[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
KEEPING COLLEGE WITHIN REACH: STRENGTHENING PELL GRANTS
FOR FUTURE GENERATIONS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HIGHER EDUCATION
AND WORKFORCE TRAINING
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. House of Representatives
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, DECEMBER 3, 2013
__________
Serial No. 113-40
__________
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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 Rubeen 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 Rauul 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 Frederica S. Wilson, Florida
Joseph J. Heck, Nevada Suzanne Bonamici, Oregon
Susan W. Brooks, Indiana Mark Pocan, Wisconsin
Richard Hudson, North Carolina
Luke Messer, Indiana
Juliane Sullivan, Staff Director
Jody Calemine, Minority Staff Director
------
SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE TRAINING
VIRGINIA FOXX, North Carolina, Chairwoman
Thomas E. Petri, Wisconsin Rubeen Hinojosa, Texas,
Howard P. ``Buck'' McKeon, Ranking Minority Member
California John F. Tierney, Massachusetts
Glenn Thompson, Pennsylvania Timothy H. Bishop, New York
Tim Walberg, Michigan Suzanne Bonamici, Oregon
Matt Salmon, Arizona Carolyn McCarthy, New York
Brett Guthrie, Kentucky Rush Holt, New Jersey
Lou Barletta, Pennsylvania Susan A. Davis, California
Joseph J. Heck, Nevada David Loebsack, Iowa
Susan W. Brooks, Indiana Frederica S. Wilson, Florida
Richard Hudson, North Carolina
Luke Messer, Indiana
C O N T E N T S
----------
Page
Hearing held on December 3, 2013................................. 1
Statement of Members:
Foxx, Hon. Virginia, Chairwoman, Subcommittee on Higher
Education and Workforce Training........................... 1
Prepared statement of.................................... 3
Hinojosa, Hon. Rubeen, ranking minority member, Subcommittee
on Higher Education and Workforce Training................. 4
Prepared statement of.................................... 5
Statement of Witnesses:
Dannenberg, Michael, director of higher education and
education finance policy, the Education Trust.............. 52
Prepared statement of.................................... 54
Draeger, Justin S., president, National Association of
Student Financial Aid Administrators (NASFAA).............. 6
Prepared statement of.................................... 9
Heath, Richard C., director, student financial services, Anne
Arundel Community College, Arnold, MD...................... 61
Prepared statement of.................................... 64
Robinson, Jenna Ashley, Ph.D., John W. Pope Center for Higher
Education Policy........................................... 27
Prepared statement of.................................... 29
Additional Submissions:
Mr. Draeger:
Appendix A: NASFAA History of Federal Methodology and
Pell Changes........................................... 18
Appendix B: NASFAA Reimagining Aid Design and Delivery
(RADD) report, Internet address to..................... 27
Appendix C: NASFAA A Tale of Two Incomes: Comparing
Prior-Prior Year and Prior-Year through Pell Grant
Awards, Internet address to............................ 27
Mr. Hinojosa:
The American Indian Higher Education Consortium, prepared
statement of........................................... 94
KEEPING COLLEGE WITHIN REACH: STRENGTHENING PELL GRANTS
FOR FUTURE GENERATIONS
----------
Tuesday, December 3, 2013
U.S. House of Representatives
Subcommittee on Higher Education and Workforce Training
Committee on Education and the Workforce
Washington, DC
----------
The subcommittee met, pursuant to call, at 10:00 a.m., in
room 2175, Rayburn House Office Building, Hon. Virginia Foxx
[chairman of the subcommittee] presiding.
Present: Representatives Foxx, McKeon, Thompson, Walberg,
Guthrie, Heck, Brooks, Hudson, Messer, Hinojosa, Tierney,
Bishop, Bonamici, Holt, Davis, Loebsack, and Wilson.
Also present: Representative Kline.
Staff present: James Bergeron, 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; Daniel Murner, Press Assistant;
Krisann Pearce, General Counsel; Nicole Sizemore, Deputy Press
Secretary; Emily Slack, Legislative Assistant; Alex Sollberger,
Communications Director; Alissa Strawcutter, Deputy Clerk;
Tylease Alli, Minority Clerk/Intern and Fellow Coordinator;
Jody Calemine, Minority Staff Director; Eamonn Collins,
Minority Fellow, Education; Jamie Fasteau, Minority Director of
Education Policy; Eunice Ikene, Minority Staff Assistant; Julia
Krahe, Minority Communications Director; Megan O'Reilly,
Minority General Counsel; Rich Williams, Minority Education
Policy Advisor; and Michael Zola, Minority Deputy Staff
Director.
Chairwoman Foxx. A quorum being present, the subcommittee
will come to order. Good morning. Thank you for joining us for
our hearing on the Pell Grant program. We have an excellent
panel of witnesses here this morning, and we look forward to
their testimony.
This hearing is the 11th in a series designed to gain a
more complete understanding of the challenges facing
postsecondary students and institutions. The hearings help to
inform the committee of policy changes that should be
considered as part of the upcoming reauthorization of the
Higher Education Act, we abbreviate HEA.
Over the last year, these hearings have provided a forum to
discuss opportunities to encourage innovation, increase
transparency, enhance data collection and improve college
access and affordability. We have been fortunate to hear from a
number of expert witnesses whose testimony and insight will
provide invaluable as we begin crafting legislation next year
to strengthen America's higher education system through HEA
reauthorization.
With roughly 71 percent of undergraduates receiving some
form of federal financial aid, simplifying the complex system
of grants, loans and institutional support programs remains a
central goal in our reauthorization efforts.
Just last month, the committee discussed proposals to help
streamline student aid programs. Today, we will build on that
conversation by examining the Pell Grant program, which many
consider to be the cornerstone of federal student aid.
When the Pell Grant program began in the early 1970s, its
central focus was providing financial assistance to help low-
income students access higher education. In its first year, the
program provided aid to 176,000 students. Since then, Pell has
grown dramatically. Today, more than 9 million students are
Pell Grant recipients.
The sharp rise in Pell participation in more recent years
has been attributed to several factors. One is the economic
recession, which spurred many individuals to go back to school
to learn skills needed to compete for today's jobs. Also,
Washington policymakers passed legislative changes to Pell to
increase the program's maximum grant award and weaken student
eligibility requirements, allowing more students to receive
larger Pell Grant awards.
Since the program guarantees aid to any student who meets
the eligibility criteria, enrollment spikes threaten the Pell
program's long-term fiscal viability.
Pell is one of the federal government's largest education
expenditures, costing taxpayers about $30 billion a year. As
with every federal program, especially one with such a hefty
price tag, Washington leaders have a responsibility to ensure
the Pell Grant program is effective. There is concern among
members of the higher education community and many of my
colleagues in Congress that Pell has strayed too far from its
original intent.
With such a large recipient pool, some worry the program
could eventually become insoluble, leading to a lack of funds
for our neediest students. Budget experts have projected multi-
million dollar funding gaps, raising additional questions about
whether the program's current structure is fiscally
responsible. Recognizing the Pell Grant program is on an
unsustainable path, leaders in higher education, business, and
public policy have begun circulating proposals for reform.
One proposed first step to strengthen the program is to
simplify the Pell Grant application process. It has been
suggested that instead of forcing families to complete
overwhelming amounts of paperwork, a more streamlined process
would better inform students of their options and generate a
more accurate reflection of their financial needs.
Additional proposals suggest tightening eligibility
requirements, increasing grant flexibility, and implementing
accountability measures to ensure the program is not only
helping the neediest students enroll in college, but is also
rewarding and encouraging those who make progress toward
completion.
When hard-working taxpayer money is being spent, taxpayers
deserve accountability, which means that it is critical that we
have the information necessary to know what is and is not
working in the Pell program. The Pell Grant program has become
the epicenter of our nation's financial aid system, and we all
want to make sure it meets its targets of supporting low-income
students who wish to earn a college degree. However, we must
also be honest about the challenges facing the program and work
together in good faith to enact smart policy changes that will
help get the program back on stable ground.
We have a great panel of witnesses with us today, and I
look forward to hearing their thoughts on ways we can
strengthen the Pell Grant program through our upcoming
reauthorization of the Higher Education Act.
I am now pleased to recognize my colleague, Mr. Rubeen
Hinojosa, the senior Democrat member of the subcommittee, for
his opening remarks.
[The statement of Chairwoman Foxx follows:]
Prepared Statement of Hon. Virginia Foxx, Chairwoman, Subcommittee on
Higher Education and Workforce Training
Good morning. Thank you for joining us for our hearing on the Pell
Grant program. We have an excellent panel of witnesses here this
morning, and we look forward to their testimony.
This hearing is the eleventh in a series designed to gain a more
complete understanding of the challenges facing postsecondary students
and institutions. The hearings help to inform the committee of policy
changes that should be considered as part of the upcoming
reauthorization of the Higher Education Act.
Over the last year these hearings have provided a forum to discuss
opportunities to encourage innovation, increase transparency, enhance
data collection, and improve college access and affordability. We have
been fortunate to hear from a number of expert witnesses whose
testimony and insight will prove invaluable as we begin crafting
legislation next year to strengthen America's higher education system
through HEA reauthorization.
With roughly 71 percent of undergraduates receiving some form of
federal financial aid, simplifying the complex system of grants, loans,
and institutional support programs remains a central goal in our
reauthorization efforts. Just last month the committee discussed
proposals to help streamline student aid programs. Today we will build
on that conversation by examining the Pell Grant program, which many
consider to be the cornerstone of federal student aid.
When the Pell Grant program began in the early 1970s, its central
focus was providing financial assistance to help low-income students
access higher education. In its first year, the program provided aid to
176,000 students. Since then, Pell has grown dramatically; today more
than 9 million students are Pell Grant recipients.
The sharp rise in Pell participation in more recent years has been
attributed to several factors. One is the economic recession, which
spurred many individuals to go back to school to learn skills needed to
compete for today's jobs. Also, Washington policymakers passed
legislative changes to Pell to increase the program's maximum grant
award and weaken student eligibility requirements--allowing more
students to receive larger Pell Grant awards.
Since the program guarantees aid to any student who meets the
eligibility criteria, enrollment spikes threaten the Pell program's
long-term fiscal viability. Pell is one of the federal government's
largest education expenditures, costing taxpayers about $30 billion a
year. As with every federal program, especially one with such a hefty
price tag, Washington leaders have a responsibility to ensure the Pell
Grant program is effective.
There is concern among members of the higher education community
and many of my colleagues in Congress that Pell has strayed too far
from its original intent. With such a large recipient pool, some worry
the program could eventually become insoluble, leading to a lack of
funds for our neediest students. Budget experts have projected multi-
million dollar funding gaps, raising additional questions about whether
the program's current structure is fiscally responsible.
Recognizing the Pell Grant program is on an unsustainable path,
leaders in higher education, business, and public policy have begun
circulating proposals for reform. One proposed first step to strengthen
the program is to simplify the Pell Grant application process. It has
been suggested that instead of forcing families to complete
overwhelming amounts of paperwork, a more streamlined process would
better inform students of their options and generate a more accurate
reflection of their financial needs.
Additional proposals suggest tightening eligibility requirements,
increasing grant flexibility, and implementing accountability measures
to ensure the program is not only helping the neediest students enroll
in college, but is also rewarding and encouraging those who make
progress toward completion. When hardworking taxpayer money is being
spent, taxpayers deserve accountability which means that it is critical
that we have the information necessary to know what is and is not
working in the Pell program.
The Pell Grant program has become the epicenter of our nation's
financial aid system and we all want to make sure it meets its target
of supporting low-income students who wish to earn a college degree.
However, we must also be honest about the challenges facing the program
and work together in good faith to enact smart policy changes that will
help get the program back on stable ground.
We have a great panel of witnesses with us today, and I look
forward to hearing their thoughts on ways we can strengthen the Pell
Grant program through our upcoming reauthorization of the Higher
Education Act. I now am pleased to recognize my colleague, Mr. Rubeen
Hinojosa, the senior Democrat member of the subcommittee, for his
opening remarks.
______
Mr. Hinojosa. Thank you, Chairwoman Foxx. Today's hearing
is an opportunity to discuss ways in which Congress can
strengthen the federal Pell Grant program, not to weaken it. I
remember the 8 years during the George W. Bush administration,
the Pell Grant hovered at about $3,000 to $3,400 a year and,
often times, cutting it at least 50 percent to try to get more
money to go to the war in Iraq. I was not happy with that. We
fought and got it back up to $3,000.
In the past several years, Democrats have fought to make
college more affordable by increasing the Pell Grant award by
at least $1,600, from $4,050 in 2006 to $5,645 in 2014,
allowing it to increase yearly with inflation.
Before we hear from our distinguished panel of witnesses, I
want to underscore the importance of the federal Pell Grant
program in advancing college access and affordability. Serving
approximately 9 million hard-working students, the federal Pell
Grant program is the single largest source of federal grant aid
which supports college students.
According to the presidents and the chancellors who came to
visit me during the period that I was chairman of this
committee, they said that those were the highest priorities
they had--and that was to make higher education affordable and
accessible, and that we should look very carefully at
increasing the Pell Grant.
Without a doubt, Pell grants are expanding access for low-
income students and students of color. An estimated 92 percent
of Pell Grant recipients have family incomes below the national
median of $51,800. More than 60 percent of African-American
undergraduates and half of the Latino undergraduates rely on
Pell grants to afford the cost of a college degree.
Pell grants strengthen our economy and boost workforce
productivity. We know that a college degree can dramatically
increase employment and wages, and move low-income students
into the middle class. While I am proud of the federal
investments that Congress has made in the federal grant program
in the recent years through the passage of Student Aid and
Fiscal Responsibility Act of 2010, known as SAFRA, and the
College Cost Reduction and Excess Cost of 2007, I know that
Congress can do much more to support college access and
success.
Unfortunately, recent budget agreements have reduced the
Pell Grant funding by more than $50 billion, by cutting
hundreds of thousands of students from the program. Many other
changes slashed other federal student aid programs to fund the
Pell Grant program. We can do better than robbing Peter to pay
Paul.
Moving forward, the Republican majority wants to eliminate
hundreds of thousands, if not millions, more students from the
Pell Grant program. The Republican-passed budget would do
exactly that, by cutting $98 billion from that program alone.
To be sure, students and families continue to struggle to
afford the cost of a college degree. Skyrocketing college costs
in recent years have eroded the purchasing power of the Pell
Grant, forcing Pell Grant recipients to increase their reliance
on student loans. Next year's maximum Pell Grant award of
$5,785 will cover the smallest share of college costs since the
start of the program. It is troubling to me to know that Pell
Grant recipients are already more than twice as likely as other
students to have student loans.
In closing, I want to say that as Congress is working to
reauthorize the Higher Education Act, I urge my colleagues on
both sides of the aisle to evaluate the Pell Grant as a piece
of the larger budget discussions, and not limit themselves to
solving short-term funding problems with long-lasting cuts to
student aid.
And with that, Madam Chair, I yield back.
[The statement of Mr. Hinojosa follows:]
Prepared Statement of Hon. Rubeen Hinojosa, Ranking Member,
Subcommittee on Higher Education and Workforce Training
Thank you, Chairwoman Foxx.
Today's hearing is an opportunity to discuss ways in which Congress
can strengthen the federal Pell Grant program, not weaken it. In the
past several years, Democrats have fought to make college more
affordable by increasing the maximum Pell Grant award by $1,600, from
$4,050 in 2006 to $5,645 in 2014, allowing it to increase yearly with
inflation.
Before we hear from our distinguished panel of witnesses, I want to
underscore the importance of the federal Pell Grant program in
advancing college access and affordability.
Serving approximately nine million hard working students, the
federal Pell grant program is the single largest source of federal
grant aid, which supports college students.
Without a doubt, Pell Grants are expanding access for low-income
students and students of color. An estimated 92% of Pell Grant
recipients have family incomes below the national median of $51,800.
More than 60% of African American undergraduates and half of Latino
undergraduates rely on Pell grants to afford the cost of a college
degree.
Pell grants strengthen our economy and boost workforce
productivity. We know that a college degree can dramatically increase
employment and wages and move low-income students into the middle
class.
While I am proud of the federal investments the Congress has made
in the Pell Grant program in recent years through the passage of
Student Aid and Fiscal Responsibility Act of 2010 (SAFRA), and the
College Cost Reduction and Access Act of 2007, I know that Congress can
do much more to support college access and success.
Unfortunately, recent budget agreements have reduced Pell Grant
funding by more than $50 billion by cutting hundreds of thousands of
students from the program. Many other changes slashed other federal
student aid programs to fund the Pell grant program. We can do better
than `robbing Peter to pay Pell.'
Moving forward, the Republican majority wants to eliminate hundreds
of thousands, if not millions, more students from the Pell program. The
Republican passed budget would do exactly that by cutting $98 billion
from the program alone.
To be sure, students and families continue to struggle to afford
the cost of a college degree. Skyrocketing college costs in recent
years have eroded the purchasing power of the Pell grant, forcing Pell
grant recipients to increase their reliance on student loans.
Next year's maximum Pell grant award of $5,785 will cover the
smallest share of college costs since the start of the program. It is
troubling to know that Pell Grant recipients are already more than
twice as likely as other students to have student loans.
As Congress works to reauthorize the Higher Education Act, I urge
my colleagues to value the Pell program as a piece of the larger budget
discussions and not limit themselves to solving short-term funding
problems with long lasting cuts to student aid.
With that, I yield back.
______
Chairwoman Foxx. Thank you, Mr. Hinojosa. Pursuant to
committee rule 7(c), all subcommittee members will be permitted
to submit written statements to be included in the permanent
hearing record. And without objection, the hearing record will
remain open for 14 days to allow statements, questions for the
records, and other extraneous material referenced during the
hearing to be submitted in the official record.
It is now my pleasure to introduce our distinguished panel
of witnesses. Mr. Justin Draeger serves as the president and
chief executive officer of the National Association of Student
Financial Aid administrators. Dr. Jenna Ashley Robinson is the
director of outreach at the John W. Pope Center for Higher
Education Policy, a non-profit institute dedicated to improving
higher education in North Carolina and the nation. Mr. Michael
Dannenberg serves as the director of higher education and
education finance policy at the Education Trust. Mr. Richard
Heath is currently the financial aid director at Anne Arundel
Community College, a public 2-year institution located in
Arnold, Maryland.
Before I recognize you to provide your testimony, let me
briefly explain our lighting system. You will have five minutes
to present your testimony. When you begin, the light in front
of you will turn green. When one minute is left, the light will
turn yellow. When your time is expired, the light will turn
red. At that point, I ask that you wrap up your remarks as best
as you are able. After you have testified, members will each
have five minutes to ask questions of the panel.
I now recognize Mr. Justin Draeger for five minutes.
STATEMENT OF JUSTIN DRAEGER, PRESIDENT AND CEO, NATIONAL
ASSOCIATION OF STUDENT FINANCIAL AID ADMINISTRATORS
Mr. Draeger. Thank you, Chairwoman Foxx, Ranking Member
Hinojosa, and members of the committee. As has been said, my
name is Justin Draeger from the National Association of Student
Financial Aid Administrators. We represent colleges and
universities across the country. NASFAA member institutions
serve 90 percent of all federal student aid recipients.
I am grateful to be able to talk to you about the Pell
Grant program which, has been pointed out, serves 9 million
students annually and over its 41-year history has benefited
over 60 million students. The program is well-targeted in that
85 percent of recipients have family incomes of less than
$40,000.
Fifty percent of those receiving Pell grants have family
incomes of less than $20,000, and it is weighted towards those
with the least resources. Seventy percent of Pell recipients
are receiving the maximum award for their enrollment status.
The Pell Grant program, of course, evolved out of the Basic
Educational Opportunity Grant, or BEOG, in 1972. And the goal
was very simple. It was to provide every qualified student with
access to a postsecondary degree. And in 1980, BEOG was renamed
Pell in honor of Senator Claiborne Pell of Rhode Island, a
long-time champion of higher education access.
In its early days, BEOG provided nearly universal access to
postsecondary education. Its original grant of $1,400 covered
approximately 70 percent of the cost of attendance at a 4-year
school, and grew over the next couple years to cover 85 percent
of the cost of attendance at a four-year public.
While the maximum grant has gone from $1,400 to now over
$5,600, it now only covers about 35 percent of the cost of
attendance at a four-year public school. Over that time, the
numbers of students and total amount spent on the program have
also increased dramatically. And I have included in my remarks
dollar amounts and a list of eligibility requirement changes
that have been made in recent years for your reference.
The higher education landscape is also quite different from
when BEOG was first created, including the large-scale growth
in the non-traditional student population, where non-
traditional students have now become the traditional student;
the need and amount of developmental and remedial education
that is being required in higher education; the rapid expansion
of innovative learning models; and the need in enrollment in
vocational education; not to mention the increased scrutiny on
student outcomes, most notably highlighted by the President's
recent proposals to tie student aid to student outcomes at the
institutional level.
With that changing landscape in mind, I would like to offer
the committee three suggestions for Pell reform. The first one
is to provide a Pell Promise as an early commitment program,
from the government to students, early in high school. This
type of program has been successful in state-run programs and
has been shown to change student behavior, helping them make
smarter decisions in secondary education to prepare for
college. In Indiana, for example, the number of students
matriculating to college increased by nearly 90 percent over
one generation over 18 years due to an early-commitment 21st
century scholars program.
The disparity between college enrollment of low-income and
upper-income families is quite staggering. And when researched,
most low-income students either do not prepare or do not attend
college because they didn't know or they didn't believe that
student aid funding would be available to them. In many
instances, data showed that the lack of knowledge or confidence
that funds would be there for them leads low-income students to
inadvertently choose schools that may be more expensive or that
doesn't match--best match their academic preparedness. And this
is sometimes called ``under-matching.''
Second would be to provide students a Pell Well funds that
they could draw from as needed until the student completed
their program or simply ran out of eligibility. This program
would eliminate the gaps students face when they run out of
Pell eligibility each summer after taking Pell during the fall
and winter. It would also match up nicely with some of the new,
innovative learning models that are being introduced, prior
learning assessments and competency-based education programs.
Such a program would be best suited if we moved to a prior-
prior year assessment of a student or family's ability to pay
for college as opposed to what we use now, which is simply a
prior year assessment. And finally, to provide a super Pell to
students who enroll in enough credit hours to graduate within 4
years; to facilitate, in a traditional model, students
attending college for 15 credit hours per semester. Doing so
would eliminate the need of many students--and, most
specifically, the non-traditional students--from working,
borrowing or stopping out, which stopping out can run as high
as 95 percent at some community colleges.
I thank you for the opportunity to talk about Pell grants
today, and look forward to working with the committee in this
regard.
[The statement of Mr. Draeger follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Appendix B: NASFAA Reimagining Aid Design and Delivery (RADD) report
[The report, ``Reimagining Financial Aid to Improve Student Access
and Outcomes,'' may be accessed at the following Internet address:]
http://www.nasfaa.org/radd-event/
Appendix C: NASFAA A Tale of Two Incomes: Comparing Prior-Prior Year
and Prior Year through Pell Grant Awards
[The report, ``A Tale of Two Income Years: Comparing Prior-Prior
Year and Prior-Year Through Pell Grant Awards,'' may be opened at the
following Internet address:]
http://www.nasfaa.org/ppy-report.aspx
______
Chairwoman Foxx. Thank you very much.
Dr. Robinson, you are recognized for five minutes.
STATEMENT OF DR. JENNA ASHLEY ROBINSON, DIRECTOR OF OUTREACH,
JOHN W. POPE CENTER FOR HIGHER EDUCATION POLICY
Ms. Robinson. Madam Chair, Ranking Member Hinojosa, and
distinguished members of the committee, thank you for this
opportunity on my own behalf and on behalf of the Pope Center.
Pell grants, the Pell program faces two serious problems
today. First, the increasing cost to the taxpayer and its
failure to serve students well. The program, in short, is too
expensive, and too few students graduate. By returning the Pell
program to its roots, it is possible to trim costs while
improving student success and access. Let me start with costs.
In 2011-2012, over 9 million students received Pell grants.
Awards totaled more than $33 billion. Thirty-five percent of
all U.S. students received some form of Pell grant. Since the
creation of the program, participation has grown more than
4,500 percent, and much of that growth consists of middle-
income students. Eight percent of Pell recipients come from
families whose income is higher than the national median, and
60 percent of the Pell recipients come from families above the
federal poverty threshold.
It may seem ironic that these middle-income students do
not, in general, benefit from Pell grants. Students from
families earning $25,000 to $55,000 who receive Pell grants are
actually less likely to graduate than non-recipients with the
same income. For low-income students the opposite is true. Pell
recipients whose families earn less than $25,000 are more
likely to graduate than non-recipients with the same income. In
short, Pell grants help our neediest students achieve
graduation but do not improve graduation rates for middle-
income students.
Pell grants also work best for students with strong
academic backgrounds. The college retention rate of Pell
recipients who took a rigorous curriculum in high school was 87
percent, compared to just 57.6 percent for grantees without a
rigorous curriculum. Pell recipients with SAT scores between
400 and 800 graduated at a rate of only 34.2 percent. Those
with scores between 1140 and 1600, out of 1600, graduated at a
rate of 73.7 percent. Similar differences are seen when high
school GPAs of Pell grantees are compared.
With that in mind, we have several recommendations. First
and foremost, we need better data so the Department of
Education can evaluate the effectiveness of Pell grants. And
second, we need to make sure that the public can have access to
that data. But better data are just a start. Financial
eligibility should be limited to students whose income falls
below 133 percent of the federal poverty level, a cutoff
commonly used for qualification for programs such as Medicaid.
With a simple cutoff, the FAFSA can be simplified.
For very low-income students, full eligibility could be
determined in only five or six questions instead of the long
form that students face today. And for students who are not
very low-income, the form could be simplified, but not quite to
that extent. Colleges and universities, next, should place
limits on students' Pell grant money to stop students from
receiving grants and then dropping out of their courses. One
positive example comes from North Carolina, from Central
Piedmont Community College. They have implemented several
policies to do just that.
They don't disburse grants until after 10 percent of the
semester has been completed. They disburse money in two parts
over the semester to make sure that students stay around. And
they limit what can be purchased with financial aid. Next,
grants should go to students who are prepared for the challenge
of college work. Academic requirements for initial and
continuing Pell eligibility should be tightened. One option to
do so would be to match academic standards set by the National
Collegiate Athletic Association, which requires first-year
athletes to have completed certain high school courses.
It also requires students to have taken ACT or the SAT and
to meet threshold scores based on GPA. Such a policy would
focus on the students most likely to succeed, and give them an
incentive to better prepare for college. To further encourage
students to graduate, grant amounts should be linked to
enrollment intensity. Students who receive the maximum award
should be expected to take 15 credit hours, not 12. Also, this
could be coupled with the Pell Well concept introduced by the
National Association of Student Financial Aid Administrators,
which bases awards on a 12-month schedule rather than the
academic year.
In sum, the current Pell program faces serious challenges.
But we can meet those challenges with better data, financial
planning and student accountability. Thank you.
[The statement of Ms. Robinson follows:]
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Chairwoman Foxx. And I thank the first two witnesses for
being so good about being on time.
Mr. Dannenberg, I recognize you for five minutes.
STATEMENT OF MICHAEL DANNENBERG, DIRECTOR OF HIGHER EDUCATION
AND EDUCATION FINANCE POLICY, THE EDUCATION TRUST
Mr. Dannenberg. Thank you. I have three basic messages for
the committee. The first is, tread lightly. The second is,
pursue a balanced approach to any long-term funding gap in the
Pell program. And the third is to attempt to leverage state
institutional aid in support of college affordability and
college completion in order to make the Pell Grant program more
impactful.
I am a maximum Pell grant recipient first-generation
college graduate. I am one of many success stories out there.
There are millions of folks who have overcome far more
significant hardships than I have, and have accomplished far
more. Which is why I want--which leads to my first point of
treading lightly. The Pell Grant program has been very
successful. Forty years ago, the percentage of low-income
students who were pursuing a higher education was less than
half of the percentage today. We have cut the gap between low-
income students and upper-income students in pursuing higher
education by 40 percent in those 40 years.
So Pell is making a difference in millions of lives, as has
been discussed, at least with respect to access. I think it is
important to keep in mind Representative Hinojosa mentioned
that 90 percent of Pell recipients have incomes of less than
$50,000. For those with incomes between $30,000 and $50,000,
after you add up grant aid, scholarship aid, whatever the feds
expect to pay out of your pocket students still have unmet need
of some $11,000 to pay for 1 year of higher education. Now,
they are filling that unmet need with loans, with additional
work, eating Ramen noodles.
The point is that these students are living on the edge. So
if you cut Pell grant funding for students who are in that
$30,000 to $50,000 range you run two major risks. The first is
that some students will not pursue higher education. And the
second is, as Justin mentioned, a number of students who are
eligible and academically prepared to go to 4-year institutions
will instead under-match down to 2-year institutions where, all
things being equal, they are substantially less likely to
complete.
Second message. In dealing with the long-term funding gap,
I think a balanced approach is appropriate, one that targets
spending reductions in areas that are not linked to needy
students directly and pursues revenue enhancements in the
program side. I have listed a host of offset options in my
testimony. I am just going to throw out one with respect to
targeted spending reduction. Right now, if a student leaves
higher education before a term is up the school is
theoretically responsible for returning the financial aid that
that student received: the Pell Grant aid that student
received.
But right now, the rules are very loose. Once a student
puts in 60 percent of a term, the school gets to keep 100
percent of the money. If a student drops out and doesn't notify
the school when they are dropping out, the school gets to
assume that the student was there 50 percent of the time and
keep 50 percent of the money. If you tightened up the return of
Title IV rules alone over some 10 years our estimate is that
upwards of $10 billion could be saved. And like I said, we have
a list of offsets included in my testimony. A number of them
are on the revenue side in terms of increasing revenue to the
Pell Grant program.
This brings me to the third message: leveraging state and
institutional aid in support of improved college completion and
college affordability. State aid, declining state aid, is the
number one driver of increased college tuition. As Justin
mentioned, high school academic preparation is the number one
driver of college completion. The feds are small players in
this game, overall; major, but still small. The big players are
still, financially, states and institutions of higher
education.
If we could incentivize states to, if not maintain their
funding, at least embrace policies that ensure that low-income
students can pursue higher education with a debt-free guarantee
or low tuition--as Justin mentioned with respect to Indiana,
which is a model program--you could dramatically improve
college completion and reduce college costs.
I want to be clear that this is not some sort of pie-in-
the-sky idea. I worked for Congress for a long time. Congress
has a long history of consolidating programs, targeting
programs, delivering that aid in lump sums. We would suggest
doing that with respect to a number of higher education
programs--loans, grants, tax benefits--outside the Pell Grant,
outside unsubsidized loans. Delivering that money to states,
then let states do what they think is best in order to achieve
the type of outcome that they have in Indiana.
Imagine being able to say to an eighth grade student, ``If
you are responsible, if you work hard in high school, we will
guarantee that you can go to a 4-year public college of your
choice within your state, at the very least, without incurring
any new debt. Or have it with an interest-free loan or with a
cap on your debt.'' That type of promise is possible. Students
who have the talent, desire and drive to pursue a secondary
education should be able to do so without being hindered by
inability to pay.
That was Senator Pell's vision 40 years ago. I still think
it is right today.
[The statement of Mr. Dannenberg follows:]
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Chairwoman Foxx. Thank you, Mr. Dannenberg.
Mr. Heath, you are recognized for five minutes.
STATEMENT OF RICHARD C. HEATH, DIRECTOR, STUDENT FINANCIAL
SERVICES, ANNE ARUNDEL COMMUNITY COLLEGE
Mr. Heath. Chairwoman Foxx, Ranking Member Hinojosa and
members of the committee, I am pleased to be here today to
present this testimony. On behalf of my institution, Anne
Arundel Community College, on behalf of the 17 professional
financial aid staff at my institution, and the nearly 6,000
Pell Grant recipients we are currently serving. We are happy to
engage with the committee on how we can improve the Pell Grant
program, especially in the areas of increased flexibility for
non-traditional students, encouraging completion, to finding
and identifying the neediest students, and eliminating fraud
and limiting abuse.
With almost 1,200 community colleges nationwide and
millions of Pell recipients, these topics are of high
importance and extremely relevant to our institutions and
students today. Increased flexibility for non-traditional
students: many non-traditional students determine their best
option is to take less than 12 credits because of family and
work responsibilities. The Pell grant should be flexible enough
to pay for those credits only. Currently, if a student is
eligible for the maximum Pell grant, but is registered for nine
credits, he receives the same amount of Pell as the student who
registers for 11 credits.
Students in this scenario are using up their Pell lifetime
eligibility used, but not earning the most credits allowed.
This penalizes the non-traditional student who often is not
able to attend full-time. More flexibility in this area would
be a win-win. For the non-traditional student, they would be
pursuing their educational goals at a pace that fits their
other time commitments, and the taxpayer would not be paying
for credits that are not yet earned.
Encouraging completion: Maryland has responsibility passed
the College and Career Readiness and College Completion Act of
2013, or known as SB-740. A good summary and an FAQ on this
initiative can be found at the website for the Maryland
Association of Community Colleges. This initiative takes
significant steps to better prepare Maryland students for
college and encourages completion once they get there. There
are similar initiatives in other states, but there are still a
large number of states with no such progress.
Colleges have data that indicate that students who need
more than two developmental classes have a significant drop in
program completion. And it follows that the more developmental
classes required, the more the program completion rate drops.
Maryland law SB-740 attempts to decrease the need for
developmental education on the college level, simplifying the
process for defining and identifying the neediest students. We
know who the neediest students are, and we can identify them as
early as middle school and certainly by grades 10 through 12,
as there is a means test in place to identify those who qualify
for subsidized meals in the public schools.
The recommendations noted in my written testimony are part
of a report from the NASFAA reauthorization task force, of
which I was a member. The seven recommendations that I have
highlighted would have a positive impact on college access
through all the Title IV programs, and allow students who have,
or whose families have, already demonstrated high needs to
auto-qualify for maximum federal aid, and would reduce the need
for a separate financial aid application or, at the very least,
further reduce the number of questions aimed at determining
financial ability to pay.
In the interest of time, I direct you to those seven
recommendations in my written testimony which, if adopted,
would make a significant contribution to defining and
identifying the neediest students.
Eliminating fraud and eliminating abuse: I begin with the
premise that aid administrators are committed to ensuring that
all students legitimately pursuing higher education have access
to the funding they have been determined to be eligible to
receive. At the same time, aid administrators have the
responsibility of preventing those who are not eligible from
receiving any amount of financial aid.
Pell, like other federal programs, is subject to fraud.
Compared to other programs, fraud in the Pell Grant program is
relatively minimal in terms of numbers of cases and dollar
amounts. Financial aid administrators responsible for awarding
Title IV funds are at the core of attention, somewhere between
making the process simple and quick for students while asking
enough questions to determine eligibility and prevent fraud.
Eliminating the possibility for fraud--that is, students or
potential students acting with criminal intentions to access
federal funds using either fraudulent information or the stolen
identity and information of someone else--is of the highest
concern to financial aid administrators across institutional
types and mission goals.
Our goal is to eliminate fraud in the programs while, at
the same time, assisting the vast majority of students who are
pursuing their educational goals legitimately. Identity theft
is a global problem and in a category by itself. Along with
identity theft, aid administrators are cognizant of the
attempts to submit documents that are fraudulent to support a
student's claim of having little or no income, academic
attainment for high school and/or college, medical
documentation to support SAP appeals, exaggerated family size
or number of family members in college, residency status, and
other document types that determine eligibility for federal
funds.
The Department of Education has been highly cooperative and
responsive to our concerns and has taken steps over the last
few years to help institutions take preventative action,
including systemically identifying files that have unusual
enrollment patterns, significant use of Pell Grant eligibility,
and high amounts of loan debt. Ed then electronically notifies
the financial aid office and a follow-up is conducted to
determine if they are, in fact, who they say they are, or if
they are legitimately pursuing appropriate educational goals,
or if they are someone trying to take advantage of the system
and misuse federal funds.
In the written portion, I have--
Chairwoman Foxx. Mr. Heath, Mr. Heath, I am going to ask
you if you can wind up, please. You are almost two minutes
over.
Mr. Heath. Some of recommendations have been implemented at
Anne Arundel, but yet we still see numbers of students that
attempt to fraudulently obtain federal aid.
[The statement of Mr. Heath follows:]
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------
Chairwoman Foxx. Thank you very much.
I want to now recognize the chairman of the higher
Education and Workforce Committee, Mr. Kline, for five minutes.
Mr. Kline. Thank you, Madam Chair. Thank you to the
witnesses for being here, your quite excellent testimony.
Dr. Robinson, I am trying to understand how your idea of--
looking at your testimony--we would require students to have
taken the ACT or the SAT and to meet threshold scores based on
GPA. So I listened carefully to your testimony. You talked
about how you have a greater success rate if they have had a
rigorous high school education and so forth. But I don't
understand how this would work for the millions of what we are
still calling ``non-traditional students,'' people going back
to the community college or for-profit school or something like
that to get a particular skill.
They haven't thought about rigorous high school or SAT, ACT
for maybe years. And by the way, I agree with the chairwoman
that we ought to find another term beside non-traditional
student, since the majority of college students now are in
higher education are non-traditional. So how would that work?
Ms. Robinson. I think it would be best to only apply those
standards to students coming directly out of high school, and
there should be alternative standards for the new traditional
student, the part-time student. Additionally, I think there
should be ways for students who have perhaps not achieved, in
high school, what they find later in life themselves to be
capable of, to find an alternative way to achieve standards.
For example, after one semester of satisfactory academic
progress in a community college, they become re-eligible, even
if they weren't under rigorous high school standards.
Mr. Kline. So if they had the low SAT, ACT they would have
to go that first semester not qualifying for a Pell grant. But
if they demonstrated, then, academic capability they would be?
I am--
Ms. Robinson. Exactly.
Mr. Kline. Okay.
Ms. Robinson. Giving students a second chance.
Mr. Kline. Okay. That was my other question. Excellent.
Mr. Draeger, I am interested in--``intrigued by'' might be
a better word--the Pell Well idea. Could that be too costly for
the government to administer this thing?
Mr. Draeger. The cost is a good question. The way the Pell
Well would really work is, you are telling a student upfront
how much in dollars as opposed to percentages, which is what we
do now, they would qualify for. And percentages based on full-
time enrollment don't translate well for most students; dollars
make sense. In the long run, in over a five or 10-year
projection, I am not sure that it would cost any more. Because
you are telling them a lifetime eligibility limit based on what
Congress recently did, which was shrink it from 18 semesters to
12.
So while an outlay may be more in year one, over a five-
year or 10-year period I am not sure cost would go up. Because
we are just using a dollar amount as opposed to a percentage,
which is what we use now.
Mr. Kline. Okay. Again, thank all the witnesses. Really
helpful as we are trying to move forward to a reauthorization
of the Higher Education Act. I think this is our 11th or 12th-
something hearing to try to grapple with a lot of these issues.
A lot of it has been focused on financial aid in the large, and
specifically Pell grants and loans, and how do we do loans and
all of those things, because it is central to the issue of
getting people access to an affordable education. And it is
doggone confusing.
So, again, thank you very much for your input here today.
And, Madam Chair, I will yield back.
Chairwoman Foxx. Thank you, Mr. Chairman, for also being a
great role model. And one person at maybe not our last hearing,
but recently, has suggested that we use the term ``contemporary
student.'' So that is one of the suggestions that has been put
out there. But we are looking for an alternative to using non-
traditional, since the non-traditional are now 75 percent of
students.
I now recognize Mr. Hinojosa for five minutes.
Mr. Hinojosa. Thank you. Mr. Dannenberg, as you stated in
your testimony, the maximum Pell now covers less than a third
of the average tuition at a public 4-year institution due to
the rising college costs. In light of the diminishing
purchasing power of the Pell grant, now the lowest since its
inception, could you discuss the reliance of Pell recipients on
federal student loans?
Mr. Dannenberg. I am sorry? Can you repeat that? Would I
discuss what?
Mr. Hinojosa. Could you discuss the reliance of Pell
grants--
Mr. Dannenberg. Nine out of 10 Pell Grant students assume
student loans. It is twice the rate of non-Pell Grant students.
As you know, the average student who completes a 4-year degree
does so at some $27,000 in debt.
Right--we used to have a situation where grants were the
base of student financial aid packages, and loans were
supplemental. Now we have a situation where loans are the base
of financial aid packages and grants are supplemental. That
diminishes students' ability to take on certain occupations
when they leave, and it has a very real impact--particularly on
students of certain demographic groups when it comes to loan
aversion, debt aversion and the idea of even going to higher
education, much less going to a school that is a good fit.
Mr. Hinojosa. I agree with you. You indicated also that 60
percent of the African-American, and 51 percent of Latino
undergraduates rely and depend on the Pell grants. Thus, could
you elaborate on the importance of Pell to minority students?
Mr. Dannenberg. Yes, that is absolutely correct. There have
been a number of studies--Tony Carnevale at Georgetown
University is probably the leading academic on this--that
indicate the United States is going to be in desperate need of
more students, more workers with postsecondary certificates and
degrees, where those students have to come from are low-income
and minority populations, in particular Latino and African-
American.
Reducing the Pell grant will have an effect on college
access for low-income students, a disproportionate impact on
African-Americans and on Latinos. We should be increasing our
investment, not decreasing it.
Mr. Hinojosa. I want you to elaborate on the
recommendations that you listed on addressing the Pell funding
gaps.
Mr. Dannenberg. Sure. As I mentioned, I think we should
pursue targeted spending reductions that are directed at
institutions as opposed to needy students. This committee,
Congress, has dealt with repeated Pell Grant shortfalls and
funding gaps in recent years. Almost all of those funding gaps
and shortfalls have been filled with student benefit cuts. We
need to stop doing that. Instead, focus on spending reductions
that are targeted at institutions or revenue enhancements.
I have listed a number of possible revenue enhancements.
One of my favorite ones has to do with the outstanding federal
family education loan volume. There are about $400 million in
outstanding federal family education loans, FEL loans. Every
time one of those loans is paid off early or converted to the
direct loan program the government saves money. We should be
incentivizing.
We should be authorizing the secretary of education to buy
down that debt--from borrowers, from lenders, wherever--get rid
of that debt. Save funds, drive those funds into the Pell Grant
program. The New America Foundation estimates $17 billion over
10 years can be saved that way.
Mr. Hinojosa. I thank you.
Dr. Robinson, in your remarks you spoke about revising the
return to the Title IV rules. When a student withdraws from
college prior to completion of a term, the former student and
her institution generally must return a portion of the
disbursed federal financial aid; Title IV aid, which includes
Pell Grant grants. I wonder if you have compared that
recommendation with the what we call ``for-profit colleges and
universities,'' which often times recruit those who were not
college-ready and somehow get them started. They get the Pell
grant and they quit very quickly.
In fact, the numbers that I have seen indicate that 25
percent of the money available for Pell grants is used up by
only 10 percent of the students going to college through the
for-profit colleges. What if they had to return 90 percent of
the money that they receive from a Pell grant of, let's say,
$6,000 because the student dropped out early. Can you discuss
that with me?
Ms. Robinson. I haven't looked at that specifically, but I
think making sure that students are accountable regardless of
the type of institution that they attend is very important. I
think that there are many programs that provide a model for how
to do that. I mentioned one in North Carolina, Central
Piedmont. And I think that there should be incentives for
institutions to make sure that the students who begin actually
complete.
Mr. Hinojosa. Now, let the record show that I question the
amount that the for-profit colleges are returning to us when
the students drop out.
Thank you.
Chairwoman Foxx. Thank you, Mr. Hinojosa.
Mr. Walberg, you are recognized for five minutes.
Mr. Walberg. I thank the chairman, and I thank the
committee for being here.
Mr. Draeger, interested to see that you spent some time in
East Lansing. It is an exciting place to be, especially with
this Saturday coming up. I say that knowing that the University
of Michigan is in the room, as well. Proud of both.
Great game this weekend with Ohio State.
I appreciate your perspective. And especially dealing with
financial advisors and managers of institutions. If the
criteria for Pell eligibility were made more rigorous, how do
you think institutions would respond to this change? And how do
you think this might affect persistence specifically of the
students?
Mr. Draeger. There is a tension between the eligibility
requirements for financial aid and simplicity; making it simple
enough that students, needy students, will apply for financial
aid. In the past, that tension has been greater than it is
today because we rely so much on technology. Almost 100
percent--not quite, but almost 100 percent--of people who apply
for financial aid today do it through an online application
that allows them to skip by questions that don't apply for
them.
So if you are truly needy, qualify for federal means-tested
benefits or other ways that we are identifying that you are
truly needy, you can import information from the IRS, or you
are given a pass through the majority of the FAFSA questions.
So that tension that existed in the past doesn't truly exist
today.
So if we moved the period of time that students have to
apply back a little bit, we could ask more complicated
questions and use skip logic that would still allow needy
students to pass through the FAFSA very quickly but still get
to some rigorous questions for those students who are sort of
on the cusp to find out if they are truly needy or have some
financial strength that is not currently reflected in the
federal needs analysis formula.
I think schools would welcome that move.
Mr. Walberg. Would you say that that would also add to the
expectation of success, ultimately, and the outcome for a
student completing as opposed to just accessing the education?
Mr. Draeger. I am not sure that there is research that
shows the link between federal student aid eligibility, at
least in terms of financial strength of a family and
completion. What would mean more to success is moving back that
application period so that students would have a clearer idea
and confidence of their financial aid package to know how much
money they would have to attend college. That would have a
meaningful difference in persistence and completion.
Mr. Walberg. Mr. Heath, earlier this year I had the
opportunity to hear testimony from the inspector general of the
Department of Education that pointed out that of the $32
billion that will be spent on Pell this year, nearly $1 billion
of that will be going to individuals that should not receive
it. What you have instituted at Anne Arundel Community College
to discourage and prevent the potential for waste, fraud and
abuse sounds interesting, from your testimony.
Could you expand upon that? And are there other tools that
may be helpful to consider in reauthorizing the Higher
Education Act?
Mr. Heath. Yes. One of the primary things that we did 2
years ago was implement an affirmative daily attendance
process. And we tied that process with our disbursements. So if
a student is registered full-time, 12 credits right now, before
that money will disburse--before the Pell money disburses to
their student account--our process goes over to check to see if
that student has, in fact, started attending the class that the
aid is going to be paying for.
If they haven't had attendance recorded, that aid does not
move. So we have closed the loophole between students
registering for class, they were eligible for the money--
Mr. Walberg. The student is fully aware of that, as well.
Mr. Heath. The students are fully aware of that. We
publicize that. And every semester, as you might imagine, we do
have a faculty once in a while that doesn't record attendance
and the student comes in wanting to know where their money is.
So it is a way to close that gap.
The other thing that we have done is, for all of our
students that are only online, we have a process that we run
prior to disbursing funds that gives us a list of all those
students.
We compare addresses. So if we were to see multiple
students coming from the same address, we would not disburse
money. We would do a further check. We haven't found that yet.
We have found a husband and wife, or a father, son or something
like that. But we haven't found multiple students coming from
the same address. But we do have that process in place now.
Mr. Walberg. I thank the chairwoman. My time has expired.
Chairwoman Foxx. Thank you very much.
Mr. Loebsack, you are recognized for five minutes.
Mr. Loebsack. Thank you, Madam Chair. Thanks for having
this important hearing today. And I do want to thank all of you
for being here today and offering some possible solutions to
sort of tightening up the program, making sure that we don't
have waste, fraud and abuse.
I do want to emphasize Mr. Dannenberg's first point, which
I think was tread lightly. This is something--I just think we
have to be very, very careful that we continue to have a
program that provides access to these low-income students when
we--sure, we all want to wring out waste, fraud and abuse. We
all want to make sure that these folks are held accounting,
that they are not taking advantage of the system.
We have all heard stories about that in the past. Myself,
many members here have heard me talk about how I grew up in
poverty myself. I had a single mother, parent, who had an 11th
grade education. Like you, Mr. Dannenberg, first-generation
college student. I wouldn't have been able to get to college
had it not been for my friends, actually, who came from
different family situations and took all this very seriously.
So I sort of determined what I was going to do based, in no
small measure, on my relationships with my friends.
But I was able to take advantage of programs like this to
go to Iowa State University. The last thing I want to see is
these programs be eviscerated in one way or another. So I think
it is important that we do tread lightly, that we keep in mind
what the ultimate goal here is. And that is to make sure that
students who don't always have the most advantageous
backgrounds have access to college--a college education. Not
only for their own sake, but for the sake of our country, for
the sake of the competitiveness of the United States of
America.
I think we have to keep that big picture in mind, as well.
And also, we have talked a little bit about the skills gap.
Community colleges, we all know, are extremely important in
this country. In the state of Iowa, the governor and others
have quite rightly pointed out and identified the skills gap,
and how community colleges are going to be very important in
educating folks so that they can get into those mid-level
skilled jobs. And community colleges are absolutely critical on
that front, as far as I am concerned.
I taught at a small college, Cornell College, for 24 years.
Important college in terms of educating folks. But community
colleges really are the key. I call them the intersection, if
you will, between education and workforce development. The
principal--not the only, but the principal--intersection. So we
have to be careful also that we not so restrict the environment
out there for these students who want to go to these community
colleges.
I understand we have to tighten it up, but we have to be
very careful, too, that we tread lightly. And I just have one
question for you, Mr. Dannenberg. You mention on page three of
your testimony that--your written testimony that you lament the
fact that the year-round Pell Grant program--something that I
championed, as a matter of fact, a number of years ago, that
that has gone by the wayside, in no small measure to try to
restrain the cost of the Pell Grant program.
Can you talk to us a little bit about the effects of that?
Because you mentioned it kind of in passing, more than anything
else, on page three.
Mr. Dannenberg. Sure. I think, first of all, the
institutions that are affected more than any other institution
by ending what has been called ``Second Pell'' or ``Summer
Pell'' are community colleges and historically black colleges
and universities in particular. And the situation is that a
number of students are coming in under-prepared academically.
Forty-odd percent are having to take at least one developmental
course.
So before the credit-bearing work they are having to learn
at the post secondary level what they were supposed to be
exposed to in high school, which is why we should have a
college career-ready course of study for all students at the
high school level. But because they are behind, they are then
behind at the end of their first year. They are not on track to
graduate on time.
So what was happening over the summer--and it was expensive
because this affects so many students--is that they were
catching up. So that when they began their second year they
were actually going to be second-year students instead of a
second-year student who has only 14 credits and is really, in
effect, a first-year student or 12 credits. Second Pell, or
Summer Pell, was having an access impact, particularly at
community colleges and historically black colleges and
universities. And they are hurting as a result of its
reduction, not to mention the needy students who are affected.
Mr. Loebsack. Thank you. And I want to thank all of you for
your testimony, and thanks for indulging me. I normally don't
take up this much of the 5 minutes with my own speech, if you
will. But I do think it is really, really critical that we keep
in mind that we have to have a balanced approach here and that
we have to tread lightly and that we cannot cut these programs
to the bone, where it is actually going to deprive students who
are willing to take the initiative and the personal
responsibility, which I think we all value, to invest
themselves in these programs so that they can be better
students, so they can be better citizens.
Thank you. Thank you, Madam Chair.
Chairwoman Foxx. Thank you, Mr. Loebsack.
Dr. Heck, you are recognized for five minutes.
Mr. Heck. Thank you, Madam Chair. And thanks, thank all of
you for being here today. Like Mr. Dannenberg, I am the first
in my family to go to college, and also was a maximum Pell
Grant recipient, and understand the importance of Pell Grants
in helping students achieve their dreams. And it is why, when
we were having the debate on student loan interest rates, I
introduced amendments that would redirect some of the savings
into funding Pell Grants.
And while it may be semantics--we talk about federal
financial aid making college more affordable--I always say it
makes it more accessible. It doesn't necessarily make it more
affordable because it doesn't really address the reasons that
tuition and fees have increased by 538 percent since the early
1980s, almost twice as fast as health care costs and nearly
four times--four-and-a-half times as fast as inflation.
And so what I want to know is, what are doing to really try
to address the costs of a postsecondary education? Some have
theorized that we are in this circular loop of we increase
financial aid, which then somehow results in higher tuition and
fees because there is more money available, and then we have to
increase financial aid to keep up with those higher tuition and
fees, which keeps this cycle going. I would ask if you believe
in that theory and what your opinions are as to why the cost of
a postsecondary education have outstripped inflation so much
over the last couple of decades.
Do you want to start, Mr. Draeger?
Mr. Draeger. It is very simple to come to the conclusion
that as we pour more financial aid--and frustrating, as we pour
more financial aid into the system, the cost of college
continues to increase. But I think the first thing we have to
look at is the difference between the cost of providing the
education and the price that students and families pay. So the
cost of providing education, if you went back over the--since
the 1980s has run fairly parallel with inflation. But if you
look at the price that students and families have been paying,
it has been running more than double the rate of inflation.
In such a complex environment and system, where there are
so many different subsidies at the state level through
appropriations, the primary driver that we have seen in
tuition, or price increases, isn't because the cost of
providing the education has gone up so much. It is that state
and local governments have been disinvesting in higher
education. So whereas 40 years ago states were covering 65
percent of the cost of higher education through a subsidy,
through appropriations, today they are covering more around 30
to 35 percent.
And so the burden of paying for college has gone from the
public pooling together at the state and local level to
individual families. And the way they are doing it is primarily
through loans.
Mr. Heck. Anyone else care to jump in?
Ms. Robinson. I would say that that is part of the picture,
but certainly not--doesn't explain the entire picture. It
doesn't explain why Duke University is $50,000 now. Private
universities have been increasing their costs and their tuition
to students at the same time as public universities. So I think
that there is something going on with federal aid fueling and
enabling universities to increase their tuition. The research
that has been done shows that Pell grants are not largely a
part of that. It is mostly an effect of student loans.
And I think that one possible change that could be made to
the formula determining how much aid students get for both
loans and Pell Grants could be replacing the cost of attendance
with the median cost of college. Because right now, by using
the cost of attendance in a formula, a student will get more
aid by attending a more expensive university. So that formula
is helping to feed the ever-increasing costs.
Mr. Heck. Mr. Dannenberg?
Mr. Dannenberg. So a few quick points. First, I agree with
Dr. Robinson that there is a big difference between grant and
loan aid in terms of its impact on tuition inflation. There is
no evidence that increases in Pell Grants are driving increases
in tuition. Pell Grants have been cut in the past and tuition
has still gone up.
The main reason tuition is going up is that we have a
relatively finite supply of providers; we have very high demand
that is often irrational, under-informed, and, I am afraid, too
often irrational; and you have states and institutions that
take advantage of that high demand by cutting their own aid and
shifting responsibility to students in the form of heightened
loans.
Justin is right that a key is to maintain, if not grow,
state aid for higher education in order to slow the growth in
public college tuition and fees. As I said in my testimony, we
argue that there is ample opportunity for this committee, not
to mention other committees, to target existing programs
outside of Pell, consolidate those funds, give them to states,
give them to governors, create another Tommy Thompson out
there, or tell Jerry Brown or whoever to do--any governor out
there to maintain an outcome when it comes to college
affordability. You guys can empower them to do that.
Mr. Heck. Thank you.
Thank you, Madam Chair. I yield back.
Chairwoman Foxx. Thank you.
Mr. Bishop, you are recognized for five minutes.
Mr. Bishop. Thank you very much, Madam Chair. And thank you
for holding this series of hearings. I think they have been
very helpful and very informative. And I want to thank our
panel of witnesses.
I just want to pick up from the last line of questioning
and answers. We have had multiple witnesses come before this
committee--Republican witnesses, Democratic witnesses--to
testify on the impact, real or imagined, of availability of
federal student financial aid relative to increase in costs.
And almost without fail, they have all testified that there is
no connection between federal student financial aid programs
and the extent to which costs are increasing.
And, Mr. Draeger, what they almost all testify to is that
the principal driver of college costs is what you just said,
that is to say the retreat from supporting public education on
the part of the states and local communities. So I think we
have to assess Pell, we have to assess other Title IV programs.
But we ought to assess them based on our actual experience. And
I think to continuously put into the mix of our assessment what
is essentially a canard--which is that federal student aid is
driving increase in cost--is not helpful and doesn't help us
assess the future of these programs as we must.
And I know this hearing is about the future of Pell. I want
to focus on the current status of Pell and current law. Current
law is that Pell will be exposed to sequestration with the next
academic year. That could result in a cut to Pell of as much as
7 percent. And, Mr. Draeger, from the vantage point of your
national organization, and Mr. Heath, from the vantage point of
your community college, what impact would a 6, 7 percent
reduction in Pell--some $2.5 billion--what impact would that
have on the students, Mr. Heath, that you deal with every day?
Mr. Heath. Yes, that really is a good--it is a good
question, Mr. Bishop. What we expect is going to happen, the
student that is fully Pell-eligible, with a zero EFC, 7 percent
reduction certainly is going to hurt them. It will still pay
for all of their classes at Anne Arundel, but it will reduce
the amount that they have for books. The more troublesome
students are the ones that are getting kind of a little bit of
Pell, kind of the mid-Pell range or right on the cusp of Pell.
Those students will certainly increase the borrowing that they
are going to do in order to make up for the shortfall.
Mr. Bishop. Okay. Thank you, Mr. Heath.
Mr. Draeger?
Mr. Draeger. It exacerbates a regressive policy of pushing
low-income students into loans. That is the best case scenario.
The worst case is they stop out or drop out entirely. And the
other issue with budget funding is it pushes up against
deadlines where, once again, students and parents do not have a
sure picture of how much they are getting in financial aid when
they are trying to make college-going decisions this next
winter and spring.
Mr. Bishop. Just to be clear, I just think it is important
that we absolutely ought to focus on the future. But we can't
lose sight of the present. The present is that Pell is exposed
to up to a 7 percent reduction as a result of sequestration.
Over a 2-year period, if we don't fix sequestration, SEOG will
go down by $90 million, and College Work-Study will go down by
$130 million. I would imagine those would be tough cuts for
your students to absorb. Is that correct?
Mr. Heath, I am sorry.
Mr. Heath. Yes, that is--
Mr. Bishop. Thank you. Another issue that this committee
has looked at and is an idea that seems to have good--great
currency on Capitol Hill is the idea of one grant, one loan,
one work--under the heading of ``simplification.''
Simplification has a somewhat seductive allure to it but, Mr.
Draeger, has NASFAA taken a position on one grant, one loan,
one work?
Mr. Draeger. Institutions like the idea and simplicity of
one grant, one loan. But they also like, and students need, the
campus-based programs; the idea of work-study and--
Mr. Bishop. And that is my principal concern. One grant,
one loan by definition eliminates campus-based programs. And I
can see where it would be more simple for the individuals you
represent, the financial aid officer. I think we would all
agree we are much more interested in making it more simple for
students as opposed to the financial aid officer, with all due
respect.
Mr. Draeger. Absolutely. And schools need the campus--the
flexibility of the campus-based programs to help meet needs. So
if you have a student getting full Pell, and that only meets 35
percent of the cost of attendance at a 4-year public, the
additional input of campus-based aids can make up a significant
difference in meeting the rest of the cost of attendance.
Mr. Bishop. Okay.
Mr. Heath, would you concur with that?
Mr. Heath. Yes, I do.
Mr. Bishop. Okay. Thank you very much.
Madam Chair, thank you. I yield back.
Chairwoman Foxx. Thank you, Mr. Bishop.
Mrs. Brooks, you are recognized for five minutes.
Mrs. Brooks. Thank you, Madam Chairwoman. I would like to
just start out with you, Mr. Draeger. I am from Indiana, and I
was pleased to see that you mentioned the Indiana 21st Century
Scholar program. And as we talk about the federal government's
responsibility and the state's responsibility, can you just
expand, you know, for this hearing a bit more about the 21st
Century Scholar program and the success that we have seen in
Indiana for a long period of time?
Mr. Draeger. These state programs like 21st Century
Scholar, studies have shown that the one thing that they do
very well is tell students and families up front that there is
money available to them in a commitment if they meet certain
criteria at the secondary level. So is it easier? The anecdote
that we come down to from our members is, is it easier for
students to say I can't afford to go to college, or is it
easier for them to say--just say college isn't for me, or
algebra or pre-calculus isn't for me?
And what we find is that if you make a commitment of
funding to students and families, that they will then take
rigorous studies at the secondary level to prepare themselves
for college, not take remediation or have to take remedial
courses and then move through it a good persistence and
completion rate which is, ultimately, one of the things we want
out of the Pell Grant program.
Mrs. Brooks. And that program starts at the middle school.
That is where they are educated about what that opportunity is
for beyond high school. And that, then, helps them set the
path. Is that not right?
Mr. Draeger. That is right. So they are informed very
early, they are given the promise. And then the second part of
that is they need the commitment. So it is not only telling
them that it is available, but then actually coming through
with the dollars to make it available.
Mrs. Brooks. And are any other states doing any programs
like that that you are aware of, and what kind of success have
they had? And I know that, you know, we have had just thousands
and thousands of students--I think we have had over 100,000
students--participate in the 21st Century Scholar program. But
that requires a state commitment, as well. And are any other
states even contemplating it?
Mr. Draeger. Although not identical, the other large state
promise program has been the Georgia Hope scholarship. And
although it has gone through some eligibility changes in recent
years, Georgia Hope is another program that has shown that if
you promise students early and parents early that it will
change secondary school behavior to help prepare them for
college.
Outside of the state level, there are a lot of communities
that also have promise programs. So going back to Michigan,
there is a Kalamazoo Promise program and other local promise
programs for residents in those localities.
Mrs. Brooks. Thank you.
I would like to ask Mr. Heath--shifting direction a
moment--I was at our state's community college in Indiana, Ivy
Tech Community College, and when we talked about attendance,
and I find it interesting that Anne Arundel does take
attendance, which I think is a novel concept for colleges as I
understand. How is that they--the students, or the teachers, or
the professors actually take attendance?
Mr. Heath. We had our programmers develop an online process
for them that ties in to the rest of our student system.
Mrs. Brooks. And so when students come in to the actual
classroom, there actually is an attendance process as they sit
in the seat.
Mr. Heath. There is.
Mrs. Brooks. And is that some--how long has that process
been in place?
Mr. Heath. Just about two years now.
Mrs. Brooks. Okay. And I assume that is because, as we have
seen in a lot of colleges--that after that census cutoff date
there actually is a period of time, isn't there, when students
would disappear?
Mr. Heath. Yes.
Mrs. Brooks. Until this attendance process.
Mr. Heath. Yes, that is true.
Mrs. Brooks. Do you think we ought to use that as an
innovative way to ensure that students aren't just taking the
loan money, which we do know--and if you talk to students and
professors they have seen it happen.
Mr. Heath. Well, we certainly have found at Anne Arundel
that that was one of the best ways to--you know, to monitor
that. When this subject came up two years ago, with the
negotiated rulemaking session for--on program integrity issues,
as you might imagine there were a large number of organizations
and schools that pushed back against the concept. So the
Department of Ed stopped short of mandating it. Community
colleges took a look at it, not just Anne Arundel, and saw that
it was, in fact, a good way to--you know, to move forward.
Mrs. Brooks. Do you have any idea roughly what it cost Anne
Arundel to implement a program like that? Are there many costs
to it?
Mr. Heath. No, I was never informed as to what that cost
for programming was. I know that except for a few faculty it
was very well received by the majority of faculty on our
campus.
Mrs. Brooks. Any other comments from the other panelists
about--well, I see my time is up--about the integrity issues?
Madam Chair, I will yield back. Thank you.
Chairwoman Foxx. Thank you, Mrs. Brooks. I think we have
the opportunity--we can ask the panel members to submit
information to us after the hearing on that issue. So we will
be happy to look into that.
Mr. Holt, you are recognized for five minutes.
Mr. Holt. Thank you, Madam Chair.
Let me get a few facts straight. First, Mr. Draeger, I
believe you have said that the current Pell grant is about a
third of the cost of attending a public institution. Going back
three-and-a-half decades, more then three-and-a-half decades,
it was about--nearly three-quarters of the cost of attending a
public institution. Is that correct?
Mr. Draeger. Correct.
Mr. Holt. Mr. Dannenberg, I have here some figures for
Rutgers University that shows that the state appropriations
going to Rutgers are--is less--the dollar amount is less now
than it was, well, 20 years ago. And, in fact, over the last
more than two decades it has gone from 65 percent of the cost
being paid by the state and 35 percent being paid out of
tuition and fees to just the opposite. Are those figures
typical of states around the country?
Mr. Dannenberg. That is consistent with national trends.
Mr. Holt. So Pell grants are more important than ever, but
significantly smaller. So now let me get to the kind of the big
picture here. Is it established that the cost to a student is
the greatest determinant of attending college? Mr. Dannenberg
or Mr. Draeger?
Mr. Draeger. Yes, the number one reason that students cite
for not attending or dropping out is cost, financial concerns.
Mr. Holt. Okay. Now, as I hear from corporate planners and
economists, we need more, not fewer, college-educated workers
in this country. Does any of you know any estimates by
economists of the benefit to our economy of having half a
million, one million, ten million more college-educated
workers? Mr. Draeger?
Mr. Draeger. Well, I don't have those numbers at my
fingertips. Economists have done that work. We would be happy
to submit for the record. And the other point I would make is,
not only have they cited the benefits societally and
individually for people completing an education, but even going
to some college has economic benefit for a community and an
individual.
Mr. Holt. So even if there is a dropout rate that is higher
than we would like for Pell recipients, getting them into
college has benefits to you and me and our constituents.
Mr. Draeger. Yes. And there is a question to be asked here.
To be eligible for a Pell grant you have to be enrolled in
the--a program that is leading to some sort of certificate or
degree. But there are instances where if there are dollars
lacking in workforce development or training--that some
students have no intention of completing a certificate or a
degree. Their intention is to take a few courses to be able to
increase--
Mr. Holt. Well, I mean--you know, some of the discussion
today has dealt toward waste and fraud and the effects of
college aid on reducing individual initiative, and the
preparation of those who receive Pell grants and particularly
for those who are on the short end of the privilege gap.
But I don't want to lose the big picture here of what we
are debating. It was determined nearly four decades ago that it
was very much in the national interest to help people go to
college. Just as it was determined several decades before that,
when the GI Bill was passed, that it was in the national
interest, in dollars and cents, to help people go to college.
So my question is, are we even close to a shrinking
marginal return on the number of--on the benefit we get from
those people who will be incentivized to go to college because
of Pell grants? Are we even close to getting a shrinking
marginal return? Mr. Dannenberg, you looked like maybe you
wanted to address that.
Mr. Dannenberg. The short answer is we are not even close.
The difference in annual earnings between someone with a
bachelor's degree versus simply a high school diploma is over
$20,000 a year. That translates into $5,000 in tax payments per
year.
Mr. Holt. So national deficit, or not, or maybe especially
if we have a national deficit, spending money on Pell grants is
a good investment for our taxpayers. Would you go that far?
Mr. Dannenberg. Yes, I was going to correct you and say it
is not spending, it is an investment. You are absolutely
correct.
Mr. Holt. Thank you.
Chairwoman Foxx. Thank you very much. Mr. Messer, you are
recognized for five minutes.
Mr. Messer. Thank you. I appreciate this opportunity. A
fascinating conversation. I am going to focus at the beginning
on the testimony of Dr. Robinson. But I think that this hearing
is very important because it highlights--as you highlight in
your testimony--the importance of now moving as a nation away
from a philosophy towards higher education that focuses only on
access and starts to look at success. I am a product of Pell
Grants, could not have gone to college--graduated from Wabash
College--without Pell Grants.
Grew up in a single parent family. And understand, because
I have lived, the importance of these degrees. But, of course,
the world has changed a lot in the last 40 years. I would say
the federal financial aid system is one of the great success
stories in the history of the federal government. I mean, when
our goal was access we have provided access to higher education
for people in this country like never seen before. The
challenge is, is that when these programs started 40 years ago
access was enough.
If you looked at income potential of someone who had just a
little time in college, even one year, your income potential
was higher. Of course, today that has changed. If you don't
graduate with a degree, and a degree that adds value to
society, your income won't be higher. Plenty of people are even
graduating with degrees that make their income no higher. So we
now have to move from a system that provides access alone to
one that incents success so that we are making people's lives
better.
Because, of course, while this has all happened costs have
gone up, too. So people are now leaving if they don't get a
degree, most often with debt, too. Where you could argue that
they are literally worse off than they had been had they not
just had that access. What I have seen--I am a sort of a
product of the education reform efforts in K through 12 in
Indiana. And we saw our graduation rate, over a period of 6
years, improve by 15 percent through a series of reforms;
really, a lot of hard work from teachers, principals, parents,
students.
But a set of reforms that gave them those tools. Chief
among them, I found, was the measuring of graduation rate. We
used to have, as a society--we measured--to be counted as a
dropout, as you would all probably know, you had to enter in
your senior year and then not--drop out during that year. We
started, as a country, to measure from freshman to senior year.
And what I found in Indiana is that, once schools saw that real
graduation rate, they were quick to the table to bring their
own innovative reforms. And we have made a lot of change.
So, Dr. Robinson, if you could expand just a little. I
think measuring success rates, graduation rates, of Pell grants
would give us an opportunity to see where we are, and then
develop policies that not look to reduce what we spend in Pell
grants but look to better spend that money in ways that leads
students to success.
Ms. Robinson. Absolutely. One of my frustrations has been
how very difficult it is to get information about the success
rates of Pell Grant students. Federal data on that topic comes
out about once every 10 years. And recently, in North Carolina
we have seen more information forthcoming. The University of
North Carolina system just published that information. And I
think from that we are actually going to be able to move
forward and see what works and what doesn't.
I would absolutely like to see graduation rates published
so that we can move to focusing on how we can make sure that
students get from that access to success. I think one way of
doing that is requiring--right now, universities have to
disclose, but they don't have to report the information to
IPEDS. And I think that that would be a necessary step so that
we have the information available to the Department of
Education has the information available to answer more of the
outstanding questions about what helps Pell recipients become
successful.
Mr. Messer. Yes, thank you.
And Dr. Heath, my next question. I was very intrigued by
your comments about the need to increase flexibility for non-
traditional students. If I were to make another observation in
what has changed in 40 years is, you know, we have a system
very focused on the sort of four homecomings, kids showing up,
18-year-olds with a backpack. That is not many of our students
in today's world. Could you talk a little bit more--expand on
your discussion of providing flexibility for non-traditional
students?
Mr. Heath. Well, as, you know, it has been already noted
here, the non-traditional student, or contemporary student, if
you will, 75 percent of students now are going part-time. So
while many of us think that limiting the months of Pell or
semesters of Pell that a student could get was really a good
move, within that we now are seeing that part-time student
actually getting hurt because their eligibility is being used
up quicker because they really should only be taking nine
credits. It is not good for a student to take 11 credits when
they really should only be taking nine. Because their schedule,
you know, is such that their time commitments require more
family time, more work time.
So we don't want to see them using up that lifetime
eligibility quicker than what they really should be. So that is
one of the things that we are concerned about.
Mr. Messer. Okay, thank you.
Madam Chairman, I yield back.
Chairwoman Foxx. Thank you very much.
Ms. Bonamici, you are recognized for five minutes.
Ms. Bonamici. Thank you very much, Madam Chairwoman and
Ranking Member for holding this hearing today, and the
important tool for increasing college access and Pell Grants.
And I, like many others on the committee, worked my way through
community college, college and law school with a combination of
grants, loans and work-study. So I truly appreciate the
importance of what we are discussing today, and believe that
every student should have that access regardless of his or her
socioeconomic status.
And Pell grants were really founded as the basis of our
federal financial aid system. So this is, again, an important
topic we are talking about. I want to go back to the discussion
about the disinvestment by states in higher education. My alma
mater, University of Oregon, now gets about 5 percent of its
funding from the state. So I am going to ask Mr. Dannenberg, I
agree with your concerns about that, the issue of state
funding. And how has that specifically affected students'
reliance on the Pell program? I understand that it affects
reliance on the need for more financial aid, but on Pell
particularly.
Mr. Dannenberg. It has obviously had a tremendous effect on
students' reliance on the Pell Grant program, making Pell more
essential than ever when it comes to low-income student access.
I think the other thing to keep in mind is that when states cut
back funding for individual institutions the individual
institutions then change the nature of their aid to students.
They start emphasizing non-need-based aid instead of need-based
aid in order to try and attract in students who are able to pay
at least something.
So Pell faces a double hit. First, it is more important
because states are pulling back from institutions and therefore
tuition is going up. And second, the institutions are also
responding by shifting from need-based aid to non-need-based
aid.
Ms. Bonamici. Thank you. I also really think we need some
innovative thinking. Oregon, of course, is studying the Pay
Forward, Pay Back program. I am really interested in seeing
what happens with that study. And, Mr. Draeger, you talked
about the Pell Promise. How would such a program be implemented
successfully, and what support would be needed from the federal
government if we were to do something like that at the federal
level?
Mr. Draeger. The benefits of the Pell Promise we have
talked about, from the federal level I think very little would
need to change except that it could be modeled on something
like we do with Social Security today, where you are given a
statement along the way letting you know how much money would
be available to you--that piece of knowledge, then, supposedly
is empowering people to hopefully make wise decisions during
their career for retirement--something similar in higher
education.
So that based on the fact that somebody is already taking,
utilizing, some state or federal means-tested benefit, we know
they are low-income--and longitudinal 5-year study that NASFAA
conducted, which is included in my written remarks, showed that
for our neediest students their income levels don't change
greatly from middle school to high school to college.
If you are poor, unfortunately odds are you are going to
continue to be poor when you go into college. We could identify
them early, notify them early and, hopefully, effectuate
positive outcomes in secondary school.
Ms. Bonamici. That is great. Thank you.
Dr. Robinson, in your testimony you mentioned that it is
your belief that only ``very low-income students,'' and that
was your phrase in your testimony, should receive Pell grants.
So if, in fact, the proposals that you suggest were in effect,
then more students--what would they do? Drop out, or not start
college, or take on more loan debt? What would happen to all
the students who are currently eligible who wouldn't be
eligible under your proposals?
Ms. Robinson. Those students would do a combination of
things in order to achieve some kind of higher education. Some
of them might choose less costly institutions, some of them
might in fact take out loans. But the reason behind that
proposal is that the limited research that is available shows
that for those students they actually respond better to loans
than they do to grants that they do not have to pay back.
Ms. Bonamici. And I wanted to follow up on that because you
did have--you mentioned limited research. Do you know how many
students were studied in that particular study? Because that
was intriguing, when you said that, actually, middle-income
students don't benefit from Pell grants. I found that quite
surprising.
Ms. Robinson. I will have to go back and look at that for
you. I don't have the figure offhand.
Ms. Bonamici. Thank you.
And, Mr. Dannenberg, do you have thoughts on what would
happen if, in fact, we limited Pell grants to very low-income
students, and more students would have to rely on loans?
Mr. Dannenberg. Yes. First of all, it is important to keep
in mind that community colleges are like the great secret of
the American higher education system. Over 40 percent of all
students are going to community colleges. So the idea that
students are going to go to less expensive colleges, when they
are already going to very inexpensive colleges, flies in the
face of the data. What is going to happen is students will drop
out. They will go from full-time status to part-time status.
And if they do go from full-time status to part-time status
they will be much, much, much less likely to complete.
Ms. Bonamici. All right, thank you. And I see my time has
expired.
Thank you.
Chairwoman Foxx. Thank you.
Mr. Thompson, you are recognized for five minutes.
Mr. Thompson. Madam Chair, thanks for hosting this hearing.
And to the witnesses, thank you for bringing your expertise
here. Obviously, you know, probably even 10 years ago talking
about, you know, the typical student has changed, I think,
dramatically. And I think it will continue to evolve, where I
know when I went to college, my cohort, we were largely--it was
18-to 22-year-olds, something like that, that was on campus and
pursuing an education.
But then today it is determining how do we make these
programs flexible enough to meet people's educational needs at
every point in their lifetime, because it is not where you
start, it is where you end up. And the key to that success is
education. So it is--we need a dynamic program, there is no
doubt about that. I wanted to come back to a couple points in
the testimony, start with Mr. Heath. What percentage of
students at your community college and/or nationally require
remedial education?
Mr. Heath. I don't have that number readily available. I do
know that I have been told that it is a relatively high number.
But in context, some of those students are testing into
remedial math. And one of the reasons is that they were really
good students in high school, and by the time they got to grade
10 or 11 they had taken all the math required and so they were
taking nothing in grade 12. And when they went to do the
testing they were showing that they needed a developmental
class in order to take college-level algebra. So there is some
context there, but it is a fairly high number.
Mr. Thompson. Yes. I just spent some time in southern
Arizona at a--actually, a military installation, talking with
the officers in charge of the educational system there. And
they are training soldiers and officers. And remediation is a
big part of what they do there, as well. So it is across the
board. Any idea of how much of the Pell fund that we use for
remediation at this point?
Mr. Heath. No, but we do know that students can take up to
30 credits of, or the equivalent of, remedial courses, and Pell
grants will pay for it. But normally, students are stopping out
far short of that because they just are not able to continue
and to pass the courses.
Mr. Thompson. Mr. Draeger, you look like you had your hand
on the buzzer.
Mr. Draeger. About one in three college students today are
taking remediation nationally; 50 percent of students at
community colleges are remediating and just about a third, or
around 20 to 30 percent, in 4-year schools. Pell Grants cannot
be used solely for remediation. So they can take remedial
course work if it is integrated into a program. And as Rich
pointed out, there is a cap on how much remedial education can
be taken through the Pell Grant. So while it may be a--not an
insignificant dollar amount, it is not unlimited, by any means.
Mr. Thompson. Okay. Dr. Robinson, your testimony talks
about shifting the definition of full-time student from 12 to
15 credits as an option to encourage college completion. And
the benefits there are kind of obvious. Obviously of reducing
the overall role of debt in terms of get a--to earn your return
on investment sooner with your education degree. It is not the
degree that is of value, it is the return on investment that
comes from it.
Just thoughts on what impact that--would this have, given
on non-traditional students, kind of reflected on where I see,
obviously, our educational system needs to be: them being more
flexible at different parts throughout a person's lifetime or
on, specifically, Pell-eligible students.
Ms. Robinson. I think the significant impact comes in
looking at how you go from that 15-hour point. And I think the
way that you prorate for hours after that makes a big
difference. I think Mr. Dannenberg mentioned that you pay the
same for nine and 11. I think the prorating on that should
actually be the 11 and nine, 10; all of those are prorated as a
percentage. So students are using the money as they are taking
courses, and not having to pay for time they are not taking.
And I think it also should be coupled with the Pell Well
concept so students can go over summer. The main point in going
from 12 to 15 is that if someone is currently full-time at 12
hours, that person would be much better off to be 12--full-time
at 15. So that they, as you said, don't have debt, or don't
have six years of debt or five years of debt when they do come
out.
Mr. Thompson. And my last is actually just a request of all
the panelists. Anyway, the key part to this is developing
financial literacy among students and parents so that they are
choosing paths with a return on investment. That they have that
in the end. So I would just ask if you could submit to the
committee any thoughts or any recommended research that you
have seen on how do we increase financial literacy among
probably most specifically that traditional--what has been--I
don't think it is traditional anymore, but that post-high
school, postsecondary into college. That would be very helpful.
Thank you.
Thank you, Chairwoman.
Chairwoman Foxx. Thank you, Mr. Thompson.
Mrs. Davis, you are recognized for five minutes.
Mrs. Davis. Thank you, Madam Chair. And thank you to all of
you for being here. I certainly feel like a great example of
someone who went to UC system far too many years ago. When I
talk to students and tell them what I paid for--it wasn't even
considered tuition then, basically--they are shocked by that.
And it is a shift of 75 percent help essentially to students
versus today less than 25. And so that is why many, many
students do have to look for other sources of income.
I wanted to ask you, Dr. Robinson, a little bit--your
comment. And I know that my colleague asked earlier. But I
wasn't sure what you base the claim that Pell grants to
moderate--you said middle class students, I think, $30 to
45,000 or so. I was not sure that that is always middle class
in everybody's mind. But whether they are less likely to
graduate. So what is the causal relationship there?
Ms. Robinson. Sorry. It is based on the beginning
longitudinal study that the federal government puts out. And it
appears that the causal relationship is that in that income
group they are more responsive to money that they will have to
pay back. The knowledge that they have a loan that they will
have to pay back at the end makes them more likely to graduate.
The authors of the study are--
Mrs. Davis. For students who--
Ms. Robinson. For those who have $5,000 to $50,000 range.
The authors of the study only speculate on causation. They note
that this is research that really can't establish a causal
pattern, only a relationship. But that is what they found,
based on their research.
Mrs. Davis. I wonder if anybody else would like to comment,
Mr. Dannenberg? How does that stack up?
Mr. Dannenberg. I think one of the most interesting pieces
of research out there on the effect of need-based aid on low-
income students was done by Sara Goldrick-Rab and a series of
others published by the National Bureau of Economic Research.
They ran a control study, which is very rare. Basically, they
looked at Pell students who were getting a supplemental need-
based aid program through--in Wisconsin, and those who were
not. And what they found was that for a thousand dollars in
additional need-based aid to Pell students those students were
going to return for a second year of study at a rate of 3 to
4--a little over 4 percent higher. So the point is that
increased investment increases the likelihood of retention and,
therefore, progression-completion.
Mrs. Davis. Is there is a sense, too, that the community is
counting on those students in some way? I mean, does the fact
that students feel perhaps that it is a little more accessible
and more valued that they have a contribution to make to give
back?
Mr. Dannenberg. I think that is especially true with the
promise programs that Justin was referencing. But since I am
giving him applause, I also want to criticize the idea that we
can just give students in eighth grade a statement of how much
financial aid they will get, and that that will drive them to
school. It is not enough. Americans overestimate the cost of
higher education.
What Indiana does is much better. So what Indiana does is
provide a guarantee that you can go to school debt-free or
tuition fee-free. A number isn't enough. It needs to be a
concept.
Mrs. Davis. Okay. One of the things that you mentioned
earlier was that rather than targeting the students, that you
target the schools in terms of making some of the changes that
need to be done. And also, there are loans outside of Pell that
we need to deal with. Could you be a little more expansive
about that, and are there some ideas out there now that are
really out of the box thinking that we are not--people talk
about, but we are not quite willing to move forward on?
Mr. Dannenberg. Yes. First of all, you are absolutely right
with respect to institutions. And I think that has been a big
area we have neglected as witnesses: the importance of
institutional role. Not just when it comes to financial aid and
increased need-based aid versus non-need-based aid at the
institution. But what an institution does makes a tremendous
amount of difference when it comes to completion. We see
similar institutions with a similar student body that get
dramatically different results.
So one of the outside of the box ideas is that in any
effort to provide funds to the states, the states try and hold
institutions accountable for their performance with low-income
students in terms of increased completion. San Diego State is
one of the better schools in the country, as a matter of fact,
when it comes to completion among low-income, under-represented
minority students as compared to their peer institutions.
Mrs. Davis. Yes. And a lot of that is based on the number
of support systems that are built in, and using mentors and a
whole host of other community organizations. I appreciate that.
Thank you very much.
Chairwoman Foxx. Thank you very much.
Ms. Wilson, you are recognized for five minutes.
Ms. Wilson of Florida. Thank you, Madam Chair, for holding
this hearing today. The federal Pell Grant program is a
lifeline for more than 9 million students every year. The
program can make the difference between a life of poverty and a
good, meaningful middle class career. The Pell Grant program is
also a lifeline for America's economy. For African-American and
Latino students, education is the only--the only--stepping
stone out of poverty. There are very few dollars to inherit
from the family trust. There are very few African-Americans and
Latinos that can save enough to send their children to college.
So the Pell grant is key.
We need more students to undertake higher education in
order to close the skill gap and boost productivity. But so
many families are struggling to cover rising cost. While some
exaggerate the funding gap with regard to Pell, the fact is
that the program has been cut by more than $50 billion and is
projected to remain stable. It is very important to note that
40 percent of the growth in Pell Grant costs since 2009 has
been due to the increased number of Pell-eligible students in
this period of high unemployment, not due to policy changes.
What this says to me is simple. We can reduce the cost of
the Pell Grant program by getting Americans working again. Once
we get Americans working again, we will have fewer enrollees
with fewer families requiring assistance. So this Congress has
to turn back to its regular focus on jobs. Now, I have a few
questions for all of our witnesses.
While there is a great deal of focus on completion pressure
and non-traditional school year models, taking classes in the
summer months is often impossible for low-income students who
support themselves and other family members. What is a
reasonable number of semesters for which someone should be
eligible for Pell, taking into consideration the factors that
impact low-income students, especially Latinos and African-
Americans?
Mr. Draeger. So from our perspective, the aggregate limit
may not be off. Six years of full-time eligibility may not be
the wrong number. What we would advocate for is more
flexibility that students, so students could enroll on an
ongoing basis. So instead of reaching a summer term, or
semester, and saying I have no more Pell Grant eligibility, and
I am going to stop out, which then increases the likelihood of
them not returning, that they could continue to stay
continuously enrolled by providing them, again, a well of Pell
funds.
Mr. Dannenberg. There has been a lot of talk about the
contemporary student, which I think is a good term as well. The
contemporary bachelor's degree recipient gets their degree in
five years, not four. So when we talk about 150 percent of
time, six years, that is 150 percent of time working off of an
old, antiquated calendar of four years to a bachelor's degree.
It is now five years to a bachelor's degree, so I think we need
to ask ourselves whether we should be pulling back even further
on the amount of eligibility that students have for Pell in
terms of time or dollars.
Ms. Wilson of Florida. Okay. We have talked a lot about
this investment from the states. I would like to find out what
you think can be done to ensure that this investment in higher
education funding on the state level does not continue to erode
the purchasing power of the Pell grant. What can be done to
help with that?
Mr. Dannenberg. I am looking at Congressman--
Ms. Wilson of Florida. Okay.
Mr. Dannenberg. I am looking at Congressman Tierney because
he is the champion of a maintenance-effort provision that
appeared in the College Access Challenge Grant, which is a
small grant program. There was also a maintenance-effort
provision that appeared in the American Recovery and
Reinvestment Act for Higher Education Funding. And states were
responsive, particularly to the AARA maintenance-effort
provision, because there is such a substantial amount of
funding. That is the problem with CACG is that it is too small.
What can be done? The feds can provide a substantial amount
of funds to states and institutions in order to leverage
increased support for higher education, either in terms of
maintaining state investment or push on the institutions to
keep costs down. And you can do that by targeting funds outside
of the Pell Grant program, outside of unsubsidized loans.
Ms. Wilson of Florida. Anyone else? Any incentive idea to
incentivize states to invest more in their colleges?
Dr. Robinson, you said that--I would like for you to
elaborate further on the limited studies that show that some
low-income students respond better to loans than to grants.
What, in your experience and research, have you found to be the
impacts of higher debt burdens on persons' purchasing power,
well-being and lifetime career prospects?
Chairwoman Foxx. Ms. Wilson, I am going to ask Dr. Robinson
if she would submit her response to you in writing--
Ms. Wilson of Florida. Oh, I am out of time.
Chairwoman Foxx. Since you are out of time. And I would
commend to you the study that Dr. Robinson has offered,
entitled ``Pell Grants--Where Does All The Money Go?'' You
may--I am sure she will make available to you a copy of that.
And it has a great bibliography in it, too.
Mr. Tierney, you are recognized for five minutes.
Mr. Tierney. Thank you very much.
Mr. Dannenberg, let me start off where you were talking
earlier. Because we did have a go at trying to put a
maintenance of effort provision into the Higher Education
Opportunity Act and the stimulus on that, with some effect from
all the reports that we have out there. But you are right, the
CACG is very, very small as a set-off on that, and we had quite
a fight just to get that. It was difficult to identify
something that would be meaningful to put at risk for schools
to not maintain their effort.
So when I look at your comment in here about the Education
Trust having 10 offsets to finance a flexible state and
institutional fund for needy students to be given some sort of
guarantee, can you explain a little bit more? Maybe use an
example of what of any of those 10 ideas were, and how that
would work?
Mr. Dannenberg. Sure. We have identified grants, loans and
tax benefits that could be reduced. Let me start with the low-
hanging fruit: tax benefits. The Hope Scholarship Tax Credit
used to limit out at $120,000 in family income. That is 80th
income percentile nationally. The Obama administration, which I
worked in, expanded the higher education tax benefits markedly.
And I think that has been a laudable accomplishment.
But it also increased the income level at which people can
get an American Opportunity tax credit, formerly Hope, all the
way up to $180,000. So we went from the 80th percentile to the
95th percentile. You know, why are providing tax benefits--and
that is some $7 billion a year--to folks who are in the top
income quintile? Why is it that Mitt Romney can get a 520--I
have three 529s. But why can Mitt Romney get a 529 which has
all kinds of tax benefits attached to it, when we have students
who are in desperate need of Pell grants? So those are two on
the tax side. But I think there are others in this committee's
jurisdiction.
Mr. Tierney. So you have to find some way to get that money
back to education as opposed to the general treasury. So if we
can work on that. All right, that is an interesting concept,
but we may follow up with you if you have no objection on that,
to look at some of those other areas.
The other is, you know, the financial incentives to
borrowers and owners that have FFEL loans to get them to
convert their debt to a direct loan on that basis. Have you
worked out the specifics as to how you think that program would
work?
Mr. Dannenberg. Actually, the Department of Education had
administered a small similar program that allowed borrowers who
had both FFEL loans and direct loans to combine them and
consolidate them into the direct loan program, and gave them a
lower interest rate in doing so. What I am suggesting is,
essentially, that effort much, much more aggressively
implemented by the secretary.
Where he went to students who have existing FFEL loans now,
sizeable amounts, and said, ``Look, pay--consolidate into the
direct loan program. We will cut your interest rate, we will
give you cash back, we will lower your principal. And you, the
student, will benefit and us, the taxpayer--the federal
government--will benefit because we won't be paying out as much
in subsidies on these old loans.'' Frankly, which a lot of
providers would like to get off their books because they no
longer have the same incoming stream of new federal family
education loans.
Mr. Tierney. Thank you on that.
And lastly, one of you mentioned at one point, and I will
defer to your memories on that, the cost of books for students.
Mr. Hinojosa and Mr. Miller and I recently filed some
legislation trying to get the textbook materials more
accessible to students through online provisions and otherwise
that would reduce the cost. Does anybody want to speak to the
impact on students for what is now a pretty high cost of
textbooks?
Mr. Heath. Yes. The cost of the textbooks definitely has,
you know, increased over the last number of years. It keeps
going up every year. Most institutions that I am familiar with
have a variety of ways that students can get those books. We
implemented a process a couple of years ago where they can
actually rent the textbooks. So we always have a buy-back
provision so they can bring the textbooks back. When they are
done at the end of the semester, we buy them back. They can
rent them.
They also have the opportunity, of course, to, you know,
purchase their textbooks online from a--you know, non-college
provider. The problem that we have right now that we haven't
been able to solve is for those community college students that
want to buy their books electronically and actually providing
them money up front so that they can get those textbooks
electronically. And we have resisted doing that because we
found historically when we provided money up front--that is,
before the class is actually started--students took the money
and didn't show up for class.
So trying to balance that--you know, that issue, you know,
is an ongoing problem for us.
Mr. Tierney. Thank you.
I yield back.
Chairwoman Foxx. Thank you, Mr. Tierney. I now yield myself
five minutes.
Dr. Robinson, taxpayers deserve to know if their hard-
earned money is being spent appropriately by the federal
government. Your testimony talks about the lack of data points
to show how Pell Grant students are faring in college. And we
have talked a lot about this issue. Several members have raised
questions. But could you share with us what specific data
points should be added into the law during the upcoming
reauthorization to help provide us with better information on
how Pell Grant students are doing?
Ms. Robinson. I think the first fix is to enforce what was
already started in 2008 with the higher education
reauthorization. Go from disclosure of Pell Grant graduation
rates at the institutional level to actually requiring that to
be reported to IPEDS. Disclosure is only minimally useful if it
becomes difficult for researchers and for the Department of
Education to get data on a wide-scale basis. And it is that
wide-scale data that we need in order to do any kind of
methodological look at how Pell students are doing.
Secondly, I think that the beginning postsecondary
education longitudinal data are extremely important. I think it
would be very nice if that could be done more often. Right now,
we are still looking at data that begins in 2003-2004. And from
what I can tell, we can't expect any new data for quite some
time. Seeing that data maybe every five years would be
considerably more helpful than the rate at which we see it
right now. Because it is that longitudinal data that tracks
students over time that allows us to see what happens from the
moment a student enters to where they are four, five, six or 10
years later.
And I think most importantly, that data must be
transparent. The Department of Education obviously needs to be
able to look at the data. But outside organizations, from
NASFAA to the Pope Center, to individual institutions and
schools of education, can add a lot of insight to the arguments
about Pell if they have access to meaningful data.
Chairwoman Foxx. Thank you very much.
Mr. Draeger, can the reforms you talk about in your
testimony--Pell Promise, Pell Well and Super Pell--be
implemented without dramatically increasing the cost of the
program? How can we ensure that the program does not continue
to grow at the rates we have seen over the past five or six
years?
Mr. Draeger. We have already seen the cost of the Pell
Grant program leveling out. And so partly because of a partial,
or slow, recovery and partially because Congress has rolled
back some of the eligibility criteria that it had originally
implemented five, six, seven years ago. And in my written
remarks I have included an appendix of those eligibility
changes. The reforms that we have put forward we don't believe,
over a five or 10-year period of time, would cost dramatically
more, because Congress has already put in place limitations on
the full extent to which students can utilize a Pell Grant.
And what we are talking about is now making that Pell Grant
information available to students much earlier, and giving them
more flexibility so that that contemporary student can use them
for an innovative--in an innovative learning model program, a
competency-based program, or on an ongoing basis until they
have exhausted eligibility.
Chairwoman Foxx. Thank you very much.
Mr. Heath, how can the federal government assist
institutions in preventing fraud, while easing the burden on
financial aid offices?
Mr. Heath. Well, I think that they can continue to do what
they started to do about 18 months ago when this was becoming
more of a problem nationwide. The follow up with the students
that show up on our records when they come in is extensive. But
what we have found in that follow up is that many of those
students were not really legitimate students. That is, the
transcripts that came in from other colleges, when they finally
turned them in, showed little or no academic progress
whatsoever.
So they can continue to do what they put into place, but
certainly require every college that has large numbers of
students that are moving from school to school to make sure
that those records that they get in have been thoroughly
reviewed. And those that are not progressing academically when
they are changing schools, that the eligibility for financial
aid simply is not there coming through the door. That is, they
would have to come in and establish their own academic record
at that college.
Chairwoman Foxx. Thank you very much.
I want to thank all of our witnesses here today. You are a
distinguished panel, and we very much appreciate your taking
the time to appear before the subcommittee today. And you have
given us a lot to think about, a lot to read. Your testimony is
pretty expansive, the written testimony. There is a lot to read
and to consider.
Mr. Tierney, do you have some closing remarks?
Mr. Tierney. Well, I do, Madam Chairwoman. On behalf of the
ranking member, I just also--and the other members of the
panel, I want to thank you for your efforts here today, for the
work that you prepared in advance and your testimony. And I
suspect, your availability in an ongoing basis to help us sort
of formulate some policies on that. The ranking member and the
other members want to let you know that we want to strengthen
the Pell Grant program.
We want to continue to expand affordability and
accessibility to college. And hopefully, both sides of the
aisle will work towards strengthening the Pell Grant program
and that affordability and make it a top priority for Congress.
So with your efforts and your help we will be able to move in
that direction. And thank everyone for their work on this
hearing.
Chairwoman Foxx. Thank you, Mr. Tierney.
Most of my colleagues have made comments about having come
from low-income families, worked their way through college,
some of them utilizing the Pell Grant. I think any of us who
have been involved in higher education understand the value of
the Pell Grant program. I will one-up my friends a little bit
by saying not only did I come from an extremely low-income
family--I worked my way through school--but I worked with
students who received Pell Grants. I was around in 1972, when
the BEOG program started, and I remember it very well.
I was working with Upward Bound students and low-income
students at Appalachian State University. I ran a special
services program and a program for disadvantaged Appalachian
and African-American students. So I am very well aware of the
value of financial aid, and particularly the Pell Grant
program. So I know we all want to strengthen the program so
that it is available to the truly needy students. Because there
are students out there who need it, and there are students who
can benefit from the program, and who can benefit our culture
as a result of attending higher education.
We want to utilize these hearings to highlight the problems
or concerns that exist, and figure out ways we can update the
federal laws to ensure they are keeping up with how our
universities are educating students. So today, I have noticed a
plethora of dueling statistics--maybe more than usual--in our
comments. So I want us to keep in mind how we utilize
statistics to define the problems that exist.
Several of you have discussed how the buying power of Pell
Grants has decreased significantly over time. Yet according to
figures calculated by the Congressional Research Service, the
Pell Grant covers approximately 72 percent of the published in-
state tuition and fees at 4-year public institutions.
We know that it covers more than enough of the cost of fees
and tuition at community colleges. I think we can all find
statistics to help us define our arguments and our points. We
just need to make sure that we understand the context in which
the statistics are being used. And I think as we go through
with further hearings and looking at these programs, we will do
our best to make sure that we have data. And I think all of
you, especially Dr. Robinson, has pointed out the need for us
to get reliable information. And that is something I am very
much interested in, and I think all of us are, again, so that
we can make sure the truly needy students are getting the help
they need.
So again I thank everyone for being here, my colleagues on
both sides of the aisle. And there being no further business,
the hearing is adjourned.
[Additional submission of Mr. Hinjosa follows:]
Prepared Statement of the American Indian Higher Education Consortium
On behalf of the nation's 37 Tribal Colleges and Universities
(TCUs), which collectively are the American Indian Higher Education
Consortium (AIHEC), we write to commend the Subcommittee for examining
ways to strengthen the Pell Grant Program and appreciate the
opportunity to share the perspectives of the TCUs and the students they
serve.
TCUs are open enrollment institutions that were created in response
to the higher education needs of American Indians/Alaska Natives and
generally serve very low income, geographically isolated populations
that have no other means to access education beyond the high school
level. TCUs have become increasingly important to educational
opportunity for Native students offering high quality, culturally
relevant higher education opportunities to encourage American Indians/
Alaska Natives to overcome the barriers they face to higher education.
The importance of Pell Grants to TCUs and TCU students simply
cannot be overstated--More than three quarters of TCU students receive
Pell Grants. At $100 per credit hour, tuition rates at TCUs are among
the lowest in the nation, but the cost of attending any college is not
``affordable'' to students with average annual incomes of less than
$18,000 without meaningful and stable federal assistance.
Pell Grants are the bedrock of the student aid programs and must
provide a stable source of funding for low-income students. The maximum
Pell Grant has increased in recent years, but various shortfalls,
budget debates, proposed and impending cuts to the program would
prevent it from being described as ``stable'' for TCUs students that
rely on this funding to pursue higher education goals. Protecting Pell
from ongoing Congressional budget debates and offering measures of
certainty in funding would help Native students realize their
postsecondary education aspirations.
At this hearing and others from the ``Keeping College within
Reach'' series, the Subcommittee has heard numerous proposals to
simplify the financial aid process and make selecting and paying for
postsecondary education more consumer friendly. TCUs are leaders in
promoting accessible postsecondary options for American Indians/Alaska
Natives and would welcome new policies and programs designed to
increase awareness of higher education and financial aid opportunities.
However,
AIHEC member institutions are also concerned about unintended or
unforeseen consequences of major changes to the student aid programs.
As the Committee further develops proposals to reform the Title IV
programs, we ask that you be mindful of the potential impact of policy
changes to TCUs and seek the counsel of TCUs, through AIHEC, to ensure
federal programs are leveraged to the maximum benefit of Indian
Country.
Remediation & ``Contemporary Students'' at TCUs
Chairwoman Foxx and others on the Subcommittee have commented on
the need to replace the term ``non-traditional student,'' noting these
students are now the norm in higher education and suggesting the term
``contemporary student'' may be more appropriate. TCUs commend the
Subcommittee for this realization. However, if designed improperly or
without adequate review, proposals aimed at reducing spending on Pell
Grants and bringing further accountability to recipients could result
in greatly reduced postsecondary educational opportunities available to
`contemporary' students. For example, at a time when the nation is
focused on increasing not just access but completion rates for
America's college students, a recent budget agreement immediately
reduced Pell Grant eligibility from 18 to 12 semesters, with no phase-
in or grandfathering component for current recipients. This resulted in
some students finding themselves ineligible for further Pell Grants and
therefore unable to complete their degree programs. Though 12 semesters
of eligibility may seem sufficient for so-called traditional students,
this limit can be highly restrictive for students who need remediation.
A recent survey of placement test results at TCUs indicate that 64
percent of incoming students required remedial math, 78 percent
required remedial writing, and 60 percent required remedial reading.
Though student aid funds cannot be used exclusively for remediation
coursework, they can be used for remedial work on the path toward a
degree and can require as much as one full year of a student's Title IV
eligibility. The federal government should recognize that effective,
well-funded remediation programs are essential to improving higher
education access and success rates among low-income students and
provide extended eligibility for students completing these courses as
part of a degree or certificate program. Restricting eligibility for
remedial or developmental courses is no way to recognize contemporary
students.
``Sometimes, our students come in unprepared for college work. They
use up quite a bit of their Pell [Grant eligibility] taking
developmental courses, so we might encourage them to transfer without a
degree so they'll still have some of their Pell [Grant] for attending
the four-year college,'' said David Yarlott, President of Little Big
Horn College, Crow Agency, MT. ``We'd like to have those increased
degree (completion) numbers, but we have to think of our students'
needs first.''
As Congress considers HEA reauthorization and the Administration's
efforts to rate colleges, the Committee should be mindful of
limitations on certain program measures such as graduation rates.
Though program accountability is critical, it is incredibly important
that federal policy not punish colleges and universities for ``thinking
of our students' needs first.''
Summer Pell
Pell Grant eligibility for more than two semesters of coursework,
or ``summer Pell,'' was another casualty of a recent budget debate. For
three years this change in policy appeared to be working as summer
enrollments were up at TCUs, community colleges, four-year colleges and
universities, and even for-profit institutions. The elimination of
summer Pell has and will continue to restrict the opportunities
available to contemporary students.
In a cruel irony, the loss of summer Pell will have less of an
impact at some TCUs due to sequestration. Faced with significant cuts
in federal funding, many TCUs had to eliminate summer programs this
year. For instance, Sitting Bull College, located on the Standing Rock
Sioux reservation in North Dakota and South Dakota had to address a cut
of nearly $1 million, which forced the college to close its doors this
past summer. The campus closure not only prevented the offering of
college courses, it also eliminated programs for high school and middle
school students, which of course meant the elimination of several
months of income for many of those that are employed at the college.
Additional Information on Tribal Colleges and Universities
TCUs are public institutions of higher education chartered by their
respective tribal governments, including the ten tribes within the
largest reservations in the United States. They operate more than 75
campuses in 15 states--virtually covering Indian Country--and serve
students from well more than 250 federally recognized Indian tribes.
TCUs vary in enrollment (size), focus (liberal arts, sciences,
workforce development/training), location (woodlands, desert, frozen
tundra, rural/isolated reservation, urban), and student population
(primarily American Indian). However, tribal identity is the core of
every TCU and they share a common mission of tribal self-determination
and service to their respective community.
These academically rigorous, culturally appropriate institutions
engage in partnerships with federal agencies and other universities
nationwide to support research and education programs that focus on
issues such as sustainable agriculture, water quality, climate change,
wildlife population dynamics, behavioral health, and diabetes control
and prevention. The majority of faculty, teaching staff, and
administrators hold a master's or doctoral degree. Dedicated faculty
and staff often serve double-duty as counselors and mentors in addition
to their teaching and administrative roles.
TCUs provide many services to help students stay in school and
complete their studies, such as personal and career counseling,
mentoring, tutoring, wellness programs, child care, lending of laptop,
and transportation and housing assistance. Many support distance
learning involving state-of-the-art learning environments. Community
members often take advantage of the TCU libraries and computer labs, as
well as a range of community service programs, such as business
incubators and health and wellness events and workshops.
Tribal Colleges and Universities are providing access to high
quality higher education opportunities to many thousands of American
Indians/Alaska Natives and non-native students, as well as essential
community services and programs to many more. Keeping the Pell Grant
program vital and strong is vital to the continued postsecondary
success in Indian Country.
For additional information on TCUs, we recommend Subcommittee
members and their staff review The AIHEC AIMS Fact Book as it provides
an in-depth profile of TCUs and the students they serve. It is included
with this statement as an appendix. The report is available online:
http://www.aihec.org/resources/documents/AIHEC-AIMSreport--May2012.pdf
______
[Whereupon, at 12:01 p.m., the subcommittee was adjourned.]
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