponents of new models and innovative 
approaches to higher education can be vocal and sometimes convincing, 
but the best way to evaluate the quality and effectiveness of these 
institutions is on their educational results--that is, is it high 
quality, affordable and effective in meeting the needs of students and 
employers.
    Specifically, I recommend that Congress support legislation 
creating a ``Demonstration Project'' for competency-based education, 
similar to the 1998 demonstration project for distance learning. This 
project would allow, on a selected basis, waivers of current financial 
aid statutes and rules that would allow innovative colleges and 
universities to explore ways of delivering education, measuring 
quality, and disbursing financial aid based on learning, rather than 
time. This project could also help determine the specific statutory and 
regulatory requirements which should be altered to encourage the 
development of high quality, competency-based degree programs.
    We also need a regulatory environment that supports innovation. 
Everyone supports the goals of innovation, but we have seen over the 
past several years that rather than supporting innovation, new 
regulations have been enacted that take us in the opposite direction. 
Two of those regulations that have specifically had an adverse effect 
are those dealing with Credit Hour and State Authorization. Simply put, 
State Authorization has cost WGU more than $1,000,000 over the past 18-
months. Those precious dollars could have been spent much more 
effectively on students.
    With regards to the Credit Hour regulation, it perpetuates the myth 
of measuring time and distributing financial aid based on time. 
Specifically, it locks in place the current productivity of higher 
education. If an institution like Carnegie Mellon can create a course 
that can educate students just as well in half the time as a 
traditional course, they are only permitted to give half the credit for 
that course, even though the learning is equal or better than the 
traditional course. We need to remove barriers that judge institutions 
based on seat time, credit hours, and student-faculty ratios. The myth 
of the credit hour as a proxy to measure learning, allocate funding, or 
hold students and institutions accountable must end. It creates 
perverse incentives that hinder progress and innovation. We base almost 
every policy in higher education on a vague ``credit hour'' measure 
equaling 15 clock hours of actual time in the classroom and 30 hours of 
study time outside of the classroom. It's clear that we don't actually 
measure this time and if we did, it would vary widely between students. 
Colleges and universities should be held to a higher standard, an 
unambiguous standard of actual student learning. It is vital that 
Congress support new, more cost-effective models of higher education. 
America needs our legislators to highlight and promote new models that 
focus on outputs and ensure that future legislation and regulations 
support, rather than hinder, development of new models.
    It is time for higher education to fully take advantage of 
technology to re-think higher education. We have found ways to use 
technology to customize learning to individual needs, make college more 
relevant and meaningful for students, adapt to student learning styles, 
increase productivity, expand access, and, most importantly, improve 
quality and affordability. It is in that spirit that I call on Congress 
to write a new Higher Education Act, rather than amending the 1965 HEA, 
written almost 50 years ago. It is clear that neither today's education 
nor today's students resemble those of 50 years ago. In 1965, higher 
education was more elite, and students were generally full-time and 
between the ages 18 and 24. Only 25% of today's postsecondary students 
fit that mold. The Internet and personal computers hadn't been invented 
yet. Continuing to amend and tweak this 1965 law will do little to 
expand opportunity, restrain tuition growth, hold institutions and 
states accountable, or spur the institutional innovation needed to 
educate students for an economy that also bears little resemblance to 
50 years ago. Institutions like WGU, and a host of emerging innovators, 
are blazing a path forward using authentic learning of competencies as 
the building blocks of a postsecondary education. It is time to take 
these successful innovative higher education options out of the hot 
house of ad-hoc agreements and waivers, and plant them in a hospitable 
ecosystem where they can flourish for the next 50 years.
    I appreciate this opportunity and we look forward to working with 
you to advance innovation in higher education. I look forward to 
answering any questions that you may have.
                                 ______
                                 
    Chairman Kline. Thank you.
    Dr. Tate, you are recognized for 5 minutes.

 STATEMENT OF DR. PAMELA TATE, PRESIDENT AND CEO, COUNCIL FOR 
                ADULT AND EXPERIENTIAL LEARNING

    Ms. Tate. I want to thank Chairman Kline and members of the 
committee for the opportunity to testify. I am Pamela Tate, 
president and CEO of CAEL, the Council for Adult and 
Experiential Learning. We are a national nonprofit organization 
focused on the adult and nontraditional learner.
    The timing is right for rapid expansion of prior learning 
assessment--I will refer to it as PLA. It is a term that is 
used to describe a process for evaluating adults' college-level 
learning from life and work experience for college credit, and 
there are various methods of doing it: college credit by 
examination, credit recommendations based on non-college 
program evaluation, and individualized portfolio assessment.
    It has been around for a long time, but with the growing 
focus on the value of postsecondary credentials and degrees and 
making education more affordable, it is more important than 
ever before.
    One in five people in the country right now--that is over 
43 million--have some college credit but no degree. They are 
typically working adults. They stopped college for many 
reasons, but the biggest barriers were time and money.
    At the same time, the opportunities for learning have 
exploded in number and variety. Adults are coming to 
postsecondary ed with learning that has taken place outside our 
formal institutions.
    Think about all the learning that takes place in the 
military, through employer training, on the job, through self-
study, volunteer work, online courses. Some of that learning is 
college level and you can measure the outcomes.
    So PLA is a great solution because it measures learning, 
not time spent. It saves time and money for students and 
employers. It keeps students from sitting through classes in 
subjects they already know.
    And yet, not one of our major financial aid programs 
explicitly covers the cost associated with PLA. Currently, Pell 
Grants and section 127, employer tuition assistance programs, 
either do not allow or are unclear about whether PLA is an 
allowable expense. The financial aid system is simply not 
structured for a learning outcomes-based--assessment-based 
approached.
    CAEL conducted extensive research in 2010 and we found that 
adult students with PLA credits are 2-\1/2\ times more likely 
to persist to degree completion than adults without PLA 
credits. We also found that it reduced the time to degree and 
saved students money.
    The public gets it. In a recent Lumina Gallup poll 87 
percent of Americans said that students should be able to 
receive college credit for knowledge and skills acquired 
outside the classroom.
    If this is offered according to accepted CAEL-type quality 
standards, PLA is a rigorous and demanding assessment of 
learning. Students have to demonstrate learning that is 
equivalent to what is gained in college.
    And yet, it is still not available and accessible to most 
adults. We need to bring it to scale and we can no longer wait, 
given the urgent need to promote affordable degrees and 
completion of credentials.
    Two things have to happen to put it within reach of adult 
learners: first, access to a large-scale, online PLA service; 
and second, supportive federal and state policies.
    CAEL has been addressing the first issue by working with 
hundreds of individual institutions to develop PLA programs. We 
have also launched a national online PLA service called 
LearningCounts.
    But we have also worked with state leaders on creating 
policies that support PLA statewide. We are already working in 
Chairman Kline's home state of Minnesota, Colorado, Georgia, 
Indiana, Kentucky, Massachusetts, Montana, Ohio, Pennsylvania, 
Tennessee, Texas, and Wisconsin.
    Here is a final example of how PLA can transform lives: 
Jason Wolfe, a Navy veteran in his 30s, was able to use his 
military and job training to earn college credit through 
portfolio assessment for eight courses toward a bachelor's 
degree in industrial manufacturing engineering. This enabled 
him to avoid taking an entire year of courses in subjects he 
had already learned during service to our country.
    For the millions of adult learners who could benefit from 
PLA, for the employers who need a skilled workforce, and for 
the taxpayers who should not be asked to pay for courses twice, 
I respectfully ask that you consider including all forms of PLA 
that adhere to quality standards as allowable expenses for 
financial aid purposes. This change would have a real impact on 
our country's ability to build a strong, educated workforce.
    And in the meantime, Congress has already authorized the 
Experimental Sites Initiative under the Department of 
Education. This would provide a great opportunity to expand our 
understanding of how PLA can improve access and success for 
adult learners on a large scale.
    Thank you.
    [The statement of Ms. Tate follows:]

Prepared Statement of Dr. Pamela J. Tate, President and Chief Executive 
      Officer, Council for Adult and Experiential Learning (CAEL)

    I am Pamela Tate, President and CEO of the Council for Adult and 
Experiential Learning, also known as CAEL. CAEL is a national non-
profit organization that is focused on the adult and nontraditional 
learner. We work with colleges and universities on their programs and 
services to adults; we connect employers, public agencies, and 
postsecondary institutions to advance the education of the workforce; 
we work with states, systems and consortia on solutions for 
postsecondary learning and credentials; and we educate the public and 
public officials on what is needed to remove the barriers to lifelong 
learning and adult degree completion.
    Thank you for inviting me here today. I have been asked to provide 
you with information about prior learning assessment, also known as 
PLA. Some definitions may be helpful:
     Prior learning is a term educators use to describe 
learning that a person acquires outside a traditional academic 
environment. This learning may have been acquired through work 
experience, employer training programs, military training or 
experience, independent study, non-credit courses, volunteer or 
community service, travel, or non-college courses or seminars, many of 
which are offered on-line. Some of this learning is equivalent to 
college-level learning.
     Prior learning assessment (PLA) is the process by which an 
individual's experiential and other extra-institutional learning is 
assessed and evaluated for the purposes of granting college credit, 
certification, or advanced standing toward further education or 
training.
    PLA methods have been used in U.S. colleges and universities for 
more than forty years. So while PLA itself is not a new innovation, it 
is a tool that is growing in importance as other innovations in higher 
education have emerged.
    The experiences of the students themselves tell the story. For 
example:
     A Navy veteran was able to use his military and job 
training to earn credit not only through American Council on Education 
credit recommendations, but also through a prior learning portfolio, 
toward a bachelor's degree in Industrial Manufacturing Engineering. To 
earn credit for a course in Safety Engineering, for example, he drew on 
learning in subjects such as personal protection equipment and fire 
fighting; this is learning that he had acquired in basic training and 
as a Safety Observer aboard the USS Theodore Roosevelt. He earned 
college credit for a total of eight courses, or 24 credits, through 
portfolio assessment.
     A 40 year old married mother of two had never graduated 
from high school because she had to drop out and get a job in order to 
help take care of her younger siblings. She started working as a 
janitor at a transportation company as a teenager and worked her way up 
to the level of middle manager, a position in which she was responsible 
for managing servers and analyzing data. She got her GED in 1999, was 
laid off, and a few years later started taking college classes. She 
struggled through remedial coursework and progressed to taking regular 
coursework, studying on and off for 11 years while also working part 
time jobs. When she learned about PLA, she enrolled at a college that 
accepted PLA credits. Based on what she had learned from her work 
experience, she earned six credits from portfolio assessment for two 
business courses and six credits through a CLEP exam. This past spring, 
she graduated with a bachelor's degree in communication studies.
    The timing is right for increasing student access to PLA given the 
strong national focus on making college more affordable, promoting 
degree completion and increasing educational attainment rates--to 
support our nation's economic competitiveness. We know from the work 
just released by Georgetown University's Center on Education and the 
Workforce that, at the current production rate in higher education, 
``we will fall 5 million short of the workers with postsecondary 
credentials we will need by 2020.''\i\
    PLA is a proven strategy that should be considered as one important 
way to support students' degree completion because it addresses two 
important issues: first, PLA addresses the biggest barriers to 
education for working adults, which are time and money; second, because 
PLA is a critical tool for helping mobile, working adult students who 
are taking advantage of the new world of higher education that is 
emerging.
     Addressing the barriers of time and money. One in five 
U.S. adults--over 43 million people--have some college credits but no 
degree.\ii\ These are typically working adults who may have left 
college for a multitude of reasons but the biggest barriers are always 
time and money, with the money issue leading some students to incur 
high levels of debt. PLA saves students time and money because by 
demonstrating what they have learned, they can receive credit for 
courses in subjects they have already mastered. They do not need to 
spend their time in those courses, nor do they need to pay full tuition 
for those courses. They can advance to higher level courses sooner and 
accumulate the credit they need for a degree or certificate more 
quickly. This only makes sense: why should a student's own money or an 
employer's tuition program (or, by extension, the federal government 
through financial aid programs) pay full tuition for courses in 
subjects that the student already knows?
     Addressing the new world of higher education. PLA is also 
a tool that can help students who are taking advantage of the new and 
free open educational resources such as iTunesU; the new, massive open 
online courses, also known as MOOCs, offered through EdX, Coursera, 
Udacity and others); competency-based degree programs; and all of the 
other learning opportunities available to them in this new world of 
internet-based learning that is transforming higher education before 
our eyes. PLA helps by enabling students to validate that learning for 
college credit that can count towards a credential or degree--at a much 
lower cost.
    As a supporter and promoter of PLA since 1974, CAEL has seen 
dramatic growth in the interest in PLA in recent years--from individual 
institutions, state systems, employers and federal leaders. We are also 
seeing evidence of public support for PLA. In a recent national poll 
conducted by Lumina Foundation for Education and Gallup, 87 percent of 
Americans responded that students should be able to receive college 
credit for knowledge and skills acquired outside the classroom; and 75 
percent said that they would be more likely to enroll in postsecondary 
education if they could receive credit for what they already know.\iii\
    Yet PLA is still not available and accessible to all students, even 
though it should be part of every program of study for any student who 
has college-level learning acquired outside of traditional academia. We 
need two changes: infrastructure to provide PLA at scale, and federal 
and state policies--particularly federal financial aid policies--that 
support PLA.
    The infrastructure problem is that not every institution offers the 
full range of PLA options, if at all. My organization, CAEL, has been 
addressing that issue by working with individual colleges to develop 
PLA programs and practices over the past several decades; by working 
with state leaders on creating policies that support and encourage PLA 
statewide; and by offering a national online PLA service, 
LearningCounts.org, in order to bring PLA to the millions of adults 
with some college but no degree, expanding the capacity of 
postsecondary education.
    The main policy issue is that, currently, federal financial aid 
programs like Pell grants and federal loans support only traditional 
time-based learning. The financial aid system under Title IV is not 
structured for an outcomes-based and assessment-based approach to 
postsecondary completion. It excludes assessment of prior learning 
fees, even though these fees significantly reduce the student's overall 
student loan debt or the amount to be covered by Pell grants or other 
educational benefits.
    In this testimony, I am providing some additional information about 
PLA history, current practices, quality standards, and, most 
importantly, evidence of its value to students in the completion of 
credentials and degrees. The committee will see that PLA is a proven 
and valid strategy for supporting mobile and nontraditional learners, 
and that it does not make sense that our current financial aid rules 
and regulations create disincentives for students to use PLA. The 
financial aid system needs to change so that it covers the assessment 
of learning for college credit or other measures of progress towards a 
degree--with appropriate safeguards for quality assurance. This change 
in policy would mean that our financial aid system would support 
learning, and credential and degree completion, as its goal and not 
time spent in a classroom.
A Brief History of PLA and the Adult/Nontraditional Learner
    CAEL has been supporting and promoting the use of PLA in 
postsecondary education since the 1970s, a time when postsecondary 
education began to see a surge of adult enrollment. It is probably not 
a coincidence that this surge began around the same time as the initial 
signing of the Higher Education Act (HEA) in 1965. The support from the 
HEA and other federal programs made community colleges and need-based 
financial aid available to more people than ever before, and many 
adults started taking advantage of that increased access.\iv\
    Some colleges and universities welcomed adults initially because 
the adult enrollments helped them meet their enrollment goals, so new 
programs for adults began to emerge. In addition, pressure from 
legislatures and the public on postsecondary education to become more 
accountable for performance led to new approaches that assessed what 
students learned rather than measuring what was taught, including 
standardized tests like the College Level Examination Program (CLEP) 
which the College Board had started administering in 1967; and the New 
York Board of Regents' Regents External Examination Program--now called 
UExcel--which had been launched in the 1970s.
    With funding from the Carnegie Corporation and the Education 
Foundation of America, the Educational Testing Service and the College 
Board launched a three year project in 1974 to explore the following 
question: ``Is it possible to assess, validly and reliably, learning 
acquired outside the classroom for the award of college credit?'' At 
the conclusion of that project (which also effectively served as the 
launch of CAEL), the findings were that yes, it is possible to conduct 
valid and reliable assessment of learning gained from work or life 
experience, with the proviso that appropriate procedures and processes 
for evaluating that learning are in place.\v\
    Today's learner is, of course, very different from the learner of 
the 1960s and 1970s, and the educational landscape is very different as 
well.
     Today's Learner. When most people think about college 
students, what comes to mind is the 18-22 year old who attends college 
right out of high school. Yet, that college student is, in fact, the 
minority of enrollments these days. Today, students age 25 and older 
now account for more than 40 percent of all undergraduate 
enrollment.\vi\ Yet age is not the only differentiator when we look at 
today's nontraditional students. In 2002, the National Center for 
Education Statistics defined nontraditional students as those who:
     Have delayed enrollment in postsecondary education beyond 
the first year after high school graduation
     Attend part time
     Are financially independent from their parents
     Work full time
     Have dependents other than a spouse
     Are a single parent
     Have no high school diploma or GED \vii\
    Analysis by the NCES found that more than half of all enrolled 
students were financially independent, 73 percent had at least one of 
the above characteristics, and 56 percent had two or more 
characteristics. In fact, because of these remarkable statistics, there 
is some discomfort among some postsecondary education leaders about 
even using the term ``nontraditional'' since that group is now 
essentially the norm.
     Student Mobility. Today's learner is also more mobile than 
ever before.\viii\ It is now very common for students to earn college 
credits from two or more institutions. In 2006, analysis showed that 
almost 65 percent of all undergraduate students attended more than one 
institution, and 26 percent attended more than two.\ix\
     Changing Educational Landscape. Student mobility is no 
longer just about attending more than one postsecondary education 
institution. Now, mobility of learning experiences extends far beyond 
the borders of what we know as traditional colleges and universities. 
There have, of course, always been opportunities for people to learn 
outside of the classroom. Public television has long offered 
educational programs, libraries have offered free books on a range of 
topics, and the workplace has given people countless ways of learning-
while-doing. In recent years, however, we have seen the number and 
range of online learning opportunities explode. Colleges and 
universities offer online courses, but so do new low-cost providers 
like StraighterLine, no-cost providers like the Saylor Foundation, and 
the new entities named earlier that are offering massive open online 
courses, or MOOCs (many of the most well-known MOOCs are offered in 
partnership with the nation's elite institutions such as MIT, Harvard, 
and Stanford).
    We are also seeing the rapid growth of other approaches to learning 
such as competency-based education, which shares with PLA this 
important concept: that what students know and can do is far more 
important than where or how they learned it. Competency-based degree 
programs work this way: the postsecondary education institution defines 
a degree not in terms of the number of credit hours in various topics, 
but rather in terms of the competencies that students are expected to 
demonstrate for graduation. The institution then provides access to 
learning experiences, which can look like traditional courses or could 
be learning resources available for free online; finally, the 
institution assesses the student's competencies. These assessments 
should go beyond examining whether a student has acquired knowledge by 
also requiring that students demonstrate how their learning can be 
applied.
    Even more so than in the 1970s, PLA is an ideal tool for today's 
learner in today's educational landscape. Today's learner has acquired 
learning through years of work and life experience and independent 
learning opportunities online that, if demonstrated to be at the 
college level, can and should count toward that learner's education. 
Today's learner is also facing dramatic changes in the kinds of 
learning opportunities available to them. PLA allows these learners to 
get credit for what they learn, without regard for how or where they 
learn it.
Current PLA Practices
            PLA Methods
    The amount of credit (or other recognition) students can earn for 
their prior learning can be determined through several different types 
of assessments. There are four generally accepted approaches to PLA:
    1. Individualized assessments. In this method, students prepare a 
portfolio of their learning from a variety of experiences and non-
credit learning such as online courses. Then, faculty with appropriate 
subject matter expertise evaluate the student's portfolio to determine 
a credit award.
    2. College faculty-developed exams, also called ``challenge 
exams,'' allow students to earn credit by taking final examinations 
faculty create for courses offered at a given institution.
    3. Standardized exams such as:
      Advanced Placement Examination Program (AP exams)
      College Level Examination Program Exams (CLEP exams)
      Excelsior College Exams (UExcel)
      The DANTES Subject Standardized Tests, or DSST Exams
    4. Evaluated non-college programs. The National College Credit 
Recommendation Service (NCCRS) and the American Council on Education 
(ACE) conduct evaluations, for a fee, of training that is offered by 
employers or the military. Many employers also work directly with local 
postsecondary institutions to evaluate their companies' training. The 
result of these evaluations is credit recommendations for anyone 
successfully completing that training.
            PLA and Current Practice in Postsecondary Education
    Most colleges and universities have some policy in place for 
awarding credit for learning that takes place elsewhere, but the 
policies are rarely comprehensive and they vary widely; and few 
institutions publicize--much less track--the extent to which credit for 
prior learning is awarded. In addition, the National Center for 
Education Statistics (NCES) does not currently collect detailed 
information from institutions regarding their PLA policies and 
practices. We do know anecdotally and from past survey research that 
there is great variability in what institutions do offer, when they 
offer PLA at all. For example, from a survey CAEL conducted of PLA-
providing institutions in 2005-2006, we know that most PLA-accepting 
institutions accept course credits from AP exams and CLEP exams. 
However, a different subset of institutions accepts ACE credit 
recommendations, and yet another subset accepts credit through 
portfolio assessment.
    Some institutions--particularly those whose missions focus on the 
adult learner--offer a full range of PLA options and some institutions 
have made a concerted effort to fully integrate PLA into their 
comprehensive approaches to serve adult learners.
    Some states have established--or are working to establish--system-
wide PLA policies and practices. Both the Florida and Pennsylvania 
state systems, for example, have policies that encourage PLA across all 
institutions, and Tennessee has developed statewide policy 
recommendations for PLA across all of its public institutions.\x\ 
Vermont State Colleges has taken a different approach by offering PLA 
in a coordinated way among a group of institutions. These system wide 
approaches to PLA are noteworthy in that they formally recognize PLA's 
value and encourage its use within and across institutions. These 
states have chosen PLA as an important strategy for re-engaging adults 
in postsecondary education. Without this strategy, states recognize 
that given the changing demographics of the workforce, they will not 
have the credentialed workforce required for attracting new employers 
and fostering economic development.
            The Value of PLA for Adult and Mobile Students--and for Our 
                    Nation's Economy and Competitiveness
    As noted earlier in this testimony, the major impetus for promoting 
PLA is the fact that the nation's economic future will depend upon an 
educated workforce. Georgetown University's Center on Education and the 
Workforce has noted that by 2020, 65 percent of all jobs in the economy 
will require postsecondary training and education beyond high school, 
and that, at current rates of production, we will be falling short of 
this need by 5 million workers.\xi\ For this reason, Congress must take 
this opportunity of the reauthorization of the HEA to encourage greater 
postsecondary attainment and degree completion.
    Prior learning assessment obviously saves students time and money 
in that the students do not need to take courses in subjects they 
already know. In terms of time, CAEL research of adult learners at 48 
colleges and universities found that the average number of credits 
earned through PLA is 17, which is equivalent to more than a semester, 
or 4-6 months, for a full-time student.\xii\ This time savings can be 
substantial for working learners who are attending school part time. We 
know that the longer an adult remains in college, the more likely it 
will be for life to ``get in the way'' and cause the student to drop 
out or otherwise stop their progress. In terms of money, CAEL research 
suggests that adult students who earn 15 credits through PLA can save 
from a low of around $1,605 at a large public university to a high of 
around $6,000 at other institutions.\xiii\
    In addition, PLA advocates and college administrators have long 
professed that PLA can motivate students to persist in their studies 
and earn their degrees. Perhaps it is motivating because the finish 
line is that much closer, but there may be another factor as well. 
Awarding PLA credit sends students a message that not only can they 
learn at the college level, but also that they already have learned at 
the college level. That can be a powerfully motivating message to hear.
    There is strong evidence of a relationship between PLA credit-
earning and degree completion. In 2010, CAEL conducted a study of more 
than 62,000 adult students at 48 postsecondary institutions, comparing 
the outcomes of students with PLA credit to the outcomes of students 
without such credit. Over a seven year period, PLA students were two 
and a half times more likely to have earned a degree than students 
without PLA credit (56 percent compared with 21 percent) (Figure 
1).\xiv\

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    CAEL also examined the student academic outcomes by different 
demographic groups and found similar patterns of degree completion 
regardless of the student's age, gender, race/ethnicity, income level, 
GPA, size of institution, and several other characteristics. These 
positive findings suggest that awarding college credit for significant 
extra-institutional learning is an effective way to accelerate degree 
completion for nontraditional students.
            Quality Standards for PLA
    Leading institutions offering PLA recognize that there is a need to 
ensure that quality standards are in place for the assessment of a 
student's learning that leads to the award of college credit. Many 
adhere to the Ten Standards for Quality Assurance in Assessing Learning 
for PLA policies and practices (some colleges know these as the ``CAEL 
PLA Standards''). These standards were derived by Urban Whitaker from 
principles developed in the 1970s and published by CAEL in Assessing 
Learning: Standards, Principles, and Procedures in 1989; the standards 
were most recently revised in 2006 for a second edition of CAEL's 
Assessing Learning by Morry Fiddler and Catherine Marienau.
    The ten standards include five academic standards and five 
administrative standards:
    1. Credit or its equivalent should be awarded only for learning, 
and not for experience.
    2. Assessment should be based on standards and criteria for the 
level of acceptable learning that are both agreed upon and made public.
    3. Assessment should be treated as an integral part of learning, 
not separate from it, and should be based on an understanding of 
learning processes.
    4. The determination of credit awards and competence levels must be 
made by appropriate subject matter and academic or credentialing 
experts.
    5. Credit or other credentialing should be appropriate to the 
context in which it is awarded and accepted.
    6. If awards are for credit, transcript entries should clearly 
describe what learning is being recognized and should be monitored to 
avoid giving credit twice for the same learning.
    7. Policies, procedures, and criteria applied to assessment, 
including provision for appeal, should be fully disclosed and 
prominently available to all parties involved in the assessment 
process.
    8. Fees charged for assessment should be based on the services 
performed in the process and not determined by the amount of credit 
awarded.
    9. All personnel involved in the assessment of learning should 
pursue and receive adequate training and continuing professional 
development for the functions they perform.
    10. Assessment programs should be regularly monitored, reviewed, 
evaluated, and revised as needed to reflect changes in the needs being 
served, the purposes being met, and the state of the assessment arts.
    These standards for quality assurance in PLA policy and practice 
are followed by many institutions voluntarily in order to assure their 
students and accreditors that credit is being awarded based on a 
rigorous process of assessing a student's college level learning. Many 
postsecondary institutions attest to following these specific standards 
on their websites, while others customize the standards to their 
specific institutional considerations. As noted by the Assessing 
Learning authors, ``A conscious decision to adopt the standards--or 
reject them but replace them with a different set--is the most 
practical starting point for bringing the standards to life. Not 
surprisingly, this conscious decision, and the discussions or debates 
that come with it, provide a foundation for aligning good policies with 
good practices.'' \xv\
    Several of the six regional accreditors also reference the CAEL 
quality standards in their own policies regarding PLA.
Why Policy Needs to Change to Support PLA
    CAEL has spent much of the last 40 years promoting PLA within 
postsecondary education institutions across the country. In the 
process, we have come to realize that working with individual 
institutions, one at a time, will not bring PLA to scale, and the 
country can no longer wait given the urgent need to promote affordable 
degree and credential completion. Two things need to happen to put PLA 
within reach of adult learners: the availability of an on-line, large 
scale PLA infrastructure, and supportive federal and state PLA policy.
Building Large Scale Infrastructure for PLA
    As noted at the beginning of my testimony, the infrastructure 
problem is that only rarely do institutions offer the full range of PLA 
options. One way that we have been addressing that issue is by working 
with individual colleges to develop PLA programs and practices, train 
their leadership and staff to better understand PLA, and train their 
faculty on best practices in portfolio assessment according to our 
quality standards.
    We are also working to build awareness among students and 
employers, since many do not know about PLA or of its potential 
benefits.
    For institutions that have not developed their own PLA programs, or 
who do not have the capacity to assess learning in all areas, CAEL 
launched and now offers LearningCounts.org, an online PLA service. 
LearningCounts provides initial advising to adult learners to determine 
whether they are good candidates for PLA and what PLA methods are 
appropriate. The service also offers online courses on how to develop a 
portfolio, and uses faculty assessors from throughout the U.S., trained 
by CAEL, to assess students' portfolios for college credit. 
LearningCounts is not intended to compete with existing PLA services at 
postsecondary institutions, but rather to increase capacity where it is 
needed. Some postsecondary education systems are, in fact, turning to 
LearningCounts as a way to offer consistent PLA services across 
multiple colleges and universities rather than building each college's 
system from scratch. Examples include the Pennsylvania State System of 
Higher Education and the Alamo Colleges (a community college system in 
San Antonio).
Supportive Federal and State PLA Policy
    Large scale PLA can be implemented more quickly by a state system 
approach. Therefore, we have also been working with state leaders on 
creating policies that support and encourage PLA across multiple 
institutions, most notably Chairman Kline's state of Minnesota, as well 
as Colorado, Georgia, Indiana, Kentucky, Massachusetts, Minnesota, 
Montana, Ohio, Pennsylvania, Tennessee, Texas, and Wisconsin. A few 
states have already passed legislation or established state-wide 
policies for PLA, and most of this activity has been in the last two 
years or so.\xvi\
    One of the biggest policy barriers, however, is federal financial 
aid. Some methods of PLA do not cost anything for the student, but many 
important ones do have reasonable fees to cover the cost of expert 
faculty assessment. Currently, federal financial aid programs like Pell 
grants support only traditional time-based learning. The financial aid 
system is not structured for an outcomes-based and assessment-based 
approach to postsecondary completion, even if those approaches have the 
potential to help the student make real progress towards a degree or 
credential at a lower cost. The financial aid system does not consider 
as eligible educational expenses any assessment fees. Without a fresh 
approach to financial aid in its treatment of PLA, adults will not have 
the same incentive to have their college level learning count when it 
matters the most.
    Right now is the ideal time to examine what kind of changes need to 
be made to the HEA in order to support PLA as an allowable expense for 
federal financial aid while ensuring adherence to quality standards. A 
few years ago, Congress gave the U.S. Department of Education the 
authority to examine just these kinds of questions through the 
``experimental sites'' initiative. Testing various models for using 
federal financial aid for PLA, through experimental sites, would help 
to inform the changes to be considered in the future reauthorization of 
the HEA.
    Such a change in the HEA for Pell grants could be a model for other 
federal educational benefit programs for explicitly covering PLA-
related expenses. For example, the GI Bill education benefits are 
unclear as to whether veterans can take advantage of PLA through the 
portfolio method. Similar clarity is also needed for workforce training 
programs under the Workforce Investment Act, many of which involve 
postsecondary level instruction and credentials. Further, some 
employers believe there needs to be clarity on PLA as an allowable 
expense for employer educational benefits in Section 127 of the tax 
code. Employers are supportive of PLA and know that it can save their 
employees time and money, but some are concerned about whether PLA is 
allowed under Section 127.
    I respectfully ask that this committee recommend to the Department 
of Education the establishment of an experimental site for PLA, in 
order that we might learn how best to structure financial aid coverage 
of PLA. Seeing financial aid coverage for PLA in the reauthorization of 
HEA would have powerful impact on our country's ability to build a 
strong, educated and credentialed workforce. Thank you. I look forward 
to answering any questions you may have.
                                endnotes
    \i\ Anthony P. Carnevale, Nicole Smith, and Jeff Strohl. Recovery: 
Job Growth and Education Requirements through 2020. Executive Summary 
(Washington, D.C.: Georgetown University Center on Education and the 
Workforce, 2013), http://cew.georgetown.edu/recovery2020/ (accessed 3 
July 2013), 2.
    \ii\ American Community Survey, Educational Attainment, Table 
S1501, 2011.
    \iii\ Lumina Foundation for Education and Gallup, America's Call 
for Higher Education Redesign: The 2012 Lumina Foundation Study of the 
American Public's Opinion on Higher Education. (Indianapolis, IN and 
Washington, D.C.: February 5, 2013), http://www.luminafoundation.org/
publications/Americas--Call--for--Higher--Education--Redesign.pdf 
(accessed 3 July 2013), 8.
    \iv\ Thomas Brock, ``Young Adults and Higher Education: Barriers 
and Breakthroughs to Success,'' Transition to Adulthood, 20, no. 1 
(2010), http://futureofchildren.org/publications/journals/article/
index.xml?journalid=72&articleid=523?ionid=3589 (accessed 3 July 3 
2013), 111-113.
    \v\ Diana Bamford-Rees, ``Thirty-Five Years of PLA: We've Come a 
Long Way,'' in Prior Learning Portfolios: A Representative Collection, 
eds. Denise M. Hart and Jerry H. Hickerson. (Chicago: CAEL, 2009).
    \vi\ U.S. Department of Education, National Center for Education 
Statistics. Digest of Education Statistics, 2011 (NCES 2012-001), 
Chapter 3, Table 200 . (Washington, D.C.: U.S. Department of Education, 
2012), http://nces.ed.gov/programs/digest/d11/tables/dt11--
200.asp?referrer=report (accessed 3 July 2013).
    \vii\ Susan Choy, Nontraditional Undergraduates (Washington, DC: 
U.S. Department of Education, National Center for Education Statistics, 
2002).
    \viii\ See discussion in Rebecca Klein-Collins, Amy Sherman, and 
Louis Soares, Degree Completion Beyond Institutional Borders: 
Responding to the New Reality of Mobile and Nontraditional Learners. 
(Washington, D.C.: Center for American Progress and CAEL, 2010), http:/
/www.americanprogress.org/wp-content/uploads/issues/2010/10/pdf/
degree--completion--beyond--borders.pdf (accessed 3 July 2013).
    \ix\ Clifford Adelman, The Toolbox Revisited: Paths to Degree 
Completion from High School through College. (Washington, D.C.: U.S. 
Department of Education, 2006).
    \x\ See other examples in Amy Sherman, Becky Klein-Collins, and 
Iris Palmer, State Policy Approaches to Support Prior Learning 
Assessment: A Resource Guide for State Leaders. (Washington, D.C.: HCM 
Strategists and CAEL, 2012), http://www.cael.org/pdfs/College-
Productivity-Resource-Guide2012 (accessed 3 July 2013).
    \xi\ Carnevale, Smith and Strohl, Recovery: Job Growth and 
Education Requirements through 2020.
    \xii\ Rebecca Klein-Collins, ``Underserved Students Who Earn Credit 
Through Prior Learning Assessment (PLA) Have Higher Degree Completion 
Rates and Shorter Time-to-Degree,'' CAEL research brief. (Chicago: 
CAEL, April 2011), http://www.cael.org/pdfs/126--pla--research--brief--
1--underserved04-2011 (accessed 3 July 2013).
    \xiii\ Rebecca Klein-Collins, Fueling the Race to Postsecondary 
Success: A 48-Institution Study of Prior Learning Assessment and Adult 
Student Outcomes (Chicago: CAEL, 2010), http://www.cael.org/pdfs/PLA--
Fueling-the-Race (accessed 3 July 2013).
    \xiv\ Klein-Collins, Fueling the Race to Postsecondary Success: A 
48-Institution Study of Prior Learning Assessment and Adult Student 
Outcomes.
    \xv\ Morry Fiddler and Catherine Marienau, The Ten Standards for 
Assessing Learning, in Prior Learning Portfolios: A Representative 
Collection, eds. Denise M. Hart and Jerry H. Hickerson. (Chicago: CAEL, 
2009).
    \xvi\ Sherman, Klein-Collins, and Palmer, State Policy Approaches 
to Support Prior Learning Assessment: A Resource Guide for State 
Leaders.
             additional resources submitted for the record
    ``Underserved Students Who Earn Credit Through Prior Learning 
Assessment (PLA) Have Higher Degree Completion Rates and Shorter Time-
to-Degree,'' research brief, April 2011, accessed at the following 
Internet address:

  http://www.cael.org/pdfs/126_pla_research_brief_1_underserved04-2011

    ``Fueling the Race to Postsecondary Success: A 48-Institution Study 
of Prior Learning Assessment and Adult Student Outcomes,'' executive 
summary, February 2010, accessed at the following Internet address:

             http://www.cael.org/pdfs/PLA_Executive-Summary

    ``State Policy Approaches to Support Prior Learning Assessment,'' a 
resource guide for state leaders, 2012, accessed at the following 
Internet address:

    http://www.cael.org/pdfs/College-Productivity-Resource-Guide2012

                                 ______
                                 
    Chairman Kline. Thank you.
    Dr. Boughman, recognized.

STATEMENT OF DR. JOANN A. BOUGHMAN, SENIOR VICE CHANCELLOR FOR 
        ACADEMIC AFFAIRS, UNIVERSITY SYSTEM OF MARYLAND

    Ms. Boughman. Mr. Chairman and members of the committee, I 
am Dr. Joann Boughman, senior vice chancellor for academic 
affairs at the University System of Maryland. I thank you for 
the opportunity to share some information about how the USM and 
its 12 institutions are keeping college within reach for all of 
our citizens.
    Our public system includes research one institutions, 
comprehensives, HBCUs, and one totally online university, 
putting us in an enviable position to design and test many 
kinds of academic innovations. With the leadership of a very 
active board of regents and our vibrant Chancellor William 
``Brit'' Kirwan, USM has become a leader in many areas of 
academic transformation that will enable our very diverse 
student body of more than 55,000 to attain college degrees.
    Recent advances in technology impacting both online and 
classroom learning have demonstrated that active and 
interactive strategies improve the ability of students to 
succeed. Advances in cognitive sciences lead to better teaching 
as we understand how people learn. We must adapt an academy 
built on tradition to better teach and provide flexibility to 
today's population.
    The path to a secure personal economic future rests with 
educational attainment. Too many of our economically 
disadvantaged students are not obtaining higher education 
credentials.
    A child born in the low--highest quartile of income has a 
more than 85 percent chance of obtaining a child--college 
degree, while a child born in the lowest quartile has less than 
an 8 percent chance of earning a degree. The probability that 
that disadvantaged child will climb the educational ladder is 
lower in the United States than most other developed countries. 
This cannot continue if we are to succeed in a highly 
competitive global market.
    USM has been recognized by the Lumina Foundation for 
creating new models of lower-cost, high-quality approaches, 
substituted for traditional academic delivery. Our system is 
redesigning bottleneck courses and two-and 4-year institutions 
across the state. Redesign can shorten lecture time, 
incorporate individualized learning approaches, and provide 
students with ongoing feedback. Our experience has shown that 
such efforts help address problems such as inconsistent 
preparation amongst students that are coming to college.
    Thus far, we have supported the redesign of about 70 
courses with more than 20,000 students having taken those 
courses. The early results in our comparisons are promising, 
showing a cost savings of nearly 30 percent per course and an 
increase in student success. We have now launched a major 
longitudinal study to more broadly assess the impact and value 
of these courses.
    The USM is also investigating ways to incorporate MOOCs 
into our existing courses in degree pathways. While standalone 
MOOCs are increasingly prevalent, their audience is the global 
market and general public, and the manner in which credit might 
be given within a degree program is still unsure. Our challenge 
is determining whether or not MOOCs or portions of these MOOCs 
can be used to enhance the learning from a credit-bearing 
course in a degree pathway.
    We have also created a Center for Innovation and Excellence 
in Learning and Teaching, creating a culture of higher 
education innovation in Maryland. This work performed by the 
USM has led the state to providing $13 million in enhancements 
funds, most of those going to academic innovation processes on 
our campuses.
    Efficiency in higher education is a priority for our board 
of regents. Our time to degree has decreased from 4.8 years to 
a record low of 4.3 years across all 12 institutions.
    The systematic reengineering of our administrative and 
academic functions to reduce costs while enhancing quality has 
received significant international and national attention. 
Administratively, we have removed more than $350 million in 
direct costs and millions more in cost avoidance. These efforts 
are a part of our ability to keep costs lower for our students.
    Since 2008 our tuition has risen only 2 percent for full-
time, in-state students, compared to a national average of 27 
percent. Academically, U.S. enrollment, community college 
transfers, and degrees awarded are all at record highs while 
time to degree is decreasing.
    USM is also focused on the way we distribute financial aid. 
A commission found that we were disproportionately using our 
aid for merit. The board responded with a policy stipulating 
that low-income students should incur debt at a rate at least 
25 percent less than the average student debt. We reached that 
goal in 2012 and are pleased that we continue to focus on 
providing access and affordability as well as quality.
    In the higher education sector we take our responsibility 
of keeping college within reach very seriously and we continue 
to pursue a variety of innovations that will enhance student 
success while remaining firm in our conviction of access, 
inclusion, and quality. Those of us in leadership positions in 
higher ed must show both courage and adaptability to attain 
these goals while we work to keep the U.S. higher education 
system the best in the world.
    Thank you very much.
    [The statement of Ms. Boughman follows:]

 Prepared Statement of Dr. Joann Boughman, Senior Vice Chancellor for 
            Academic Affairs, University System of Maryland

    I am Joann Boughman, Senior Vice Chancellor for Academic Affairs at 
the University System of Maryland (USM). I am pleased to join you to 
share some information about the manner in which the USM and its 12 
institutions are meeting the challenges of keeping college within reach 
for all of our citizens. Our university system includes research I 
institutions, comprehensives, historically black universities, one 
totally on-line university, and a specialized research institute. As 
such, we are a microcosm of public higher education and in an enviable 
position to design and test many types of academic transformations and 
determine if focused policies can have an impact of controlling costs 
and improving college completion rates for multiple types of student 
populations.
    With the leadership of an active Board of Regents and our vibrant 
Chancellor William ``Brit'' Kirwan, USM has become a leader in many 
areas of academic transformation and creating flexibilities that will 
enhance the ability of our very diverse student population of more than 
155,000 attain degrees and enhance Maryland's and the country's ability 
to compete globally.
    There is a confluence of developments surrounding the higher 
education enterprise that make this point in our history a time when 
the country must step forward and invest to maintain a leadership 
position in global competitiveness.
    First, there has been a major focus on completion, with emphasis in 
the areas of science, technology, engineering and mathematics (STEM). 
President Obama, Maryland Governor Martin O'Malley, the National 
Governor's Association, the Gates Foundation, the Lumina Foundation and 
other leaders have clearly articulated the need for America to produce 
more well educated citizens, especially in areas of science and 
technology, if our country does not want to lose its leadership in the 
world economy.
    In addition, recent advances in technology--impacting both online 
learning and classroom instruction--have demonstrated that active and 
interactive learning improves the ability of students to learn and 
understand material in ways that will make integration of information 
much more effective.
    And advances in cognitive science are enlightening educators on 
better ways to teach even as we understand more about how people learn. 
We must adapt an academy built on tradition to better teach today's 
diverse population, and we must gain flexibility to include the ``non-
traditional'' student that is now the most common in our institutions. 
Our institutions must also be aware of--and open to--changes required 
to accommodate the needs of our workforce as well as better 
understanding what and how students expect to learn.
    As we navigate this new landscape, higher education is facing two 
quite sobering facts. First, the path to a secure economic future is 
based on attaining a higher education credential.
    Second, too many of our economically disadvantaged citizens are not 
attaining those credentials. A child born in the highest quartile of 
income has about an 85% chance of earning a college degree, while a 
child born into the lowest quartile of income has less than an 8% 
chance of earning a degree. To provide the opportunity needed to 
succeed, we must focus effort to change this trend for children from 
the lowest income brackets. The probability that such a child will 
climb the educational ladder is lower in the United States than in 
almost every other developed country. This cannot continue if we are to 
succeed in the highly competitive global market.
    USM was one of the original grantees in Lumina Foundation's 
``Making Opportunity Affordable'' initiative. USM built a partnership 
with the entire Maryland higher education community, including the 
Maryland Higher Education Commission (MHEC), the Maryland Association 
of Community Colleges (MACC), and the Maryland Independent College and 
University Association (MICUA) to think strategically about reducing 
the costs of higher education across the board while maintaining 
quality and increasing access. USM was recognized for developing best 
practices by the Lumina Foundation in the key area of creating new 
models: ``lower-cost, high-quality approaches substituted for 
traditional academic delivery wherever possible to increase capacity 
for serving students.'' \1\
---------------------------------------------------------------------------
    \1\ Lumina, ``Four Steps to Finishing First.''
---------------------------------------------------------------------------
    With support from both the Lumina Foundation and Complete College 
America, USM is providing leadership to the state in redesigning 
``bottleneck'' undergraduate courses (e.g., general education and 
developmental courses in which a large majority of students fail to 
earn a C or better) at two-year and four-year institutions across the 
state to improve student learning and to reduce the average cost per 
course. We can then reinvest cost savings to support additional 
redesign projects and other student completion-related priorities.
    Since so called ``gatekeeper'' courses (general education courses, 
developmental courses, and entry level courses--i.e., mathematics and 
sciences courses for a specific major) pose significant problems for 
many college students and halt their degree progression, we have 
focused on bringing course redesign efforts in these areas to scale 
statewide.
    Redesign efforts enhance and transform these gatekeeper courses by 
systematically incorporating individualized, active-learning approaches 
through technology-based exercises, and providing students with ongoing 
feedback to assess their progress. USM's previous experience with 
course redesign has shown that such efforts help to address persistent 
academic problems such as inconsistent preparation among incoming 
college students; poor student retention of material; low student 
engagement in lecture-based courses; and lack of coordination among 
faculty members across multiple course sections, leading to ``course 
drift'' and inconsistent student learning.
    Thus far, we have supported the redesign of almost 70 courses 
across the state, including enrollment of 12,000 students. Preliminary, 
early results indicate an effective and efficient approach. Initial 
evidence indicates no higher cost of delivery, decreases in cost in 
some courses, and an increase in student success. We are launching a 
major longitudinal study to more broadly assess impact and value.
    Course redesign was our first large-scale implementation of 
academic transformation principles, and our success in this work has 
led us to explore additional innovative practices and models. The USM 
is also working with Ithaka S+R, on a $1.4 million grant funded by the 
Gates Foundation, to investigate possible ways that some Massive Open 
Online Courses (MOOCs) provided by Coursera and the Open Learning 
Initiative might be incorporated into our existing university courses 
that are part of designed curricula leading to degrees at our 
institutions. While stand-alone MOOCs are becoming increasingly 
prevalent, the audience is the global general public and the manner in 
which credit might be given still remains to be studied. Our challenge 
is determining whether or not MOOCs, or portions of them, can be used 
to enhance the learning from a credit-bearing course in a degree path 
and help to make higher education degrees more attainable.
    To further advance our efforts, the USM has created a new Center 
for Innovation and Excellence in Learning and Teaching (CIELT) that 
will bring together faculty and administrative leaders from across our 
12 institutions to determine ways to improve the learning of students. 
We will assess trends and design projects to compare new ways to 
deliver courses with our current processes. By analyzing results and 
carefully collecting qualitative data on the process, challenges and 
resources required, we will be able to assess costs and determine ways 
to make the learning process more efficient and cost effective for the 
students, while using the knowledge, skills and talents of our faculty 
to their fullest. As a result of careful documentation of successes and 
problems, we will be developing information about best practices in our 
institutions.
    The focus on this work, combined with support from the state and 
leadership from the USM and our institutions, is creating a culture of 
innovation involving the USM, community colleges, and private and 
independent colleges and universities in Maryland. The work performed 
by the USM institutions thus far led to the state providing $13 million 
in enhancement funds. A major portion of that funding is going to 
additional investments in course redesign activities and the 
enhancement of academic innovation on the campuses.
    For decades, college instruction has been subject to the pressures 
of the ``Baumol Cost Disease'', as teaching a 3-credit course has taken 
the same amount of time in human resources through time. Now, we have 
the insight and new instructional technologies that create the real 
possibility of increasing learning productivity. But as soon as we use 
the term ``learning productivity,'' many who don't truly understand how 
people learn jump to models that work to enhance productivity in other 
sectors. Unfortunately, these cost/benefits models for ``productivity'' 
don't work in the education context. For example, simply broadcasting 
information to more people at less cost does not result in learning per 
se; if it did the Internet would have fixed everything!
    So, the real scalability opportunities in higher education will not 
rest simply with advances such as MOOCs, but rather with new 
technologies that enhance learner transactions with each other and the 
material under study and facilitate both the assessment of learning and 
adapt according to students' needs. Those technological advances are 
the ones that are more directly tied to advances in brain science, not 
MOOCs * * * and they suggest a positive future for improving learning 
transactions that will increasingly make us ``productive together'' as 
members of broad learning communities.
    We envision environments in which learners have equitable access to 
truly differentiated instruction that provides them with myriad ways to 
acquire content, construct knowledge, and represent their 
understandings of the larger instructional conversation. These learning 
environments will be inclusive both in terms of providing equitable 
access as well as in terms of proactively making all learners feel like 
they belong as important contributors to the discussion (there is a 
significant affective component here that has been recently emerging 
from the brain science as well). Learners will be engaged in 
collaborative, project-oriented tasks that will expose them to multiple 
perspectives and ways of thinking. Our definition of ``learning 
success'' will shift away from our current paradigm to one that seeks 
to maximize students' learning and help them achieve everything for 
which they are capable. Education will become an intrinsically 
motivating, self-actualizing experience for all learners, not just 
``the honors students.''
    As this field of academic innovation is moving extremely rapidly, 
we must have some patience to permit the design of comparative studies 
and analysis of data that will demonstrate the best practices that will 
make significant differences in student success and improvement in 
efficiency and cost reduction.
    State leaders in Maryland are committed to making college 
accessible and affordable, and providing every opportunity for students 
to succeed. Governor Martin O'Malley has clearly stated his goal that 
55% of the adult Maryland population have a postsecondary degree by the 
year 2025. While we in Maryland have one of the highest proportions of 
adults with postsecondary degrees, we have much work ahead of us! This 
year, the Maryland legislature passed a comprehensive College Readiness 
and Completion Act that includes requirements for math in high school, 
high school and college dual enrollment strategies, and transfer 
capabilities among our community colleges and 4-year public 
institutions. The statute also requires that 30 hours of general 
education credit and 60 hours of credit from community colleges be 
accepted by the 4-year institutions. Also required are degree plans and 
the development of clear pathways for 2- and 4-year degrees, as well as 
a limit on the number of credits required for a bachelor's degree. All 
of these actions help focus the educational pathway, permitting 
students to earn a degree more efficiently.
    The quality and efficiency of higher education is a priority for 
our Board of Regents. We are especially focused on enhancing that 
efficiency, including the careful design and implementation of remedial 
courses and improvement of success in introductory credit-bearing 
courses, especially in math where many of our students have challenges. 
By reducing the rates at which students drop, fail, or withdraw from 
these first basic courses and ensuring fuller understanding of the 
concepts and therefore higher success in subsequent courses, we can 
reduce the time to degree significantly. In fact, over the last four 
years our time to degree has decreased from 4.8 years to record low of 
4.3 years.
    As you may have heard, the USM's Effectiveness and Efficiency (E&E) 
Initiative--the systematic reengineering of our administrative AND 
academic functions to reduce costs while enhancing quality--has 
received significant national attention and praise.
    Administratively, we have removed more than $350 million in direct 
costs and saved millions more in cost avoidance. Academically, USM 
enrollment, community college transfers, and degrees awarded are all at 
record levels, while time-to-degree is near an all-time low. This focus 
on the academic side of E&E includes the careful design and 
implementation of remedial courses and enhancement of success in first 
credit-bearing courses, especially in math where many of our students 
have challenges. We believe these efforts are a part of our ability to 
keep costs lower for our students. We have also been able to control 
tuition rates. Since 2008, our tuition has risen only 2% for full-time, 
in-state students compared to a national average of 27%.
    Along with our E&E efforts, the USM is focused on the way we 
distribute financial aid. Several years ago, our Chancellor appointed a 
commission to study financial aid and found that we were 
disproportionately using our available aid on merit rather than need-
based cases. As a result of the study, the Board passed a policy 
stipulating that low-income students, defined as Pell eligible, should 
incur debt at a rate at least 25% less than the average student debt. 
We reached that goal in 2012, and are pleased that we continue to focus 
on providing access and affordability to the students who are most 
challenged financially, many of whom are first-generation college 
students.
    In the higher education sector, we take our responsibility of 
``keeping college within reach'' very seriously, and we will continue 
to pursue a variety of innovations that will enhance student success. 
We need to remain firm in our convictions of access, inclusion, and 
quality. Those of us in leadership positions in higher education much 
show both courage and adaptability to attain these goals. Across the 
nation we ALL must dedicate ourselves to improved student outcomes and 
greater educational success to keep America's leadership position 
economically.
    Thank you.
                                 ______
                                 
    Chairman Kline. Thank you.
    Mr. Smith, you are recognized for 5 minutes.

   STATEMENT OF BURCK SMITH, CEO AND FOUNDER, STRAIGHTERLINE

    Mr. Smith. Thank you, Chairman Kline and members of the 
committee, for the opportunity to testify. My name is Burck 
Smith and I am the CEO and founder of StraighterLine.
    StraighterLine is an answer to a question that has haunted 
me since the mid-1990s when I was getting a master's degree in 
public policy. Despite massive investments in technology over 
the past decade, higher education prices have risen and quality 
has arguably fallen.
    In every other industry when you have these technology 
investments the opposite happens--ultimately, prices go down, 
quality goes up. What is it about higher education that bucks 
that trend?
    My conclusion was and is that the regulatory structure that 
we have now was not built to accommodate the realities of the 
online learning market. So StraighterLine offers ultra-
affordable general education courses directly to students. We 
offer the things that everyone takes: econ 101, accounting 101, 
psych 101, et cetera. We have about 50 courses.
    We charge $99 per month, like a subscription, and then 
students can buy courses for $49 or $59, but roughly $49 per 
course started. We also have a model which is $1,300 for a 
freshman year of courses. All of these are unsubsidized.
    We expect to enroll about 20,000 students in the upcoming 
year and are growing rapidly but we are not allowed to be 
accredited. Instead, we have articulation agreements with about 
40 regionally accredited colleges, including Western Governors, 
University of Maryland University College, such that our 
students are guaranteed credit when they transfer from us to 
those colleges.
    All of our courses have been reviewed and recommended by 
the American Council on Education's Credit Recommendation 
Service, among others. Over 90 percent of our students are 
still enrolled after transferring to our--their destination 
college after the first year. We have a wonderful case study 
with Western Governors that shows these persistence effects.
    Despite being unaccredited and unsubsidized, we can offer 
equivalent online courses at substantially lower prices because 
we do not use the profits from online courses to subsidize the 
rest of the enterprise. To give you a sense of how much cheaper 
online course delivery can be than face-to-face delivery, 
consider what it might cost to deliver a psychology 101 course.
    The content and the course management systems are 
effectively cheap or very--free or very cheap; the average wage 
for an adjunct professor is under $3,000. For 30 students that 
is about $100 per student per course. You are hard-pressed to 
get about--higher than about $200 per course when you are 
delivering it online.
    However, to avoid students migrating from high-priced face-
to-face courses to low-priced online courses, 93 percent of 
colleges price online courses the same or higher than face-to-
face courses. When tuition, fees, and subsidies are added 
together, colleges get between $1,000 and $3,000 for this $200 
course.
    So this means the colleges, no matter their tax status, are 
profiting from online courses and these profits subsidize the 
rest of the enterprise. In most markets such margins would be 
diminished as new competition entered the market. However, in 
higher education, accreditation and the subsidies to which it 
is tied make that very difficult.
    By my what I think are conservative calculations, higher 
education receives about $200 billion in taxpayer subsidies per 
year. These subsidies are very diverse. They come from 
subsidies to students through financial aid, through 529 plans, 
through tax credits that go to colleges, through state funds, 
through Department of Labor grants, nonprofit tax status.
    An enormous array of subsidies flow to higher education. To 
access any of it, colleges must be accredited. To be 
accredited, a college must offer a full degree program. So 
individual course providers like StraighterLine are not allowed 
to be accredited.
    Further, colleges are evaluated on their inputs rather than 
their outcomes so their cost structures must look more or less 
the same. The colleges have complete authority to accept or 
deny other people's credits, so those with whom they feel 
threatened, they do not have to accept credits from other 
providers.
    And lastly, accreditation is staffed and financed by 
colleges themselves so there is little incentive to change the 
model.
    And to put it more sharply, if a course provider like 
StraighterLine developed the world's greatest calculus course, 
a student could not access any subsidies to take our course. If 
they did it anyway they would have to convince the college 
where they are going to accept that course for credit and the 
college has a disincentive to do us because it wants students 
to take its course at its prices.
    When I was starting StraighterLine a frequent question was, 
``Well, why will colleges do this at all? Why will they award 
credit from other providers like StraighterLine or the MOOCs or 
others?'' And the answer is that the economics of higher 
education are getting to the point where many colleges are 
being forced to do so.
    Tuition continues to rise fastest among public colleges 
because they have state disinvestment in addition to structural 
inflation. Sources of student support are falling perhaps for 
the first time in the last 50 years, and so whether that is 
Pell Grant eligibility tightening or whether that is state 
support that has been reduced or lower family assets, students 
no longer have the same support to pay a higher tuition so they 
are willing to look outside of accreditation to lower the 
overall cost of college.
    All this is happening in a context where there are now 
thousands of online providers as opposed to one or two. So 
colleges that want to attract online students, particularly--
and adult students, are very interested in creating these low-
cost pathways, through StraighterLine or PLA or others, and 
they have to do so because if they don't those students are 
going to go to a college that will.
    So StraighterLine started in 2008. It was a division of my 
first company; we became our own company in 2010.
    Well before the MOOC mania we identified what I think are 
the two key questions in this disruption debate. One is that 
online courses should be much cheaper than face-to-face 
courses, and that second, you don't have to be a college to 
offer an online college course. If you offer something that is 
equivalent to the same standards, the treatment should be the 
same.
    So what can be done? There are a wide range of small and 
large policy changes. I will cover a few.
    One is allow accreditation at the course level rather 
than----
    Chairman Kline. Mr. Smith, your time has expired but since 
I am going to be the first person to ask questions I will ask 
you to continue on my time.
    Mr. Smith. It will be quick--allow accreditation at the 
course rather than the degree level, create common course 
transfer standards such that all can be articulated equally, 
consolidate all subsidies into a single account. I recognize 
this is more controversial and radical but we have such a 
diverse array of subsidies to higher ed it is hard to 
manipulate them and control them in a way that affects the 
market in logical ways.
    With that, I will stop and open up to more questions.
    [The statement of Mr. Smith follows:]

          Prepared Statement of Burck Smith, CEO and Founder,
                          StraighterLine, Inc.

    Good morning. My name is Burck Smith, and I am the CEO and founder 
of StraighterLine. StraighterLine is an answer to a question that has 
haunted me since the mid-90's when I was getting a Masters degree in 
public policy:
    ``Despite massive investments in technology, higher education 
prices are rising and quality is declining. In every other industry, 
technology investments yield cost savings which translate to lower 
prices and higher quality--productivity increases. Why not in higher 
education?''
    My conclusion was, and is, that the problem is an outdated 
regulatory structure.
    StraighterLine offers ultra-affordable online general education 
college courses directly to students. The courses we offer are the ones 
that everyone takes in their freshman and sophomore years like 
Psychology 101, Accounting 101 or Precalculus. These general education 
courses represent about \1/3\ of all course enrollments in higher 
education. We charge $99 per month and, after subscribing, students pay 
about $49 per course started. We also have a freshman year option for 
$1300--all without any taxpayer subsidies. By pricing on a subscription 
basis, students have an incentive to complete the course and, if a 
student doesn't complete, the financial harm to the student is low. We 
expect to enroll about 20,000 students in the upcoming academic year 
and are growing rapidly, but we are not allowed to be accredited. 
Instead, we have articulation agreements with about 40 public, private 
and for-profit regionally accredited colleges such that our students 
are guaranteed credit when they transfer to one of those colleges.
    All of our courses have been reviewed and recommended by the 
American Council on Education's Credit Recommendation Service as well 
as other third party reviewers like the College Board and the Distance 
Education and Training Council (DETC), a Department of Education 
recognized national accreditor. About 65% of courses started are 
successfully completed. Over 90% of our students are still enrolled at 
a partner college after the first year. We have a case study with 
Western Governor's University describing these persistence effects.
    Despite being unaccredited and unsubsidized, StraighterLine can 
offer equivalent online courses at substantially lower prices because 
we do not subsidize other parts of the enterprise with profits 
generated from online and general education courses. Our courses are 
priced much closer to the true cost of online delivery than those of 
most accredited colleges. To give you a sense of how much cheaper 
online course delivery is than face to face delivery, consider what it 
costs to deliver an online Psychology 101 course to 30 students. The 
course content and management software are free or very cheap. The 
average per-course wage for an adjunct professor is under $3,000. So, 
the professor's labor is about $100 per student. Add additional 
expenses for proctoring and management, and one is hard pressed to get 
beyond about $200 per student per course. However, to avoid students 
migrating from high priced face to face courses to low-priced online 
courses, 93% of colleges price their online courses the same or higher 
than their face to face courses. When tuition, fees and subsidies are 
added together, colleges receive $1,000--$3,000 per course. So this 
means that colleges--no matter their tax status--are profiting from 
online courses. These profits are used to subsidize other parts of a 
college's budget.
    This substantial profit margin explains a number of recent trends 
in higher education. First, the for-profit sector was the first to 
realize the profitability of driving down the cost of delivery while 
keeping prices the same. More recently, public and non-profit colleges 
have turned to ``outsourcing'' companies that will quickly stand-up an 
online program for a college in exchange for 50% to 80% of the revenue 
from that program. In effect, colleges, rather than students, are 
capturing the productivity and cost-saving benefits of online course 
delivery.
    In most markets, such profit margins would decline over time as new 
competitors entered the market. However, in higher education, 
accreditation, and the public subsidies to which it is tied, make it 
difficult for course-level competition to emerge. By my conservative 
calculations, accredited colleges receive well over $200 billion of 
taxpayer subsidies per year. These subsidies directly and indirectly 
support students through Pell grants, subsidized loans, 529 plans, tax 
credits, and colleges through state grants to public colleges, 
Department of Labor grant programs and non-profit tax status. To 
receive any of these subsidies, a college must be accredited. To be 
accredited, a provider must offer full degrees, not individual courses. 
Providers are judged on their inputs--like faculty credentials and 
departments--rather than their outcomes. Colleges have complete control 
over their credit recognition policies. Finally, accreditors are 
staffed and financed by colleges themselves. This means that it is 
difficult to ``disaggregate'' the college experience because the 
college must be a degree ``bundle,'' that colleges must have similar 
cost structures because their inputs must be similar, that they can 
deny credit from providers that are threatening and that there is 
little incentive to change the model.
    To put it more sharply, if a course provider like StraighterLine 
develops the world's best online calculus course, a student could not 
access any taxpayer subsidies to take that course. If the student took 
the course anyway, he or she must convince the college they attend to 
award credit for the course. The college has a disincentive to do so 
because it wants the student to take its courses at its prices. The 
disincentive to ``unbundle'' is the same disincentive faced by record 
companies as per-song downloads replaced the 10 song album or the cable 
industry when faced with single channel, rather than package, 
purchases. The disincentive to award credit for other people's courses 
is the same disincentive that hardware and software providers have when 
allowing compatibility with their products. If you lose your charger 
for your iPhone, you need to pay extra for a compatible Apple charger 
because they own the interface standard.
    When I was starting StraighterLine, a frequent question was ``why 
will colleges start to recognize credit from lower cost providers?'' 
The answer is that the economics of higher education are gradually 
forcing them to do so. First, tuition continues to rise, and is rising 
fastest among the public colleges due to structural inflation combined 
with state disinvestment. Second, for the first time since 
accreditation was tied to financial aid, sources of student support are 
not keeping up with tuition growth. Pell grant eligibility has been 
tightened. States have cut their scholarship programs. Median family 
assets are 40% less than what they were in 2007. With higher prices and 
fewer sources of support, students are willing to look outside of 
accreditation--essentially foregoing their subsidies--to find a lower 
priced pathway to college. Lastly, with courses moving online, students 
can choose from hundreds of online colleges rather than a couple of 
regionally defined providers, and this doesn't include the new 
unaccredited providers! While many colleges can and do resist creating 
low-cost degree pathways, those colleges that compete for adult 
students--particularly online students--must create low-cost pathways 
to degrees. If they do not, students will choose the colleges that do. 
Accordingly it is these schools that are the early adopters of low-cost 
pathways to colleges, not the ``elite'' colleges who have more demand 
than they are willing to accommodate.
    StraighterLine started in 2008 as a division of my previous 
company--a provider of online tutoring for colleges called 
SMARTHINKING--and became its own company in 2010. Well before the MOOC-
mania, StraighterLine identified the two themes that underlie today's 
higher education debates. First, online courses from all providers--
for-profit, non-profit, public--should be much cheaper than face to 
face courses. Second, you don't need to be a college to offer a college 
course online. If a provider can meet the standards for a college 
course, shouldn't that provider be able to offer it under the same 
conditions as a college? In 2008, this was heresy. Today, it seems 
inevitable. Though MOOCs have captured the imagination of the media, I 
prefer the equally inelegant term MCPM--Marginal Cost Pricing Model--
because that is the defining feature of disruption. The irony is that 
it is forced to happen outside of the state sanctioned accreditation 
and subsidization structure.
    What can be done? There are a wide range of both small and large 
policy changes that could enable greater competition and lower prices. 
Here are some possibilities:
     Allow accreditation at the course, rather than the degree 
level--This could include access to all, some or none of the subsidy 
streams currently enjoyed by accredited colleges. At a minimum, it 
would confer the same acknowledgement of quality as enjoyed by 
colleges. At a maximum, it would level the economic playing field for 
all providers.
     Create common course transfer standards--All providers, 
accredited and unaccredited, would be able to include their courses in 
such a structure. Another way to promote this would be to require any 
provider who wants their courses to transfer to others to accept 
transfer from others. This is similar to a ``GED,'' but for commonly 
taken college courses.
     Consolidate All Subsidies into a Lifelong Learning Account 
Controlled by the Student--While more radical than other proposals, 
this is the most logical given the changes in the higher education 
market. The structure of the account could be adjusted to meet socially 
desirable goals like greater amounts for students from low socio-
economic backgrounds, diminished availability over time, 
transferability to family, and more.
    Over \2/3\ of colleges already offer online courses for credit and 
over \1/3\ of students have taken one. Yet, higher education has been 
largely insulated from the disruptions felt in other industries. 
Further, the productivity benefits that technology is supposed to bring 
to consumers and taxpayers are largely absent. Though we have had 
significant investment and use of new technologies, the basic business 
model of higher education is propped up by taxpayer subsidies and 
protected by accreditation. Without changes in the way subsidies are 
delivered and to whom--clearly politically sensitive--we will continue 
to lament the rise of college costs and debate the role of technology.
                           about burck smith
    Burck is the CEO and founder of StraighterLine. Prior to launching 
StraighterLine in 2009, he co-founded SMARTHINKING, the largest online 
tutoring provider for schools and colleges in 1999. Burck has written 
chapters for three books on education policy for the American 
Enterprise Institute (AEI).He is a member of the American Enterprise 
Institute's Higher Education Working Group. As a writer about education 
and technology issues, Burck has been published by Wired Magazine, 
Wired News, Converge Magazine, University Business and the National 
School Boards Association. In the early 1990's, he wrote articles on a 
variety of subjects including creating community telecommunication 
networks, electronic access to political information, 
telecommunications deregulation and the ability of utilities to serve 
as telecommunications service providers. Burck holds a Master's Degree 
in Public Policy from Harvard University's John F. Kennedy School of 
Government and a B.A. from Williams College. Recent publications 
include:

Post-secondary, Post ``Access''--Prepared for the American Enterprise 
        Institute Conference, ``Stretching the Higher Education 
        Dollar,'' August 2, 2012. Forthcoming from Harvard Educational 
        Press, Summer 2013.
Higher Ed Reform, from the Chapter ``Rethinking Accreditation,'' 
        College 2.0, an Entrepreneurial Approach to Reforming Higher 
        Ed, Kauffman Foundation, June 2012
Public Policy Barriers to Post-Secondary Cost Control--Prepared for the 
        American Enterprise Institute (AEI) conference, ``Increasing 
        Accountability in American Higher Education,'' November 17, 
        2009. Published in Accountability in American Higher Education, 
        Palgrave Macmillan, 2010.
Price Competition and Course-Level Choice in K-12 Education: Lessons 
        from Higher Ed--Prepared for the American Enterprise Institute 
        Conference, ``More Than Just Schools: Rethinking the Demand for 
        Educational Entrepreneurship,'' December 7, 2009. Published by 
        Harvard Education Press in ``Customized Schooling; Beyond Whole 
        School Reform,'' 2011.
                                 ______
                                 
    Chairman Kline. Thank you very much. I want to keep going 
with you because you are on a roll here.
    Despite the disincentives that you were talking about 
earlier that institutions have to offer these low-cost online 
courses, you have partnered with over 40 institutions and I 
think your explanation was they see that if they don't there is 
going to be competition elsewhere. I think that was right.
    So why don't other institutions see the benefits of 
collaborating with you?
    Mr. Smith. Well, I think it is happening over time. It is a 
slow process.
    And I want to point out that the institutions with whom we 
are working tend to be the most innovative ones in the field, 
so UMUC, Western Governors, and that is the reason they are 
here testifying. They have a commitment to low-cost pathways. 
They have a history and a legacy of creating these pathways.
    We are seeing more over time looking at this as they try to 
attract more adult learners. We have seen a surprising number 
of small, private colleges starting to work with us.
    It is something that colleges have to try and come to terms 
with because on the one hand they are worried that students 
will migrate to low-cost courses; on the other, they want to 
create this access pathway and be able to compete for these 
students.
    There is no easy answer but it will happen over time, I 
believe. The economics is going to point it that way.
    Chairman Kline. Okay, let me pick--thank you. Let me pick 
up again.
    You indicated that even though--I think I have got this 
right--even though you have got this partnership with, in fact, 
two of the institutions here, and it is costing a couple 
hundred dollars a course, that often institutions are charging 
as though it were a brick and mortar, on campus. So, I mean, 
one of the things I thought would be happening is that 
universities, whether they are large public universities or 
small, private, or whatever, would be looking for ways to lower 
their costs, and I think Dr. Boughman talked about a 30 percent 
lower cost for an online course.
    But if you are trying to lower costs it looks like they are 
maybe missing an opportunity here or they are just using you as 
a cash cow, I am not sure what----
    Mr. Smith. There is a difference between cost and price, so 
colleges can lower costs. Course redesign, as Dr. Boughman 
said, is a fabulous program, and Carol Twigg, who runs it, has 
been known for a long time as an innovator, but if you start to 
look at what the effects of those cost reductions would be on 
the price reductions, it is actually fairly minimal.
    So if you save 30 percent on a course that costs $150 to 
deliver and that is only 5 percent of the courses across the 
campus, the total savings on price becomes very small. So 
prices don't shift as cost savings are created in higher 
education.
    So if you look at it from a technology or a productivity 
perspective, in other industries when new technologies come 
into--are employed, competition ultimately pushes those 
benefits to the end user, the consumer. What I think is 
happening in education is those cost savings are being captured 
by colleges because costs are being reduced for online but 
prices are not.
    Chairman Kline. Got it. Thank you.
    Mr. Jenkins, thank you very much for the work that you are 
doing and for your testimony here. The credit hour 
regulation;--you--in your testimony you said that it was 
particularly obstructive to innovation in higher education, and 
you did address it in your testimony but I would appreciate it 
if you would take the minute that I have left and talk about 
the benefits you and your students would see if that regulation 
were repealed.
    Mr. Jenkins. So we know two things about adult learners who 
come to higher education. They come to higher education knowing 
different things and they learn at different rates.
    And at WGU our model allows students to move at their own 
pace through that--through the process. Students are enrolled 
full time at the institution for 6-month terms and for 12 to 14 
what we call competency units. We have had to equate those to 
credit hours for purposes of regulations and rules to fit into 
that scheme.
    The ability at our institution for a student who may be 
able to move rapidly through their degree program, they can 
accelerate how many courses they take. So they may take 18 to 
24, be able to pass through those courses, as opposed to a 
credit hour regulation that would require you to take 12 to 15 
credit hours and if you finish your coursework 2 months into 
the semester you basically sit on your hands for the rest of 
the semester until time ends.
    Chairman Kline. Thank you.
    Mr. Miller?
    Mr. Miller. Thank you. Thank you, Mr. Chairman.
    Before I begin my question I, again, Mr. Chairman, would 
like to beseech you to discuss among your members whether or 
not we can have the hearing and report out legislation to keep 
the rates low for the coming year so we can work on many of 
these issues here and the student loan program so that we will 
not be doubling the rates, as is currently under the situation. 
This affects some 500,000 students in California and about 
194,000 students in your state, and I would hope that we could 
work out a bipartisan bill.
    We have seen in all of the machinations between the House 
and the Senate a common core that could lead to that 
legislation a more permanent fix, and so I would hope that we 
could do that.
    Thank you for assembling this panel of witnesses. This is 
sort of the core of the question of how do we make it more 
affordable and how do we deal with cost.
    I would like to start just for a second on the credit hour, 
but I just want to say, our problem is, you know, we legislate 
for the nation, and just as we see across the higher education, 
we--there are a lot of flimflam artists out there and they are 
taking federal subsidies, they are taking federal money. People 
are going into debt and the courses they are taking aren't 
worth spit to an employer or to another college in terms of 
transferability or acceptance of those. And we have to sort 
that out.
    I am a big fan of everything you are talking about doing 
here and I see seat time, credit hour, all of that is sort of 
standing in the way. But you also have to be prepared to accept 
there has to be some ability to separate the wheat from the 
chaff here because it is really expensive to students to go 
into debt and not get an education. That is real expensive.
    And so how we do that I think is a challenge here and I 
don't come necessarily with preconceived notions, but on the 
question of prior learning and your low-cost, as you say, 
history 101, economics 101 courses, how does that merge sort of 
when you get to the University of Maryland, because you have 
sort of two different institutions looking at this and you have 
students who are coming there probably for the most part with 
the traditional mindset, and that there is this array of 
offerings here that turn out to be really important to them but 
they haven't been told about them or thought about them as they 
graduate from high school or come to college later in life.
    Ms. Boughman. Well, Mr. Miller, you have touched on one of 
the things and that is preparation of the students not only 
with content but with understanding of the process of higher 
education. In our universities, equivalency of courses is the 
essence of transferability into and credit for a course in a 
curriculum that leads to a degree, and that is where one of the 
differences is in some of the institutions that are simply 
giving courses versus a series of courses that leads to a 
degree.
    And the 30 percent number, Mr. Chairman, that I pointed out 
is not just for online courses. This is a 30 percent cost 
reduction in courses in some of these innovative processes, 
some of it based on prior learning assessment, as well, that 
leads to success in that course and subsequent success in other 
courses so that the cost comes down both for students and the 
institution because the professors aren't teaching the same 
student twice. They aren't withdrawing because they are too 
challenged; they aren't getting an unsavory mark or grade in 
their course.
    Mr. Miller. Let me just ask Dr. Tate, how do you then 
design that prior learning assessment? You have somebody coming 
out of the military. Let's say they are in the warehouse. They 
are doing logistics for the military; they are moving 
equipment. How do you design that assessment so that that then 
shifts into the pursuits that the student wants to do when they 
return to the university?
    Ms. Tate. Mr. Miller, CAEL does share this concern about 
protecting against fraud or abuse or the flimflam artists that 
you discussed, and there are some abuses in postsecondary 
education generally, not just in these innovation areas. And so 
I think there are various ways that we can help to reduce or at 
least mitigate the issue of abuse.
    One is, I think, first of all, having really clear, visible 
standards for the assessment of that learning. That is number 
one. We published a quality assurance standards guide for 
colleges and universities about accepting such credits from 
other entities or through prior learning assessment, and a lot 
of institutions use those now.
    And I would say, in fact, just an aside here, in fact, we 
are in the early stages of exploring just such a group of 
possible models for mitigating fraud or abuse with the Veterans 
Administration, since you mentioned the military.
    Mr. Miller. Mr. Smith, do you have to do the same in terms 
of--how do you--what did you--assurances did you have to make 
to convince the University of Maryland and Western Governors 
that they should be accepting your courses?
    Mr. Smith. So we did a number of things. First, our 
challenge was, when we started, there was no way to--that an 
unaccredited provider could show validity of their courses, so 
we looked to the ACE Credit Recommendation Service 4 or 5 years 
ago, and I think we are one of the first to--I mean, they have 
been around since the 1970s, I believe, but one of the first to 
use it for general education courses because we needed 
something to give us third party validity. So we had all our 
courses reviewed by them and recommended.
    We have added other kind of good housekeeping seals of 
approval. We have had the College Board review our courses for 
A.P. applicability for some of them. We have had the Distance 
Education and Training Council, which is a DOE-recognized 
national accreditor, look at our courses.
    And then on top of that, we are extremely transparent. So 
UMUC, Western Governors, all of our partner colleges have 
complete authority to go look at our courses, slice, dice, do 
whatever they want to with them.
    And on top of all of that, they can now track what our 
students are doing and where they are going and how they 
persist.
    So there is a lot--we have had, I would say, many ways we 
have had more course level review than most colleges, and this 
is an interesting point in that accreditors don't look at 
courses. So despite all the courses that are being transferred 
among colleges, and a third of all students transfer--that is a 
3-year-old number; it is probably higher now--does not include 
all the other sources of credit that come from high schools, or 
PLA, or the military, or elsewhere, courses are never looked 
at.
    So the----
    Chairman Kline. Sorry, but again the gentleman's time has 
expired.
    Mr. Petri?
    Mr. Petri. Thank you very much, Mr. Chairman, for 
conducting this very important hearing.
    And thank the witnesses for their contribution.
    I have a question really that I would hope each of you 
could respond to, and with the 5-minute rule I am not sure 
there will be time to accomplish that very effectively, but if 
you could consider submitting a written response in addition it 
would be very much appreciated.
    You touched on it in--the answer to my question, in your 
testimony but I just wanted to focus in on it. We have seen 
technology transforming almost every industry in the United 
States and transforming our world, and it is moving forward in 
the education community but it is moving forward, or has in the 
past moved forward more slowly in the world of education, 
particularly higher education, than in a lot of other 
industries.
    And so what I am--my question is, what do you see as the 
largest barriers to the deployment of innovation and new 
technology in the field of education? And I don't mind if you 
point at us, but--because maybe we will change a few things. 
Could you respond in a minute or 2 each?
    Mr. Jenkins. Here is the thing: I think there are issues 
around culture and there are issues around governmental 
regulation and accreditation issues that impair the ability of 
technology to be deployed in institutions, but I also think 
that institutions in a lot of ways WGU was created to use 
technology in order to deliver a high-quality, affordable 
education that is fundamentally different.
    Our faculty role at WGU is fundamentally different than at 
a traditional institution, where we--if you enroll at WGU you 
are teamed up with an individual mentor who has experience in 
the field and they help facilitate your learning through the 
entire course of study. If you hit a roadblock then you're 
triaged to a course mentor who is a subject matter expert and 
they work one-on-one with you to help you get through that 
process. You notice in all of that I don't have a faculty 
member standing in front of a lecture hall or a taped lecture 
from a faculty member.
    And then we assure the student has earned the competency 
and has mastery of the competency because we then have a third 
party that reviews their assessments and their performance 
assessments and it helps to make sure that students move 
through. And technology enables all of that process, which is 
very difficult sometimes in a traditional institution.
    Ms. Tate. You know, I would add to that that in our 
experience, some of the biggest barriers that institutions have 
to the deployment of technology are A, they don't have the 
technology resources and they don't have the infrastructure in 
place to really understand how to implement online learning or 
online services. So for example, just take prior learning 
assessment itself. Most colleges that do do this still do it in 
the kind of face-to-face, labor intensive way that they have 
done it in the past, as they do teaching and learning in 
general.
    To introduce online solutions that require technology 
took--and we have made that investment with Foundation HELP--it 
took enormous resources to convert a process to an online, 
high-quality process. And I think the same is true for online 
learning or online services. They take a lot of thought; they 
take design.
    It is something that really is an investment by the 
institution. And many of them don't have the know-how or the 
resources to do it, and so what is happening is all--many, many 
private vendors who do have that knowledge and expertise are 
coming to the table to try to assist higher education in making 
this change.
    Ms. Boughman. Mr. Petri, I would suggest that technology in 
higher education goes far beyond simply moving certain courses 
to online delivery. And in fact, higher education courses are 
incorporating technology in many, many ways in many of the 
sciences using modeling, for example, in the engineering 
sciences or even in the biological and biochemical sciences--
molecular modeling, for example.
    But I would also suggest that barriers are not the only 
reason that technology has not been fully embraced. Tradition 
can be a good thing as well as sometimes a hindrance, and there 
are many people who, in fact, see small classroom interaction, 
professor-driven conversation as a very important part of the 
learning process. And we also have to remember that we are 
talking about very diverse populations here. I envy, in fact, 
some of the organizations that have 37-year-old, mature 
students as their key student when, in fact, most of our 
students in the ages of 18 to 25 or so are not nearly so mature 
to be able to guide their own learning process.
    Chairman Kline. Gentleman's time has expired.
    Mr. Andrews?
    Mr. Andrews. Thank you, Mr. Chairman.
    Thousands of American families are trying to re-up their 
student loans for the new academic year and finding out, to 
their horror that the rates have doubled. It is going to cost 
them thousands of dollars more.
    A bill that Mr. Courtney introduced on April 17th that 
would put off that rate increase for 2 years, would not add a 
penny to the deficit. We can get a vote on that bill if three 
more members of this committee sign a petition calling for a 
vote on that bill.
    The petition, which is depicted to my right, has the 
signature of every Democratic member of the committee. I would 
implore my friends on the Republican side to consider signing 
this petition. If three of them do we can take a vote on this 
bill.
    Mr. Smith, you can sign the petition, too, if you would 
like, Mr. Smith, but the--I notice in your testimony you say 
that you are not allowed to be accredited. I think I know the 
reason for that but why is that? Why can't you get accredited?
    Mr. Smith. So first, I am not going to sign the petition.
    Mr. Andrews. Okay.
    Mr. Smith. I will let you all navigate that yourselves. 
But----
    Mr. Andrews. Your time is up, Mr. Smith. [Laughter.]
    To be accredited you must offer a degree. You must offer a 
full degree, and usually multiple degrees. So we are not 
offering degrees, we are just offering courses.
    And so the disconnect for me is that you see courses being 
offered and credit is fungible for----
    Mr. Andrews. Your argument, which I think is pretty 
compelling, is that there is a sort of de facto accreditation 
that goes on because the schools with whom you have 
articulation agreements would not accept the courses if it 
didn't meet their standards and they are accredited, right? Is 
that essentially our argument?
    Mr. Smith. Yes. That is the pathway we have created for 
credit.
    Mr. Andrews. Do you think that the accreditation process 
should be broadened to include accreditation of those who do 
not offer degrees but offer courses instead? You think that 
would be a good thing or a bad thing?
    Mr. Smith. I think it would be a good thing. I think you 
are already seeing the accredited providers offering courses 
that are fungible and transferable among others but you have 
not seen the course level price competition that should come 
about, so----
    Mr. Andrews. And so your position would be that such an 
accreditation expansion would induce more competition among 
providers and therefore lower costs and hopefully improve 
quality, as well. Is that fair to say?
    Mr. Smith. Correct.
    Mr. Andrews. Yes.
    What do you think the elements of such a course 
accreditation would include? What would be a fair way to do 
that?
    Mr. Smith. There are several possibilities. One is there--
the ACE Credit Recommendation Service, for instance, already 
has a process in place that is recommending courses for credit. 
There are others. There is a--the National College Credit 
Recommendation Service, based in New York, is another one where 
they are doing holistic measurement of--or holistic evaluation 
of courses, just like an accreditor would.
    There is another option, which would be to look to 
generalized standards across--call it maybe it is sort of a GED 
for college, for instance, where it could be an option for 
those general education credits. Those are two options.
    Mr. Andrews. To what extent do you think that such a 
process should get into the qualifications of the teacher? Tell 
you, one of the things that worries me about not just online 
learning but learning across the spectrum now in higher ed is I 
saw in one of the witnesses talked about a $3,000 stipend for 
an adjunct teacher. Wow. That is a really minimal amount of 
money and I will be if you cost it out on an hour-by-hour basis 
it is not much higher than the minimum wage for the hours 
instructors put in.
    I am not asking if you think the $3,000 is a fair price 
because the market is determining that, but do you think there 
should be some standards for the faculty members offering these 
courses if we did it on a course-by-course basis?
    Mr. Smith. There should certainly be some standards. What 
they are is open to debate. There are not much standards in the 
area of teaching effectiveness currently.
    Mr. Andrews. Yes.
    Mr. Smith. The standards we currently use are about the 
subject, not matter----
    Mr. Andrews. Let me throw that to the other three 
witnesses, too, that not just in the online space, but do you 
think there should be some standards for teaching across the 
board?
    Ms. Boughman. Standards per se, sir, I think are--would be 
difficult to impose in our system of higher education because 
the university faculty, the department, and the school are the 
ones that hire the faculty. They would be evaluating the 
individual professor and their credentials in order to teach 
certain----
    Mr. Andrews. The reason I ask this question is I think most 
of us have had this experience that we have encountered a 
brilliant professor in the course of our studies--I will name 
them later if you would like--who can't teach at all. And the 
person is just a master at biology or calculus or history but 
really can't communicate with students.
    And, you know, it strikes me that in my local public school 
district every person in a classroom has to pass some kind of 
standard of competence, but when I send my daughter to a 
university I won't name here at a huge price, the people 
teaching her didn't necessarily pass any standard. I sometimes 
think we should--my time is up.
    Chairman Kline. Thank the gentleman----
    Mr. Andrews. I will name the university later.
    Chairman Kline. We can hardly wait.
    Dr. Foxx?
    Ms. Foxx. Well, thank you very much, Mr. Chairman.
    And I want to thank the members of this panel for being 
with us today. I think this is a very, very important issue 
that we are dealing with here and I appreciate the good work of 
the staff, too, in putting all of this together.
    I think you all have brought out some really important 
points I wanted to comment on and I think Mr. Andrews' comment 
just now is very revealing in many ways. There are a lot of 
people teaching at the university level who aren't very good 
teachers and probably ought not to be in a classroom; they 
ought to be doing something else. They are probably very 
talented in those areas.
    But we don't have standards for that, and yet we hold our 
public schools, the elementary and secondary teachers, to very 
high standards.
    The point that was brought up about courses are never 
looked at in accreditation I think is extremely important that 
has been brought up, but I would say that in terms of what Mr. 
Smith does, any dean or assistant dean can approve any course 
from any place or any credits for students for credit. And so 
it is getting done even though it is not a part of the 
accreditation process.
    And Mr. Miller pointed out that there are questions about 
flimflam people out there. Well, I want to say that some of our 
traditional institutions may be guilty of flimflam too because 
they do not certify competencies in any way whatsoever in terms 
of what students are learning. We just don't have any way to do 
that now, so I think you have brought out some really important 
points.
    I do have a question, Mr. Jenkins. Can you explain why the 
state authorization regulation cost Western Governors 
University so much since it was promulgated, and how could you 
have spent that money better? What positive benefits would you 
see if the regulation were repealed?
    Mr. Jenkins. So as that regulation passed states began to 
build up a bureaucratic superstructure in order to implement 
and in most states you have a proprietary bureaucracy that 
approves institutions that are from out of state or for profit, 
and in typical case those are the folks that tend to approve 
WGU as an online institution that has no physical presence in 
the state.
    And so there are costs associated with that, and a lot of 
times those as part of that regulatory structure the 
bureaucracy raised the cost to cover the cost of reviewing the 
institutions. So in states like Tennessee it is about $100,000 
to be approved; in Massachusetts it is a substantial cost in 
addition to a full program review of the institution.
    Where those resources--a million dollars at our institution 
basically would be back into finding quality resources for 
students that help teach them competencies. It would go back 
into student success because that is our primary mission.
    Ms. Foxx. Thank you very much.
    Dr. Tate, you argue that opening up federal financial aid 
to prior learning assessment will allow more students to take 
advantage of its benefits. Could you talk a little more about 
this point? What structure would you suggest be put in place to 
ensure the quality of the PLA to protect waste, fraud, and 
abuse of taxpayer dollars?
    Ms. Tate. Yes, I would suggest that first there be a more 
careful review of prior learning assessment programs within 
colleges and universities when accreditors are visiting them or 
questioning them. Right now the accreditation is at the 
institutional level and there is not as much attention to 
individual programs.
    CAEL has been asked by several of the regional accreditors 
to institute some kind of a review of prior learning assessment 
programs prior to accreditation visits for that very reason, 
because the programs are not looked at in any detail by 
accreditors now. So in addition, as I mentioned, the quality 
standards for prior learning assessment--there are standards, 
they can be looked at, they could be--it could be done through 
either self attestation by the institution with survey 
questions responded to or it could be site visits on the part 
of entities like us or regional accreditors.
    There are a variety of ways, also, to deal with abuse--
potential abuse by students in the PLA process because it is--
it requires a lot of documentation of learning that the 
student--it would be very hard, in other words, to fraudulently 
claim credit for prior learning because you have to demonstrate 
it in so many ways.
    So I think that there are a variety of possibilities that 
we are exploring with the Veterans Administration and others to 
do exactly what you are asking.
    Chairman Kline. Thank the gentlelady.
    Mr. Grijalva, you are recognized.
    Mr. Grijalva. Thank you, Mr. Chairman.
    And for the gentlelady that just spoke, I would like to 
tell my friend that if--point out that in the state of Arizona 
450,000--over 450,000 students are on some sort of federal 
subsidized loan. In the state of North Carolina 160,000--over. 
And if we don't act and I urge her to sign the petition to 
allow H.R. 2574, Keep Student Loans Affordable Act of 2013 in 
Arizona for the life of that loan it goes up over $1,000. In 
North Carolina for those students it goes up for the life of 
the loan--$980,000.
    So I would urge my friend, the gentlewoman from North 
Carolina, to sign the petition and--so that we can rapidly and 
decisively act on behalf of millions and millions of college 
students right now that are just going to see the cost 
escalate.
    Let me ask Ms. Boughman, you said that--you mentioned that 
the 85 percentile success for the highest-income success and 8 
percent for the lower-income. Do you think that by allowing 
these student interest rates that I just mentioned to double 
this will be attainable for those students in that 8 
percentile? And the second, and what suggestions would you have 
for this committee to deal with these, regarding the doubling 
of student interest rate for subsidized loan?
    Ms. Boughman. Thank you very much, sir. I think that it 
is--the climb to attain a college degree is going to get even 
tougher for those students coming out of the lower income 
brackets. The disadvantaged students that we have, especially 
those students who are first generation students in their 
family, have a complex set of issues to deal with around both 
financial aid and with their college degree.
    And this is a concern that we have across all of our 
students in trying to make sure they have the right information 
about taking courses or degree programs that will get them 
where they want to be in a reasonable amount of time. Hit and 
miss education will not help solve the problem even if it is 
inexpensive.
    Mr. Grijalva. Thank you.
    Dr. Tate, like you, I am a strong proponent of adult 
education. I think in your testimony there are very good points 
that you made and I appreciate your testimony today.
    PLA has a strong emphasis on barriers to education for 
working adults. The issue of time and money--is very important. 
Can you give us some--can you give us your opinion, insight 
as--what do you think Congress needs to do to make college 
affordable, quickly, and then do you think--same question that 
I just asked--the student interest rates doubling up would 
impact education and particularly returning adults that are 
coming for--to finish or to begin their education process?
    Ms. Tate. Yes, sir. I do believe that our data would show 
that the most underserved students would be damaged the most by 
a doubling of these interest rates. And I think there are a 
variety of ways, in addition to keeping the interest rates 
low--lower that could benefit adult learners.
    One would be to have them take advantage of some of these 
reduced cost degrees that you are hearing about--degrees based 
on competence, prior learning, online or a blended model, a 
whole variety of ways that give them a chance to accelerate 
their progress.
    And prior learning itself is a very big way to help college 
be more affordable because it costs probably a third to a half 
as much to assess a person's learning for a college course 
credit than it does to take it. So if they have the learning, 
why should they pay two or three times more to take the course 
again?
    So we have a lot of studies that show that. For underserved 
populations it is a key strategy.
    Mr. Grijalva. Thank you.
    Mr. Jenkins, you mentioned the Georgetown study that talked 
about----
    Chairman Kline. I am sorry. The gentleman's time has 
expired.
    Mr. Walberg, you are recognized.
    Mr. Walberg. I thank the chairman. And, Mr. Chairman, I 
just want to notify you, I am considering offering a petition 
for signing that would encourage our Senate colleagues to 
respond to what we did a month ahead of the date of the 
expansion of the student loans, following also the pattern of 
the President to call for a long-term, market-based approach, 
which we did here in the House, as you know. I will keep you 
informed about my thoughts on starting that petition.
    But we are at a different subject today of great 
importance.
    Mr. Jenkins, it is good to see you again. We spent some 
interesting and challenging years in the state legislature 
working--you for the governor and I for the people on education 
issues, and thankfully we were on the same side on those 
issues. [Laughter.]
    But in your experience working for Michigan's Department of 
Education you must be familiar with our state's needs of 
creating avenues to provide an older workforce in need of 
continuing or completing their education to fill current needed 
job demand positions. How might a competency-based learning 
model like the one established by WGU help Michiganians meet 
their educational needs while keeping costs in check, which is 
an important factor?
    Mr. Jenkins. That is a great question. Right now in 
Michigan about 1.4 Michiganders have some college but no 
degree, so they started college and then never finished--life 
got in the way. What WGU and institutions like ours offer are 
degrees that are in high workforce demand, so your bachelor's 
and master's degrees in information technology, business, 
teacher preparation, and health care, including nursing.
    And so at $6,000 per year a student can move at their own 
pace and the education that they have received in the past is 
not lost, so that they start from where they start and they 
don't have to go back and retake a series of courses. We also 
have multiple articulation agreements in Michigan that help 
students who already have their associate's degree to continue 
on into WGU and complete their degree.
    Mr. Walberg. So nothing is lost in the past, as it were. 
You can build upon it.
    Mr. Jenkins. Correct. Correct. We can recapture that 
through them being able to assess and work with our faculty to 
ensure that they meet those competencies that they have already 
had and then move forward without--at low cost.
    Mr. Walberg. Okay. In your testimony, Mr. Jenkins, you also 
stated that we need a regulatory environment that supports 
innovation. In your opinion, how is the federal government 
getting in the way of innovation?
    Mr. Jenkins. So another great question. I mentioned a few 
of those areas but I think there is also an issue of--in some 
cases we don't know what we don't know, of where innovation 
might occur if regulations weren't in place. And so that is why 
WGU has been involved in encouraging Congress to support a 
demonstration project around competency-based education----
    Mr. Walberg. Allowing creativity without unnecessary 
regulation.
    Mr. Jenkins. Exactly. And then providing a report back to 
Congress within 12 months to show where areas--and--where 
barriers exist for institutions that are trying to be 
innovative. And we would hope that Congress could support a 
demonstration project like that, like the demonstration project 
on distance learning a decade ago or back in 1998 that provided 
open avenues to create UMUC and WGU and other types of 
institutions that are doing online work today.
    Mr. Walberg. Almost like the creativity of capitalism. Let 
me move on.
    Dr. Tate, can you give me some idea of how much money could 
be saved for the average student that is able to take advantage 
of PLA?
    Ms. Tate. Yes, I can.
    Mr. Walberg. Cut to the bottom line there.
    Ms. Tate. Yes. Okay. Well, we did some preliminary analysis 
and we found that if an average student in our search saves or 
earns, I would say, 15 credits through prior learning 
assessment, they can save from a low of around $1,605 at a 
large, public university to a high of around $6,000 at other 
institutions by simply earning 15 credits, and the average in 
our national study that people earned was 17 credits through 
prior learning assessment.
    So in the research briefs I sent you I did cover that point 
and I do want to add that we also did an informal analysis of 
cost savings and applied it to the Pell Grant program. We said 
if 10 percent of Pell Grant students were to use prior learning 
assessment and if they got 15 credit hours through prior 
learning assessment then we would be able to save the Pell 
Grant program at public 2-year institutions $85 million a year 
and at 4-year public institutions the Pell Grant savings would 
be $466 million a year.
    Mr. Walberg. Savings not to the Pell Grant program but to 
the taxpayer.
    Ms. Tate. Yes. Exactly--to the taxpayer.
    Chairman Kline. The gentleman's time has expired.
    Mr. Walberg. Thank you, Mr. Chairman.
    Chairman Kline. Mr. Bishop?
    Mr. Bishop. Thank you, Mr. Chairman. Mr. Chairman, I--let 
me just start by urging that we move as a committee on H.R. 
2574.
    I think we all agree--there is broad agreement that we want 
a market-based rate but I also think we have to recognize that 
we are not going to arrive at that agreement on a market-based 
rate in the 3 legislative weeks that we have left and students 
are going to be signing their loan promissory notes while we 
are in recess and so we need to lock in place a rate that will 
be more supportive of their aspirations, and that is the 3.4 
percent rate that we have had for the last several years. And I 
hope my colleagues will join us in moving that legislation.
    I want to go to an issue that has really, I think, become 
more controversial than it needs to be and it has been 
characterized in a way that I think, frankly, is not supported 
by the facts, and that is the definition of a credit hour. The 
chairman described the credit hour in his opening statement 
as--the definition--the federal definition of a credit hour as 
stifling innovation. Let me just read to you guidance from the 
Department of Ed.
    This is from the Department of Ed: A credit hour for 
federal purposes is an institutionally established 
equivalency--institutionally established equivalency--that 
reasonably approximates some minimum amount of student work 
reflective of the amount of work expected in a Carnegie Unit. 
Hardly a one-size-fits-all definition.
    Let me also offer another guidance from the Department of 
Ed with respect to seat time. There is no seat time requirement 
implicit in the definition of a credit hour. An institution 
that is offering asynchronous online courses would need to 
determine the amount of work expected in each online course in 
order to achieve the course objectives. Now, I would assume 
that a course objective is some level of competency based on 
some body of knowledge.
    And so my question is how does such a loosely worded, 
broadly defined definition of a credit hour, how can it 
reasonably be determined as stifling innovation?
    And, Mr. Jenkins, your institution is one that I really 
want to learn more about, but you have 39,000 students. That is 
pretty good, wouldn't you say? I mean, and you have done so--
you have built an enrollment of 39,000 students within a model 
that you have been able to fit into this federal definition of 
a credit hour, am I right?
    So if I am right I can assume that you have made judgments 
that constitute institutionally determined equivalencies. Am I 
right about that?
    Mr. Jenkins. I am sorry. I missed your last sentence.
    Mr. Bishop. Okay. You have constructed a method of course 
delivery that works for your students. You have done so within, 
presumably, this broad definition of what constitutes a credit 
hour. So I can only assume that your ability to do so is 
because you have exercised the determination of institutionally 
determined equivalence for course objectives and the 
determination of credit time versus competency. Am I right 
about that?
    Mr. Jenkins. Correct, in that way. But the distinction is 
that at WGU you don't enroll by and--you enroll--you have to--
you take tests but you enroll in a course of study. Every 
single student goes through the same series of competencies. 
You don't have a multiple set of competencies.
    Mr. Bishop. Okay. But your students do receive some form of 
financial aid. Is that correct? I mean, they are they Pell 
eligible?
    Mr. Jenkins. Yes, sir.
    Mr. Bishop. Okay. So you have been able to take your model 
and craft it in a way that comports with the federal definition 
of a credit hour and the generally accepted definition of 12 
hours is full time and so on. Am I right about that?
    Mr. Jenkins. Correct. And we are the only institution that 
does competency-based education as Title IV eligible at scale 
in the country today.
    Mr. Bishop. But my point is you have been able to do it. 
Correct?
    Mr. Jenkins. We have been able to do it and no one else 
has.
    Mr. Bishop. So therefore, for you, given the innovation 
that you brought to the table, given the--you know, the 
willingness of your faculty to pursue new models of education, 
the existence of federal regulation has not been an impediment. 
You have 39,000 students. That is pretty good enrollment.
    Mr. Jenkins. We were designed by governors and part of our 
role was to expand the idea of competency-based education and 
grow that in the states and provide affordable capacity. We 
would like to see more innovations around the country.
    Mr. Bishop. I think you are agreeing with me.
    Let me go to the issue--to Dr. Tate and the issue of prior 
learning experience, and I only have a very little bit of time 
left.
    Chairman Kline. I am sorry. The gentleman's time has 
expired.
    Mr. Bishop. I guess I have no time left.
    Chairman Kline. Dr. Bucshon?
    Mr. Bucshon. Thank you, Mr. Chairman.
    I want to focus on something that is a concern of mine, 
personal experience. And when I went to college in 1980, based 
on really my inferior grade school and high school education, I 
would say, at the time, when I took my entrance exam for 
University of Illinois they made me repeat algebra and geometry 
even though I had had that in school and I was good at math. So 
I see some opportunity here for at least, you know, with what 
you are doing, Mr. Smith and Mr. Jenkins and others, for this 
type of coursework it is very expensive, you know, to go to 
college and find out that you have to spend a semester or maybe 
even two basically catching up and then realizing that you 
can't graduate in 4 years.
    Maybe you can comment on that, Mr. Smith. You know, I could 
see even opportunity for bricks and mortar institutions like 
University of Illinois or University of Maryland making it much 
cheaper if you do have to take remedial courses, whether it is 
online or whether it is bricks and mortar.
    Start with Mr. Smith and comment on that.
    Mr. Smith. Yes. I think that is one of the greatest 
potentials of online learning is lower cost essentially 
failure. So we assume that failure is bad, and in our current 
higher education structure it is. But it really is expensive 
failure is bad, so students who don't do well, if it is cheap 
it is actually not--the liability isn't that great.
    So for us, we get a lot of students who come through and 
because we charge on a subscription, students--particularly 
adult students--if they have bit off more than they can chew, 
their health care goes awry, child care, whatever it is, and 
they decide they can't complete, if they stop after the first 
month they are out $150. As opposed to starting at a community 
college and then being several months in and then having 
several thousand dollars in debt by the time you get there.
    So I think there are a lot of ways to start as a first line 
of defense, really, to offer these courses very affordably, 
either through some of the free courses or through us, and then 
progress into an institution after that. It won't be the 
solution for everybody. There will be certainly students who 
need more support than that, but it is a first line of defense 
and then you can iterate after that.
    Mr. Bucshon. Mr. Jenkins, do you have anything to add on 
that?
    The subject about cheap--having--if you are a student--and 
a lot of our students have to take remedial classes when they 
graduate from school--we are working on that side of the issue 
also, of course--that should it be cheaper, even online or at 
bricks and mortar institutions? If you are that student should 
you be able to get that remedial study much cheaper than you 
would if you are not--you know, if you are from a school system 
where you maybe were better prepared?
    Mr. Jenkins. Right. Absolutely. It is a great observation 
in the fact that a lot of students do come underprepared to 
postsecondary education.
    At our institution we are mostly dealing with students who 
are adult learners who by and large may have had those skills 
but they have faded over time. Math is a skill that tends to 
expire. And we have built up kind of intermediate courses for 
students that help them to get to that point but that are 
college credit bearing.
    Outside of my role I also work with states on everything 
from dual credit to dual enrollment, and a lot of states are 
looking at assessing students early in their junior year so 
that they can take a dual credit opportunity through their 
local university or through Ivy Tech or something like that 
where they could--where they could gain those credits, and they 
are doing it in an online way that is pretty innovative.
    Mr. Bucshon. Great.
    Ms. Boughman. I would suggest that remediation or 
developmental learning is a real challenge for us, and in 
Maryland we are working very closely with our K-12 partners in 
order to better prepare our students for their college years. 
And we are looking very closely at all kinds of ways, from dual 
enrollment to block transfer of credits for general education--
30 hours of credits from the community colleges and now, in 
fact, all of our public institutions accept 60 credit hours 
from our community colleges. And in fact, transfer is a very 
good way, and the community colleges tend to be even better 
prepared to help those students in remediation in the 4-year 
institutions.
    Ms. Tate. Just want to add that though those efforts are 
being made--and I agree that they are being made--it is still 
the fact that developmental education is a--in many cases a 
trap for students. They get into developmental ed, they use up 
their financial aid on these low-level courses, and then they 
have no financial aid remaining to actually take their 
programs. We have not solved this problem in higher education.
    There are a number of alternative things that can be done 
that would--that I think would make it more possible for people 
to be successful. This does not in any way devalue some of the 
innovations that are going on there, but it is an enormous 
problem for community colleges in particular and has not been 
solved.
    Chairman Kline. The gentleman's time----
    Mr. Bucshon. Thank you.
    Chairman Kline [continuing]. Has expired.
    Mr. Sablan?
    Mr. Sablan. Thank you very much, Mr. Chairman.
    Good morning, everyone.
    I represent probably one of the poorest districts in 
America, where I know I am aware that 80 percent of our college 
students at our local community college have a student loan of 
one sort or another, and so--which is why increasing the 
interest rate on a student loan is just as important, it is 
truly important to me as it is probably for the gentleman who 
just spoke, where in his state of Indiana 291,000 students 
receive federal subsidized loans. And if we don't get 2574 
marked up and brought to the floor, they can see their college 
students see an increase of $929 from the life of its loan.
    From where I come from in the upcoming fall semester, most 
high school graduates who have decided to go to college will be 
going to the local community college that we have. They just 
can't afford to leave home. It is a lot less if you can drive 
across state line; you have to fly. It took me 30 hours to get 
here yesterday from the Northern Marianas, and so the cost is a 
very--is prohibitive for some of us.
    I was just talking to a school class valedictorian recently 
and she decided to join the service, put on the uniform, and I 
asked her why and she says, ``I can't and my family can't 
afford to send me to college and so I am going to go and do my 
6 years and use the G.I. Bill to get an education.'' This is a 
class valedictorian. And just for your information, over 30 
percent of our high school graduates put on the uniform, and 
many of them that I have spoken to it is because of the use of 
the G.I. Bill. And so it is really very important for us to 
keep the costs of college down.
    Mr. Jenkins, you represent Western Governors. Is the 
Northern Marianas part of your program--the territory--the 
Commonwealth of the Northern Mariana Islands? They are a part 
of the Western Governors Association. Are the people from the 
Northern Mariana Islands part of----
    Mr. Jenkins. Yes. Yes.
    Mr. Sablan [continuing]. Your WGU----
    Mr. Jenkins. I am not sure how many students we have but we 
do cover the territories.
    Mr. Sablan. Right. Because I am aware of many students in 
the Northern Mariana Islands who attend online universities--
Phoenix and those kind of for-profit universities, I think, and 
it is really prohibitive because they just don't have access 
to--they can't just drive--get in the car and drive elsewhere 
for a college.
    I am also aware we have got students who, you know, who go 
into schools like Harvard and Stanford and Hopkins and those 
really important Michigan and the California system, for 
example, and I have a daughter who is graduating--who is 
turning to a senior in the fall and I am worried about her 
going to graduate school because it is going to be cost 
prohibitive.
    And I am really encouraged by what you guys are talking 
about because this would allow the people in the Northern 
Mariana Islands to have greater access to school to get a 
college education where they can't otherwise.
    Where I come from over half our workers in the private 
sector are there on some kind of visa or another--they are not 
U.S. workers, which is why really one of the reasons I ran for 
Congress is we need to start investing in our people. We don't 
have manufacturing; we don't have natural resources.
    The only thing we have--the most important resource we have 
are our people, and we need to start investing in their future. 
Chairman Miller will attest to this that this is always talked 
about is helping us invest in our future because it is all that 
we have.
    And again, I would also encourage my friends on the other 
side of the aisle to sign onto this because it is really 
critical--2574. Keeping the cost of college education as low as 
possible is very important to us--to me, just as I am sure to 
everyone across--in this Congress and everyone in this room.
    So, Mr. Chairman, I yield back my time.
    Chairman Kline. I thank the gentleman.
    Mr. Guthrie, you are recognized.
    Mr. Guthrie. Thank you, Mr. Chairman.
    And, Dr. Tate, I was reading through your testimony and I 
was trying to understand how the assessments work, and I have a 
scenario like the 40-year-old in your testimony who--a young 
lady who dropped out of high school because she had a baby, 
worked in a manufacturing facility, extremely intelligent, 
figured out that she was, she was working in the factory, 
trained her for a real high-tech kind of skilled job, but tried 
to encourage her to go to college. She was 30 years old at this 
point and saying, ``Well, if I go to college I have got 5 years 
to''--it would probably take her 5 years at least to do it and 
by that point had a teenager, I believe the woman did.
    And so the thought--what I said to her was, ``Well, you can 
go for the next 5 years and really sacrifice a lot and then 
spend the next 30 years of your career at high income and doing 
managing things because you have the ability, or you can spend 
the next 35 years wishing you had gone back.'' And so what--
that is the kind of choice.
    But if I could have shrunk that time in her mind--if I 
said, ``Hey, look. It is not going to take you 4; it is going 
to take you 1.''
    Now, I understand you have a Navy scenario, too. If a Navy 
person is in the nuclear program and they get out of the Navy 
and they say, well I have got the probability and statistics I 
took, I mean, that seems ready to--for somebody to look at and 
say, ``That meets our standard.''
    You have the 40-year-old that worked--started as a janitor 
and moved into middle management. This is a lady who started as 
a factory worker, moved into sort of middle level management--
not quite, but--and I know there were some statistics courses 
we taught her.
    But I guess the question is, can you walk through a 
portfolio assessment? How do you kind of do life experiences 
don't--not like the Navy that I took basic NCL officer course 
and this is what was in it. This is the things I did for a 
living and how does it translate into credit?
    Ms. Tate. Yes. There are very carefully constructed 
assessment processes to actually figure out what she knows. 
Because it isn't what she did that should give the college 
credit; it is what she knows and has learned. It is the 
competencies. It is the learning outcomes.
    And there are ways of knowing that. She can----
    Mr. Guthrie. How do they begin? I mean, how do they just 
start with that?
    Ms. Tate. First of all, in colleges and in our 
LearningCounts initiative the person is assisted to figure out 
first what did she do, then what did she learn from those 
things. And she documents all that and then we look at what 
courses at the colleges that she is interested in or is already 
in, if she is already in one--what courses do these areas of 
learning look like? And we literally work with her on what do 
you know, what is in these course outcomes or competency 
statements, and how can we evaluate and know that you know 
that?
    And she is able to actually look item-by-item at--and that 
is why we like colleges to do a better job of outlining their 
learning outcomes and courses----
    Mr. Guthrie. Well, does your group do that assessment and 
then say, ``These are credits she should get,'' and colleges 
can choose whether or not to accept or----
    Ms. Tate. I am sorry. I couldn't hear you.
    Mr. Guthrie. Does your group do the assessment then, or 
people in your association do the assessment?
    Ms. Tate. No. Faculty experts from all over the country do 
the assessments.
    Mr. Guthrie. Okay, but they get a credit assigned through 
the assessment----
    Ms. Tate. Yes. The faculty member says yes----
    Mr. Guthrie [continuing]. And then colleges--that any 
college can choose to accept or not accept----
    Ms. Tate. Yes. That is right. That is right. And many, 
many, many do. I mean probably, I don't know, there are 
probably 2,000 of them that do.
    Mr. Guthrie. Okay.
    Ms. Tate. Because they understand that the learning 
outcomes have been identified; they are on a transcript. It is 
very clear what they are. They are not general credits of some 
sort of vague sort. They are identified. It is a part of a 
program.
    Mr. Guthrie. Yes. After a while we figured out she could do 
the work, because I have some master's work in statistics and I 
was trying to teach her statistical process of controlling and 
manufacturing and I looked at her and said, ``You are better at 
that than I am. I just had access to it.''
    And so once she got over the hump of, can I go to college, 
but the point was the time. So anything that she has--hey, you 
can do it in 3 instead of 4, I think that really would have 
encouraged her to do so.
    But I have one question with Mr. Smith.
    You say you have courses that don't lead to degrees? And I 
understand what you are talking about, so you can compete and 
offer better, but when somebody goes into the job market to 
make themselves marketable, I can see that you would put on a 
resume for my business that ``I had a course in probability and 
statistics'' because we use that quite a bit, but how does it 
make them marketable to take courses from your organization but 
if it doesn't lead--not that they are not learning, but how 
does it make them marketable in the real world?
    Mr. Smith. Students come to us, they take however many 
courses--anywhere from one to 15 or 20 gen eds or standard 
courses, and then they matriculate to one of our partner 
colleges or a college that has agreed to award credit for those 
courses, and on our website we are very clear that if you are 
not going to one of our partners, check with the college where 
you are going to make sure they will award credit for these 
courses.
    So students take a few courses--the kind they take in any 
kind of community college or a 4-year environment in their 
freshman and sophomore year and then transfer into UMCU, 
Western Governors, or any of the other partners with whom we 
have. So it is a low-cost, low-risk, very convenient pathway to 
get those early courses out of the way and then move into a 
degree.
    We have started doing some stuff with corporations, where 
we are becoming part of tuition assistance programs for 
corporations, and we are--we believe in time we will start to 
see more recognition from corporations, you know, that these 
are either equivalent to or--close--or comparable to a degree.
    Chairman Kline. The gentleman's time has expired.
    Mrs. Davis?
    Mrs. Davis. Thank you, Mr. Chairman.
    And I certainly appreciate my colleague wanting to 
personalize for students what they might be able to contribute 
in terms of those credits, but I think the reality is that when 
we are--if we are seeing student interest rates going up then 
if we personalize--in Kentucky, for example, where my colleague 
is from, 124,000 students--124,069 students received federal 
subsidized loans, so for those students, you know, $942, which 
is the estimated cost in the life of the loan, that is 
significant.
    And I think trying to put that against what is it that they 
would save by getting that credit and not having to take 
additional classes, you know, there is a balance there, but I 
think what we are trying to get out is the certainty. It is the 
certainty of students who know that when they take out a loan 
it is going to be the same interest rates when they complete.
    And the problem that I think we have with the Republican 
alternative in this is that that could change. It could change 
every year. That certainty is kind of a--you know, is good for 
students, and I think there could be a chilling effect if 
students now--``Okay, I am going to take out a loan at this 
percentage and then by the time I finish I am going to be--It 
could be twice that.''
    If you don't have a cap and if you change it every year, 
that is really a problem. And so trying to find that certainty 
I think is what is so important.
    What I would like to understand better from you is as we 
talk about the kind of disruptive innovation, basically, that 
schools are engaged in today, whether it is online, whether it 
is MOOCs, whatever that is, how--number one, what is the 
federal role in that? What do you think the federal role should 
be in supporting that, if at all?
    And secondly, how do we really decrease the cost for the 
degree by virtue of having these different options for students 
and what is the range of that cost? Again, is it--does it 
amount to what--if you had had a stable interest rate would 
that be greater than, less than? What are we really talking 
about here so that we can identify and move forward with those 
technologies, that innovation, as opposed to working harder, 
perhaps, to make sure that, you know, people enter with a 
certainty of what their education is going to cost. It is not 
just the student; it is the parent loan, as well, that we see 
great increases for.
    So, Dr. Boughman, if you could begin to talk about that?
    Ms. Boughman. Well, you have made several very important 
points, Mrs. Davis. First of all, every little bit helps, so 
that keeping interest rates down on student loans of course 
would be incredibly important to all of our students who are, 
in fact, garnering more and more debt.
    Another challenge is understanding the debt that they are 
taking on, and having constant rates may, in fact, be more 
easily understandable in a very complex environment the point 
that you made.
    Our concern is student success as efficiently and 
effectively as we possibly can have it, so that a student who 
comes in, whether they have transferred credits in from our 
community colleges or from any other source, get them to their 
degree cleanly and quickly rather than having extra credits 
taken in courses that don't lead directly into their degree 
pathway.
    And this is why in the state of Maryland we are working so 
hard with all of our partners to, in fact, have transferability 
from institution to institution and use of credits toward 
degree processes. And the idea of equivalency is incredibly 
important but it is not as easy as it might sound. It does take 
faculty time to sit down and figure out whether the accounting 
course taken at one institution or another really is equivalent 
to the accounting course required for that degree program. So 
it is a matter of all of us spending a little bit of time 
helping----
    Mrs. Davis. Thank you.
    And, Dr. Tate, very quickly, because you have spoken more 
to this on the panel. When we are talking about individuals 
that are veterans that are coming out of the service--Corpsmen, 
for example, that have exceptional skills on the battlefield 
and are trying to translate those--how do you see the faculties 
working with those kind of credits and are they using the 
military in order to do that?
    Ms. Tate. Well, as was mentioned, the American Council on 
Education already reviews military training and makes college 
credit recommendations to institutions across the country for 
that military training and it is done throughout the services. 
And so a person who got that formal training in the Navy or 
Army or wherever--they can go to the source, demonstrate to a 
college that they have it, and then the faculty and the 
registrar and others can sign off on that.
    If the learning didn't occur in formal training then they 
need to document it in a portfolio of the kind I was describing 
and faculty can look at that, too.
    Chairman Kline. The gentlelady's time has expired.
    Dr. Roe?
    Mr. Roe. Thank the chairman, and I thank you for having 
this meeting.
    And, Mr. Jenkins, I had to laugh a little bit when you 
referred to college students in the 1960s as elitist. I 
certainly didn't view myself that when I was selling shoes or 
hauling hay in the summer. So that is the first time I have 
ever been accused of being an elitist.
    But I want to thank you all for trying to make innovation 
and making college education. I have served on two foundation 
boards in college, one as president. It is a huge challenge.
    My son, as some of the other members have talked about, 
fussed about the cost of college education. I won't mention his 
college, but his fall quarter of freshman English cost more 
than my 4 years of college did. That is an astounding number 
when you hear about that, and students are having to deal with 
this all over the country.
    I guess a couple of the things that the challenges that you 
have--and I want to just open it up for you all because this is 
a fascinating discussion we have had--is that when you go to 
college you have a certain standard that you have. You have an 
ACT score, a GPA, they know the high school where you graduated 
from. There are some standards that are there.
    How do you equate those standards when you go, let's say, 
to Western Governors? That is one. So I know that when I--when 
you graduate from U.T.--University of Tennessee, or Vanderbilt, 
or Austin Peay, or wherever it may be in Tennessee, I can look 
at that college and find out what percentage of those students 
pass their nursing exams, their teacher certification exams, 
how many in that school that applied to medical school actually 
got in medical school and graduated. All that data is out 
there.
    How do you do that with online? And I think it was brought 
up--and I think you are going to have to, in online courses, 
set up standards. Because ultimately, I almost see this for 
bricks and mortar schools like the post office. Look at what--
look at what these things right here and text messages have 
done, and I wonder if that is--if we are not going to harm our 
bricks and mortar colleges or are they going to embrace this 
and actually embrace the online?
    And then one other thing, and I am going to open it up for 
you all, is I have still tried to figure out, let's say at 
Western Governors, how--and you brought back some memories of 
my college education.
    Squalus acanthias came up, which is a dogfish shark. How do 
you dissect anything when you are in an online course? Or how 
do you find the molecular weight of an unknown in your 
chemistry class? How do you do that part--that--I could see 
where you could take a history class, but when you get into 
more technical things like that like I was involved in, how do 
you do that?
    Mr. Jenkins. Thank you. That is a really, really good 
question.
    So at WGU the--because we are competency-based we work with 
business and industry to determine what are the competencies 
that a student needs to be--show mastery of in order to be 
successful in that field. And so, for example, in information 
technology if you graduate from WGU with a bachelor's degree in 
information security, you can have anywhere from 13 to 15 I.T. 
industry certifications that are all part of what you pay. As 
part of the $3,000 every 6 months, $6,000 a year. It is an all-
in cost, so all your learning resources, all your assessments 
are covered within that because we use the technology to 
leverage the instruction.
    The issue over biology and things like that, we actually 
ship a--every student has a camera and we ship a set to--a 
learning lab to the students and the students utilize that, and 
they video tape it as part of a demonstration project in 
undergrad. We do some pre-licensure nursing programs where we 
actually have clinicals that we team up with hospitals and 
others to provide that kind of clinical supervision where you 
need that kind of--that intimate clinical, and we do the same 
thing with teacher preparation.
    Mr. Roe. What happens when someone applies to WGU? Do you 
have certain standards--you have to have an ACT of 24 or 25, 
whatever it is, and a GPA of a certain amount?
    Mr. Jenkins. We don't have any national assessments. We 
have an internal assessment that looks at three key things. It 
looks at your numeracy and mathematical skills, your English 
language arts skills, and you have to be at a certain standard 
for those, but it also looks at things like grit and 
perseverance and whether you are ready for this learning. That 
really counsels out about 20 percent of the students who apply, 
so about 80 percent of the students who apply ultimately enroll 
and get into the institution.
    Mr. Roe. Our state, Dr. Tate, is attempting to use those 
things you learn in life, and one is a driver's license. Seems 
fairly competent. If you can drive a big huge tank across the 
state of Tennessee for the U.S. military you ought to be able 
to drive a truck across, and so we license. We do other things 
like that to use competency you have already shown and there is 
no point in going through an expensive recertification for 
that, so I applaud all of you all.
    I know my time is about expired but I applaud for what you 
are doing in innovation both in the bricks and mortar and 
thinking outside the box. But I do think that the online are 
going to have to have some standards just like universities do 
so you know when you graduate that you are getting a quality 
product.
    I yield back.
    Chairman Kline. Thank the gentleman.
    Mr. Courtney, you are recognized for 5 minutes.
    Mr. Courtney. Thank you, Mr. Chairman, and thank you for 
holding this hearing.
    I want to just, again, at the outset note that the day the 
chairman brought out H.R. 1911 was May 23rd on the floor of the 
House. The measure passed. The 10-year Treasury note yield rate 
on that date was 2.02 percent; today it is 2.65 percent.
    I mean, if anybody wants a perfect example of how you have 
to handle a variable, market-based system with care, just look 
at the last 40 days in terms of what is happening since Mr. 
Bernanke made his announcement about quantitative easing and 
how quickly the markets responded in terms of changing the 
whole terrain that is affecting home mortgage interest rates, 
but certainly a system, if we had enacted 1911, that is going 
to turn our student loan system willy-nilly into a market-based 
system.
    Again, I think as some of the speakers have said here 
earlier, I think there is no ideological religious objection to 
using market-based, but the fact is that there were not enough 
safeguards in 1911 to allow a rate to reset every year while a 
student is still in college, given the volatility which we are 
seeing, again, just in the last 40 days in terms of Treasury 
bonds is, in my opinion, a big warning signal about why we need 
to go slow here, to be careful in terms of what we are doing to 
students.
    And obviously 2574, which extends that rate--84 percent of 
the American public supports protecting that lower rate in a 
polling that came out, because they have a common sense 
understanding of what is the difference between a fixed rate 
and a variable rate, and that we saw in 2008, the world economy 
tied to these subprime mortgages blow up because of the fact 
that people, again, were peddling these things and buying these 
things, which had huge consequences.
    Again, I would note that my good friend who just spoke from 
the state of Tennessee has 138,000 students receiving federal 
subsidized loan. Again, their costs will go up $973.
    Again, I would ask him to join us on our side to, again, do 
what I think the American people know is the smart move here, 
which is extend the rate, and in the context of a higher 
education authorization bill, which will incorporate all of the 
mechanisms from Pell Grants, Perkins, Stafford, and also the 
great ideas that are being discussed here today. That is the 
comprehensive solution that the country is looking for.
    Again, as someone whose family had great news about a year-
and-a-half ago when my oldest son announced that his credits 
that he had accumulated outside of Georgetown University were 
going to allow him to finish in 3-\1/2\ years, we felt like we 
won the lottery that day that he announced that. I took him out 
to dinner that night here in town and said, ``Order whatever 
you want on the menu.'' Again, the ideas that you are putting 
forth here about affordable solutions, again, is just so 
important and again, a Higher Ed Authorization Act, which I 
think can really structure ways to enable students and families 
to do that, is just so important for us to do.
    Dr. Tate, again, I would just like to focus again on the 
military aspect. Again, one of the big challenges we are 
hearing out there is that folks on military installations who 
are close to discharge, again, are sort of getting swarmed by 
individuals who know that the post-9/11 G.I. Bill is sitting 
there waiting.
    And, you know, how we can, you know, sort of equip those 
families, because again, they have a benefit they can extend to 
their children and spouses so that they spend it the smartest 
way possible. How can we give them the earliest knowledge about 
what their skills that they learned, whether it was driving a 
truck like Dr. Roe said, or Corpsmen, you know, will give them 
a better sort of horizon to make the best choice for their 
families?
    Ms. Tate. I think that there are a variety of things that 
can be done and various people in various places are trying. 
There is not a comprehensive solution yet.
    But for example, in the Midwest employers--our veterans 
initiative that we are engaged in there, upon discharge we give 
this individual career and educational advising immediately so 
that they know their choice of options, they know their prior 
learning, they know what the best pathway is to a degree or 
credential, and the time to work with them is right then, not 
after 6 months has passed, but right at the time of transition 
from active military into after military status.
    So what I believe is that that kind of solution needs to 
be, you know, universally in place. Colleges are doing 
tremendous things with veterans but the veterans have to find 
them first, and what we need is interventions that move in on 
the bases with individuals and help them right then.
    Mr. Courtney. Thank you. I think that is the right time.
    Thank you, Mr. Chairman.
    Chairman Kline. I thank the gentleman.
    Mr. Rokita, you are recognized for 5 minutes.
    Mr. Rokita. I thank the chairman and I welcome the 
witnesses. It has been a very interesting panel.
    Thank you all for participating.
    My first question goes to Mr. Smith. Now, StraighterLine--
that is not what we call the MOOCs, right? That is a different 
model?
    Mr. Smith. Yes and no.
    Mr. Rokita. Massive open online course, for those at home.
    Mr. Smith. So no in that it is not the same but the 
principles are the same. The difference is we have created a 
pathway to credit for which we can charge, so we sort of think 
of ourselves as a MOOC with a business model.
    Mr. Rokita. A MOOC with what?
    Mr. Smith. A business model.
    Mr. Rokita. Do you consider Mr. Jenkins' operation a MOOC--
again, massive open online course?
    Mr. Smith. No.
    Mr. Rokita. Okay. I just wanted to be sure.
    What impact do you see these open online courses having on 
traditional higher education and what impacts do you see your 
company having on traditional higher education? Can you 
compare? When you say you are a MOOC with a business model, 
just unpack that a little bit----
    Mr. Smith. Sure. I think a----
    Mr. Rokita [continuing]. 30 seconds or so.
    Mr. Smith. I think a better phrase than MOOC is--and 
equally inelegant, but a marginal cost pricing model. I mean, 
so the--I realize it doesn't roll off the tongue, but the--that 
is kind of what is happening is so we are pricing much closer 
to the cost of delivery, the MOOCs are pricing closer to the 
cost of delivery, and the irony is it has to be done outside of 
the accreditation structure to be able to deliver it. So it has 
tremendous potential but it is restricted by the willingness to 
award credit for these different sources.
    Mr. Rokita. Dr. Tate, real quick?
    Ms. Tate. Oh, I was just going to add that, you know, MOOCs 
for the most part are still non-credit, though a few are 
beginning to be offered for credit. And in the beginning no one 
really--that was offering them really cared whether anybody got 
credit.
    Mr. Rokita. I see.
    Ms. Tate. This model that Burck is talking about is one 
where the intention is to go for college credit. They are all 
online open resources.
    Mr. Rokita. Okay.
    And, Dr. Boughman, you agree with that?
    Ms. Boughman. Yes. In fact, it--from the more traditional 
university point of view it is the equivalency that becomes 
important in the transferability into a degree pathway.
    Mr. Rokita. Okay. Thank you.
    And then, Mr. Jenkins, of course, you and I crossed paths 
when I was Indiana secretary of state and you were the 
governor's senior advisor on education, and of course, 
Indiana--we have been talking about state numbers here, state 
statistics--of course, Indiana is a member of the Western 
Governors Association, at least in terms of the university. Can 
you tell me in the 2 years that Indiana has been involved what 
the numbers suggest and what conclusions you draw? Indiana 
specific, please.
    Mr. Jenkins. Thank you. So in Indiana right now we have 
gone from--when you signed the executive order as secretary of 
state we went from 250 students and one employee to now we have 
3,500 students and well over 700 graduates, and all of those 
are in I.T., business, health care, nursing, teacher 
preparation. The average age of those students is 36 years old.
    It has been a strong success in the state. State need-based 
aid is provided to the students who are otherwise eligible, 
which really, when you couple that with Pell, pretty much 
covers the entire cost of their education going through.
    We have a lot of success stories from Indiana. It was the 
first state that actually created a state-branded WGU and it 
has been a strong model targeting adult learners--the 750,000 
adult Hoosiers that have some college and no degree.
    And there is a lot of work still to be done in the state, 
but institutions like ours and others are moving in that 
direction.
    Mr. Rokita. But, Mr. Jenkins, how much has tuition risen?
    Mr. Jenkins. In that time our tuition has not risen.
    Mr. Rokita. Oh.
    Mr. Jenkins. It has stayed the same.
    Mr. Rokita. Very good. And MBA program too, now?
    Mr. Jenkins. Our MBA program has grown from--at this point 
our MBA program is, I believe, one of the largest-enrolled MBA 
programs in the state underneath I.U., Purdue, and Notre Dame--
number four.
    Mr. Rokita. All right. Thank you.
    You mentioned financial aid. When you compare it to 
traditional education you are saying it is the same amount of 
financial aid and the same types, or is there any difference or 
any bias against or for you?
    Mr. Jenkins. So in Indiana we established as part of the 
executive order and the agreement with Indiana that our 
students would be funded at the same rate as if they were 
attending a public university.
    Mr. Rokita. But that is state-by-state. Other states----
    Mr. Jenkins. Yes. State-by-state agreement for state need-
based aid.
    Mr. Rokita. Okay.
    I yield back, Mr. Chairman.
    Thank the witnesses again.
    Chairman Kline. I thank the gentleman.
    Mr. Hinojosa?
    Mr. Hinojosa. Thank you, Chairman Kline and Ranking Member 
Miller.
    While I clearly understand the need to hold a hearing on 
innovation in higher education, our committee and Congress, it 
seems to me, cannot continue to neglect students and families 
and allow colleges to become more expensive and not affordable. 
Listening to the gentleman from Indiana, Congressman Todd 
Rokita who just spoke, I would like to point out to you that 
your state of Indiana has 291,000 students receiving federal 
subsidized loans and that if this committee fails to adopt this 
Democratic petition and fails to enact H.R. 2574, Keep Student 
Loans Affordable Act of 2013, each student in your state will 
see their college costs increase an average of $929.
    And I, too, am quite concerned because in my state of Texas 
we have 464,000 students who are borrowers as of this last 
school year and academic year, and that, to me, is reason for 
wanting to have this extended another year until we can find a 
better solution than what has been proposed.
    Without Congress' swift action, more than 7 million low-and 
moderate-income students--and I repeat, more than 7 million 
low-and moderate-income students working towards a college 
degree will have to pay an additional $1,000 for each loan they 
borrow.
    On June 28th of this year Democratic members requested that 
this committee mark up the bill to reverse the rate but 
received no response. Every Democratic member has signed the 
petition to bring this bill up for a vote.
    The bill we are proposing will help ensure that college 
remains within reach for students who rely on federal loans to 
pay for their education. As ranking member of this Subcommittee 
on Higher Ed, I ask my Republican colleagues to do what is 
right. Sign this special petition so that we can move the bill 
to reverse that rate increase.
    And at this time I would like to proceed with questions for 
our witnesses. My first question is for Dr. Joann Boughman.
    In your testimony you mentioned that gatekeeper courses 
posing significant problems for many college students and halt 
their degree progression. Please explain to us how course 
redesign has helped students persist in your college.
    Ms. Boughman. Thank you, sir.
    Our course redesigns are, in fact, teaching our teachers as 
well as our students, and one of the things that we are clearly 
learning is that interactive and active learning models, in 
fact, help students learn better and longer so that, in fact, 
these course redesigns that engage the students in a 
progressive kind of way and an interactive kind of way are 
leading to higher student success, lower dropout rates, and, in 
fact, progression more quickly toward degree----
    Mr. Hinojosa. Would you think that the system that you just 
described is supporting the nontraditional student?
    Ms. Boughman. It supports the nontraditional as well as the 
traditional student, and these blended learnings as well are 
moving from the strict, old-fashioned lecture format to the 
blended learning to the totally online are capturing not only 
new areas of teaching and learning, but are also utilizing the 
skills--the electronic skills that the newer generations have 
so well adapted to.
    Mr. Hinojosa. Thank you for your answer.
    My next question is for Mr. Scott Jenkins.
    I am somewhat familiar with your Western Governors 
University. How are the academic credits, the awards, the 
progression determined in a competency-based education 
framework and how is student achievement handled for purposes 
of transcripts and transfer of credit?
    Mr. Jenkins. Thank you. The university works with external 
program councils made up of business, industry, and academia to 
determine the competencies toward each degree program. Our 
faculty then uses those competencies and bundles them into 
courses, identifies learning resources from business, industry, 
publishers, other institutions, and directs students to those 
learning resources in order to learn the competency. And then 
we----
    Mr. Hinojosa. I like that you are working with----
    Chairman Kline. I am sorry. The gentleman's time has 
expired.
    Mrs. Brooks?
    Mrs. Brooks. Thank you, Mr. Chairman.
    To follow up a little bit--Mr. Jenkins, good to see you 
again, having worked with you in Indiana, as well, at my time 
at Ivy Tech. So while Western Governors University is not 
really new--it has been around I guess since 1997 but has 
enjoyed tremendous success in Indiana--how are the placements--
the job placements of your graduates doing? And it is a fairly 
new higher ed concept, and so are employers embracing your 
graduates, both at the undergraduate and at the graduate school 
level?
    Mr. Jenkins. Thank you. That is a great question. It is 
great to see you.
    The debate used to be whether online learning was as good 
as classroom learning. That is really not where we are these 
days. We believe that we can--we have improved both quality and 
affordability, and we measure success of our students on lots 
of different measures, one of which is we look at our students 
themselves and we do an annual student satisfaction survey and 
97 percent say that they are satisfied or very satisfied with 
their education.
    We also survey them to find out how many have received a 
raise, promotion, or new job, and about 65 percent of our 
graduates have received that. We do an employer survey every 
year, and when we survey employers 98 percent rated the 
preparation of WGU students as equal to or better than 
graduates of other institutions.
    We are really serious about our work with business and 
industry and form partnerships, and we actually go to them and 
ask them not only do you like what our graduates are doing, but 
are there weak areas where we can improve, where we can embed 
that kind of competency into the curriculum? So we have had a 
great, successful partnership with business and industry in our 
university.
    Mrs. Brooks. Thank you. I am proud to report--and I doubt 
that you know this--my paralegal when I was a general counsel 
at Ivy Tech Community College was a student at WGU. She had her 
associate's degree and was working toward a bachelor's through 
WGU, and I continue to keep up with her progress, so it has 
been fabulous.
    Quick question for Dr. Tate with respect to prior learning 
assessments, and I am familiar with them, having been at the 
community college, but it seems a challenge is finding those 
evaluators and the people within the higher ed institutions who 
are trained and have the ability and the willingness to take, 
for instance, the veterans' experience. What is CAEL doing with 
respect to helping the higher ed institutions embrace prior 
learning assessments so that it can become a more useful tool 
and so that so many particularly adults, you know, can go back 
to college and earn some of those credits?
    Ms. Tate. There are two ways that we are working with 
higher education on this. The first is something we have done 
for decades, and that is to--we have formal training that can 
be done on campus, regionally, online--a whole variety of 
methods to train faculty to become quality assessors of prior 
learning, and the number who are able to do this is growing.
    But the second thing we have done is to launch our own 
LearningCounts prior learning assessment national service 
online, and for that we draw on faculty all over the country in 
all the disciplines to do the assessments and they are trained 
by us. Our idea is that this will get the prior learning 
assessment idea to scale, and we work with the colleges and 
universities to make this happen.
    So I think it is both training--awareness-building and 
training and it is the launch of something at a national scale 
that is online. And I think those two ways as well as, 
obviously, working with accreditors and state systems of higher 
education--all of those are going to combine to really bring 
this to national visibility and scale.
    Mrs. Brooks. Are there any states in particular--and I 
apologize if you answered this earlier--that are doing this 
particularly well, and should we, in looking at, you know, 
reauthorization of higher ed reauthorization act, be rewarding 
or incentivizing higher ed institutions in some way?
    Ms. Tate. Well, if you just take one state--I could mention 
many--Tennessee passed a performance funding bill in 2010 that 
gives institutions some additional credit for helping adult 
learners graduate in higher numbers. And a key piece of that 
has been a statewide policy on prior learning assessment that 
all colleges agreed upon.
    We worked with Tennessee over several years to make that 
happen and it is now in place. And that has fostered the 
expansion of prior learning assessment throughout the state. So 
there are others but Tennessee's is linked to a performance 
funding formula.
    Mrs. Brooks. Thank you.
    And thank you all.
    Chairman Kline. Gentlelady's time has expired.
    Mr. Tierney?
    Mr. Tierney. Thank you, Mr. Chairman.
    My colleague, Mrs. Brooks, will be happy to know that we 
have already used the Indiana number so you don't have to 
listen to that litany of direct information. But I do think it 
is worth making the point, as we have been trying to do here 
all morning, that Congress hasn't acted. It is costing students 
around $1,000 more per loan because we haven't acted.
    One of my colleagues, the colleague from Michigan, 
indicated that he is going to sign a petition to get the Senate 
to respond, but the Senate has responded. And what they said is 
they are not interested in taking up the Republican bill 
because, as has been indicated by CBO and others, it would 
actually cost students more than if we just let it double.
    So we need to do something, so my recommendation, my hope 
is that the chairman wouldn't even need the rest of the 
signatures of the three people we are looking for, would just 
take this bill up in committee that we put forth with Mr. 
Courtney, and set the rate at 3.4 percent while we try to work 
within the context of the higher education reauthorization to 
deal with all loans.
    And one of the sticking points on dealing with all loans is 
going to be that many don't believe that it should be a profit 
center, that we don't think the rates ought to go high enough 
to more than cover the cost of the loan and the administration 
and the impossible default rate on that, and the rest going 
down to pay for a deficit the students and their families 
didn't really incur. So we are going to have that debate and it 
is going to be a lot more extensive, but in the interim, in a 
way that doesn't raise the deficit at all, why can't we just 
sign the petition or bring the matter up to pass Mr. Courtney's 
bill and take care of those 7.4 million students and let them 
avoid that burden on that?
    Because what I hear here this morning are some seeds for 
agreement. I mean, I haven't heard a lot of disagreement on--
across the aisle here as we talk forward. People are interested 
in innovation. They are interested in finding ways to decrease 
the cost in that and get people through school quicker but with 
the competencies that they need.
    I had a hearing recently of over 50 educators in New 
England. All were excited about the different things we have 
talked about. As Dr. Roe indicated, some are concerned that it 
might be a standard cost issue with some of the bricks and 
mortar on that, but other schools are saying no because if they 
use this well they will bring in more students and deal with 
the other issue we have is are we graduating enough students 
with these credentials on that. So I think there are ways to 
work out all of that.
    And we have had a lot of questions here this morning so let 
me try to differentiate a little bit. We talked about learning 
assessments on that basis. What about internships, and 
apprenticeships, and work study, other ways--can't we have a 
way of utilizing those tools--work study, apprenticeships, 
internships, in a way that allows students to earn money 
towards their cost of school or whatever at the same time 
getting credit for the experience that they are earning on 
that?
    And, Mr. Smith, I think you are probably not in that field. 
I don't mean to slight you but your testimony was very well 
appreciated on that.
    But Dr. Boughman, and then Dr. Tate, and then Mr. Jenkins, 
if you might address that?
    Ms. Boughman. Yes. Thank you, sir.
    In fact, many of our degree programs are now requiring 
internships, but in fact, providing course credit for those. 
And our board of regents has passed a policy that says at least 
12 credits of the 120 for a college degree is expected to be 
taken outside the classroom. So in fact, our board of regents 
is leading the way in providing this concept that an 
integration of skills and ability as well as classroom learning 
is extremely important.
    Mr. Tierney. Thank you.
    Doctor?
    Ms. Tate. I would just add that colleges and universities 
all over the country in many states are moving in the same 
direction. I am delighted to see that and I think the key is 
ensuring that the assessment of that learning is done by the 
institution and its faculty.
    The same principles apply to the prior learning of adults. 
If the right assessment is done, whether it was through work or 
community service or some other vehicle, if the assessment is 
done then you can certify the learning. And I think both of 
those--they are really complementary in terms of their concept 
about how somebody learned it.
    Mr. Jenkins. So over 90 percent of our students are over 
the age of 25. We serve a--really a nontraditional, working 
student. So with our institution, a lot of times the bookkeeper 
who has been working without a degree in a small laundromat can 
come to WGU and accelerate through their degree program, 
demonstrating the knowledge they have of accounting and 
bookkeeping and reading a balance sheet and those sort of 
things so that they can move forward quickly at a low cost.
    Mr. Tierney. So are all of the higher education 
institutions, in your opinions, currently equipped to make 
those assessments or is there something else needed to assist 
them to be able to do that and encourage them to do it?
    Ms. Tate. I think that faculty are much better at research 
and teaching than they are assessment. And I think that would 
be--you would find that to be true regardless of where you 
look. So I think a major improvement here could be that faculty 
could get increasing training on how to assess learning.
    Mr. Tierney. Thank you.
    Chairman Kline. The gentleman's time has expired.
    Ms. Bonamici?
    Ms. Bonamici. Thank you very much, Mr. Chairman and Ranking 
Member Miller, for holding this hearing today, which is titled, 
``Keeping College Within Reach: Improving Education through 
Innovation.'' And obviously the goal was to tie those together 
but I am actually going to talk about them separately.
    First I want to talk about keeping college within reach, 
and really join with my colleagues in voicing my desire for a 
bipartisan solution to the recent increase in federal student 
loan interest rates. We all know that the public is watching 
us. We need to come up with a solution. Every day we delay is 
letting down students and also, I think, really affecting the 
public's perception of whether Congress can get anything done.
    So I call on my colleagues. Let's support a 1-year 
extension of the 3.4 rate, commit to finding a long-term 
bipartisan solution.
    I wanted to share a little bit of information from my home 
state of Oregon. Our legislative session just ended yesterday, 
in fact, and something happened there--a vote that was, I 
believe, unanimous--certainly bipartisan, but I believe 
unanimous in both chambers.
    Oregon is really taking some innovative steps to making 
college more affordable and they passed a pilot called ``Pay it 
Forward, Pay it Back,'' and its approach to college funding, 
which once the pilot is developed, I think is going to be truly 
groundbreaking. Under this proposal a student could attend a 
state college for free without traditional loans and the state 
covers the tuition, and then once the student graduates he or 
she will be committed to paying back a percentage of his or her 
income to the state for a designated period of time. It is a 
truly progressive--not meaning liberal, but progressive not 
regressive--policy.
    I am going to be watching very closely as they explore this 
pilot because it is something that could truly make a 
difference in the lives of students and pay for itself. Pay it 
Forward, Pay it Back.
    So when we talk about keeping college within reach I think 
we do need to think big and think outside the box and look at 
innovative ways that we can reach the needs of ours students. 
We have heard the words ``crisis'' today and too many 
economically disadvantaged children are not able to attend 
college, so let's think big on that.
    Now I want to turn to the Improving Education through 
Innovation portion of the title, and yes, this is about 
improving education through innovation and innovation can mean 
a lot of different things, from online learning to more 
technology in education. Whatever approach we pursue--and I 
reviewed your testimony; apologize I couldn't be here when you 
delivered it orally--I think we need to recognize the 
importance of developing some very critical skills that are 
really important to someone thriving, especially in a business 
community, but in a global marketplace, and those skills are 
written and oral communication, teamwork and collaboration, and 
critical thinking.
    So could you discuss a bit about how online learning 
affects, whether it be the ability to communicate written and 
oral, what does that do to critical thinking, and especially 
the teamwork and collaboration that are so necessary in today's 
business world?
    Any of you can start. I would like to hear from all of you 
on that issue.
    Ms. Boughman. Let me start, and thank you very much. And 
we, too, will be watching Oregon very carefully on the Pay it 
Forward, Pay it Back process.
    In both the blended classroom learning and in the way we 
are moving to online learning with interactions and constant 
feedback loops with students as well as project-based learning 
rather than individual problem sets and quizzes--moving to 
group-based activities--we believe that we are addressing some 
of the deficits that we have had in providing these interaction 
skills and oral and written communication skills as we prepare 
our students to move forward.
    So especially in the blended classroom learning situation I 
think we are doing a much better job than we have in the past.
    Ms. Bonamici. Thank you.
    I see other heads nodding.
    Mr. Jenkins. So, as Dr. Tate mentioned in the last 
response, a lot of institutions when you look at the 
institution and want to see how they do assessment, at the 
institutional level it probably could fit at a table this size.
    At WGU we have hundreds of faculty who think every day 
about how do you measure things like critical thinking skills? 
How do you--what is the best type of assessment to deploy in a 
particular competency in order to measure that type of skill? 
Is it a video presentation that is then reviewed according to a 
rubric? Is it a team experience? Is it a different type of 
model?
    So the online experience, I can tell you, is as intimate a 
learning experience as you would get in a traditional 
classroom, and in some cases it is higher quality.
    Ms. Bonamici. Thank you.
    Dr. Tate, did you want to add to----
    Ms. Tate. Yes. I just wanted to add that--or reinforce the 
fact that when people are learning online it does not mean that 
they are learning in isolation. What in fact is happening is 
what you are hearing, and that is that everyone is finding ways 
to make it interactive, collaborative, and when we are dealing 
with adult learners, who is our focus, they tend to bring a lot 
of that collaborative teamwork from their work experience and 
add to it their own--their--the subject matter expertise that 
they have to gain through a formal college experience.
    Chairman Kline. The gentlelady's time has expired.
    We assembled a top-notch panel. The bar was really high for 
expectations and you certainly didn't disappoint.
    Let me yield to Mr. Miller for any closing remarks he has.
    Mr. Miller. Chairman, I want to second your remarks. I just 
think this has been an outstanding panel and I would like to 
pick your brains when we are done with the formal hearing here.
    In reading some material sort of getting ready for the 
Higher Education Act and this hearing, two people--Dr. Bowen, I 
think it is, a former president of Princeton, and Mark Bicturn, 
is it, yes--you know, they both sort of talk about the staying 
power of the universities, that we can get flip and suggest 
that we just don't need them anymore, they are going to be gone 
and all of this is going to succeed and replace them.
    And I was also reading a speech given a year or so ago by 
the president of Indiana University, McRobbie, McRobbie--I am 
sorry, I am bad with names--and he also talked about just the 
fundamental change that that entity has to make to accommodate 
much of what you presented to them through your various 
institutions and your proposals and your ideas on how we 
integrate this learning as opposed to teaching into the 
universities and into American society through various--and, 
Ms. Boughman, you are kind of at the center of this for a major 
university and I just--there is a lot of tension here but I 
guess I do respect an institution that has been around since 
400 B.C. in one form or another in a variety of different 
countries at different times--its staying power.
    But all this we change here to the benefit of our 
constituents--American families, students, however you want to 
describe it, is really remarkable--the potential that is 
sitting here on the edge of the university, and how do you 
integrate that and still keep a viable institution that I think 
is important to American culture?
    Ms. Boughman. I would agree wholeheartedly with you. And 
one of the joys that I have is to have the diverse set of 
institutions that we have working with us, from the totally 
online UMUC through our HBCUs to University of Maryland College 
Park and others that are research one universities.
    We believe we do have a challenge and we do need to be held 
accountable for making it worth it to make the choice to come 
to a 4-year campus for 4 years or to, in fact, choose a 
different path that would lead to a viable degree to move on in 
the world. And I think part of the issue is making that choice 
known, making that diversity well worth it.
    And each student--some of the older students would be 
different, but every student is going to have a different 
pathway that would fit best for them and we believe that our 
universities will have much to give to students to enrich their 
lives.
    Mr. Miller. But you are starting to become a facilitator, 
an integrator, but you also have to become a change agent on 
campus----
    Ms. Boughman. Right.
    Mr. Miller [continuing]. And that seems to be a place where 
there is a lot of tension holding back the opportunity that is 
presented by these--all of your institutions. How do you 
conquer that?
    Ms. Boughman. There is a great deal of inertia, if you 
will. It has worked for us for many years; why won't it 
continue to work? What we are finding is evidence does change 
minds, so that the processes that we are going through in 
comparing things side by side, when we show improved student 
success and learning on the part of the faculty, as well, gives 
us better results at a lower cost, other faculty will listen 
and are engaging.
    So there is a tide that is rolling out there and we will, I 
think, eventually change a lot of minds about the way we can 
adapt to new methodologies in teaching.
    Mr. Miller. Well, thank you very much.
    Thank you, Mr. Chairman. This has been a fascinating 
morning on this topic.
    Chairman Kline. I thank the gentleman.
    Again, I want to thank the panel for just excellent 
presentation. A lot of innovative ideas. You are doing a lot of 
great stuff. You represent a great diversity in institutions 
and ideas.
    We did have an awful lot of discussion today about student 
loans. Was an interesting approach from my colleagues.
    Sometimes they forget that we passed legislation out of 
this committee--bipartisan legislation--and we passed 
legislation on the floor of the House--bipartisan legislation--
to tie student loan interest rates to the market using the 10-
year Treasury in an essentially budget-neutral way; and we have 
a proposal from the White House that ties student loans 
interest rates to the 10-year Treasury in an essentially 
budget-neutral way; we have a bipartisan proposal in the Senate 
to tie student loan interest rates to the 10-year Treasury in 
an essentially budget-neutral way.
    All the elements are there to get this thing solved for the 
long time. We have had more than a year of knowing that these 
interest rates were going to double from 3.4 to 6.8 percent if 
we didn't adopt a long-term solution. That is what we are 
trying to do. We are going to continue to try to do that, get 
the Senate to take up one of their excellent proposals over 
there and pass it.
    Again, I want to thank the panelists. You have been 
absolutely excellent.
    There being no further business, the committee stands 
adjourned.
    [Questions submitted for the record and their responses 
follow:]

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       Mr. Jenkins Response to Questions Submitted for the Record

                               mr. kline
    1. How are tuition rates set in a competency-based model? How does 
that fit in with the current distribution system of federal financial 
aid?

    Theoretically, there are numerous different tuition models that 
might work with competency-based education, and that is another key 
reason to authorize a demonstration project. At WGU, tuition is set at 
a flat rate for each 6-month term. Students may register for as many 
courses as they can successfully complete for this flat rate. However, 
to be considered full time for financial aid, undergraduate students 
must enroll in a minimum of 12 competency units per term (competency 
units are roughly equivalent to credit hours). This motivates students 
to go faster, and because students can complete more courses at a 
faster rate, the degree costs less and costs the federal government 
significantly less in financial aid.
    In a competency-based model like WGU, tuition is not billed on a 
per credit hour basis. This means there are a minimum amount of courses 
that can be completed but not a maximum. This type of model does not 
fit well within the current federal financial aid system. For example, 
by its nature, competency-based education does not have standard terms. 
The current system assumes a certain number of ``credit-hours'' up 
front. It doesn't envision open-ended systems that let students add 
courses prior to the end of the term.

    2. What are the incentives for institutions and employers to accept 
or move to a competency-based or prior learning framework over a credit 
hour based framework?

    It is important to clarify the distinction between competency-based 
and prior learning frameworks in order to gain a correct understanding 
of the differences in these two models. Prior learning models assign 
credit for an entire course based on an evaluation of a student's prior 
experience. It typically occurs at the front end of the course of 
study. Competency-based models are on the back end and are much more 
granular in measuring student learning. It allows students to apply 
what they know at the competency level, not the course level. All 
students have to take the same assessments and demonstrate mastery of 
the competency.
    For institutions, generally speaking, there are several 
disincentives for embracing a competency-based education model. These 
include:
    1. Students are encouraged and more likely to finish early. 
Accelerating time to degree will negatively impact tuition resources 
and financial aid eligibility.
    2. Institutions and faculty are made much more accountable for 
student learning outcomes which they typically resist.
    Employers often complain that graduates aren't prepared for the 
workforce. Competency-based education offers some distinct benefits:
     Competency-based graduates have demonstrated mastery of a 
standard body of knowledge, and they have done so by passing each 
course with the equivalent of a B or better. This assures employers 
that the graduates they hire are well prepared for their jobs.
     WGU improves on the standard model because required 
competencies and curriculum for all WGU degree programs are developed 
in collaboration with industry representatives, helping ensure that the 
students are learning what employers need and that courses are relevant 
and up to date.
     Tuition at WGU is very affordable, which is important for 
employers who provide tuition reimbursement.
     With competency-based learning at WGU, the average time to 
complete a bachelor's degree is about 35 months, significantly shorter 
than the national average of 52 months, saving both time and money.
                               mrs. foxx
    1. What benchmarks are put in place to ensure students, who are 
receiving federal financial aid, are actually making progress and not 
simply faltering on the same competency over and over again?

    Students are required to enroll in a minimum number of competency 
units (equivalent to semester credits) within a 6-month term to 
maintain their financial aid eligibility. The minimum for full-time 
status for undergraduates is 12 competency units; for graduate 
students, the minimum is 8 competency units. Students must successfully 
complete two-thirds of attempted courses to be making satisfactory 
progress; otherwise, they lose eligibility for financial aid. To 
complete a course, students must pass a performance or an objective 
assessment, which may include tactical examinations for nurses, 
demonstration teaching internship, proctored objective tests or papers, 
presentations, projects, etc. Students must earn the equivalent of a B 
or better. Students earn competency units when they successfully 
complete the corresponding assessments. In addition, WGU imposes limits 
on the number of assessment attempts by students.

    2. What support services does WGU provide for struggling students? 
Can you explain the mentor's role in more detail?

    WGU's faculty model is completely focused on student success, and 
the faculty support provided is individualized to meet students' needs. 
Upon enrollment, each student is assigned a Student Mentor, who will 
work with the student one-on-one until graduation. Student Mentors, who 
have a minimum of a master's degree in their field as well as relevant 
work experience, speak with their students weekly and are in constant 
contact with them, helping them plan and schedule their studies, 
solving problems, and providing support.
    In addition to Student Mentors, WGU has Course Mentors, who are 
subject matter experts for each course. These mentors, most with PhDs, 
work with students as they move through their courses, leading learning 
communities, answering questions, and even tutoring by telephone if 
needed.
    A separate and independent faculty group performs grading and 
evaluation. When assessments are submitted for evaluation, it is 
anonymous, which helps eliminate bias and enhances objectivity. In 
addition, using a separate group of evaluators, rather than mentors, 
allows mentors to focus on helping students learn and succeed.
    The efficacy of this unique faculty role is reflected in the 
National Study of Student Engagement (NSSE) where WGU students report 
having better relationships with faculty, spending more time on 
academic work, applying more higher-order thinking skills, and feeling 
higher overall satisfaction than the national average.
    Additionally, students are part of learning communities, where they 
interact with faculty and other students. Using learning analytics to 
identify struggling students and target mentor support, these students 
receive additional support from mentors. In addition, there are mentors 
dedicated to helping students who are struggling with math and writing, 
all available with extended hours.
    WGU also provides a service called WellConnect for all of our 
students. WellConnect provides mental health counseling, legal 
counseling, and other services aimed at helping students solve problems 
that could interfere with their progress toward a degree. Finally, WGU 
has a student services office designed to quickly resolve any student 
issue. Examples include: financial aid, a concern with faculty/mentor, 
assessment results, or other administrative question that the student 
is having difficulty addressing on their own.
                               mr. polis
    In your testimony you say that one of the best ways to spur 
innovation would be for Congress to authorize a demonstration project 
for competency-based learning similar to the demonstration project 
authorized by Congress for distance learning. How are WGU's efforts 
obstructed by the current framework of higher education, specifically 
when it comes to offering financial aid and providing a flexible 
academic calendar? Can you tell us more about how the demonstration 
project would help mitigate these concerns? Some have argued that the 
department already has the necessary authority to operate this 
demonstration project. Can you please elaborate on this?

Demonstration program
    Technically, the Department of Education may have the authority to 
waive certain regulations to support competency-based education. 
Unfortunately, the proof that this authority is not adequate to change 
behavior is that in seven years since it has been granted direct 
assessment authority, it has approved only one program. Also, some 
argue that the Department of Education could use its authority to 
establish an experimental site. No institution has applied to do this, 
and this is probably because the Department has indicated that it would 
take up to two years to gain approval. Finally, the Department has 
indicated a burdensome cost concern that appears to make it hesitant to 
move forward. All of these concerns and current realities are assumed 
and explored within the competency-based demonstration project. So 
while the Department, in a perfect environment, might have the 
authority to pursue this innovative approach, it has failed to do so. 
That is why Congress should direct and empower the Department of 
Education to conduct this necessary project.
    More than 37 million Americans have some college but no degree. 
This incredibly deep talent supply has only superficially been tapped 
with competency-based programs like WGU. The current legal and 
regulatory environment is simply too inhospitable to support the 
creation and logical expansion of these types of programs.
    There is no objective way under current law that Title IV Student 
Financial Assistance can accommodate competency-based education models 
effectively and efficiently enough to encourage this vital sector to 
flourish. For example, certain satisfactory progress requirements do 
not promote or encourage students to accelerate time to degree 
completion. Instead, these rules act as a disincentive for students to 
extend their efforts by attempting considerably more competency units. 
This is because there are punitive consequences if ``attempted versus 
completed'' does not meet the minimum federal requirement.
    Passage by Congress as quickly as possible of a Competency-Based 
Education Demonstration Program will allow the Secretary of Education 
to waive specified statutory and regulatory requirements under Title IV 
and allow for a controlled demonstration program that will allow 
Congress and the Department to better understand the statutory and 
regulatory changes that need to be made to allow greater acceptance of 
competency-based higher education.
    We suggest that the following statutes and regulations are the most 
toxic and disabling to existing and potential programs, and Congress 
should empower the Secretary to waive for those institutions selected 
for the Competency-based Demonstration Project.
    The requirements of sections 481(a) and 481(b) as such sections 
relate to requirements for a minimum number of weeks of instruction, 
sections 102(a)(3)(A), 102(a)(3)(B), and 484(l)(1), section 
668.32(a)(1)(iii) of title 34, Code of Federal Regulations, as it 
relates to courses leading to teacher certification, or one or more of 
the regulations prescribed under this part or part F which inhibit the 
operation of competency-based education programs. In addition to the 
waivers described above, for institutions that propose a rational and 
defensible plan for competency-based education and for the waivers 
being sought, the Secretary may waive any of the requirements under 
sections (and corresponding regulations) in title I, part F of this 
title, and this part, that inhibit the operation of competency-based 
education programs, including requirements that relate to:
    (A) documenting attendance;
    (B) weekly academic activity;
    (C) minimum weeks of instructional time;
    (D) requirements for credit hour/clock hour equivalencies;
    (E) requirements for substantive interaction with faculty;
    (F) definitions of the terms `academic year', `full-time student', 
`term' (including `standard term', `non-term', and `non-standard 
term'), `satisfactory academic progress' (SAP), `educational activity', 
`program of study' and `payment period'.
                                 ______
                                 
    [Whereupon, at 12:24 p.m., the committee was adjourned.]