[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]


 
                       REVIEWING THE PRESIDENT'S
                    FISCAL YEAR 2013 BUDGET PROPOSAL
                  FOR THE U.S. DEPARTMENT OF EDUCATION

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

                                HEARING

                               before the

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

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

             HEARING HELD IN WASHINGTON, DC, MARCH 28, 2012

                               __________

                           Serial No. 112-57

                               __________

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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                       Dale E. Kildee, Michigan
Judy Biggert, Illinois               Robert E. Andrews, New Jersey
Todd Russell Platts, Pennsylvania    Robert C. ``Bobby'' Scott, 
Joe Wilson, South Carolina               Virginia
Virginia Foxx, North Carolina        Lynn C. Woolsey, California
Bob Goodlatte, Virginia              Ruben Hinojosa, Texas
Duncan Hunter, California            Carolyn McCarthy, New York
David P. Roe, Tennessee              John F. Tierney, Massachusetts
Glenn Thompson, Pennsylvania         Dennis J. Kucinich, Ohio
Tim Walberg, Michigan                Rush D. Holt, New Jersey
Scott DesJarlais, Tennessee          Susan A. Davis, California
Richard L. Hanna, New York           Raul M. Grijalva, Arizona
Todd Rokita, Indiana                 Timothy H. Bishop, New York
Larry Bucshon, Indiana               David Loebsack, Iowa
Trey Gowdy, South Carolina           Mazie K. Hirono, Hawaii
Lou Barletta, Pennsylvania           Jason Altmire, Pennsylvania
Kristi L. Noem, South Dakota         Marcia L. Fudge, Ohio
Martha Roby, Alabama
Joseph J. Heck, Nevada
Dennis A. Ross, Florida
Mike Kelly, Pennsylvania

                      Barrett Karr, Staff Director
                 Jody Calemine, Minority Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on March 28, 2012...................................     1

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

Statement of Witnesses:
    Duncan, Hon. Arne, Secretary, U.S. Department of Education...     8
        Prepared statement of....................................    14

Additional Submissions:
    Secretary Duncan:
        May 23, 2012, response to questions submitted for the 
          record.................................................    72
        July 25, 2012, response to additional questions submitted 
          for the record.........................................   102
    Foxx, Hon. Virginia, a Representative in Congress from the 
      State of North Carolina, question submitted for the record.    70
    Chairman Kline:
        April 25, 2012, questions submitted for the record.......    64
        June 25, 2012, additional questions submitted for the 
          record.................................................    98
    Noem, Hon. Kristi L., a Representative in Congress from the 
      State of South Dakota, question submitted for the record...    71
    Petri, Hon. Thomas E., a Representative in Congress from the 
      State of Wisconsin, questions submitted for the record.....    70


                       REVIEWING THE PRESIDENT'S
                    FISCAL YEAR 2013 BUDGET PROPOSAL
                  FOR THE U.S. DEPARTMENT OF EDUCATION

                              ----------                              


                       Wednesday, March 28, 2012

                     U.S. House of Representatives

                Committee on Education and the Workforce

                             Washington, DC

                              ----------                              

    The committee met, pursuant to call, at 10:03 a.m., in room 
2128, Rayburn House Office Building, Hon. John Kline [chairman 
of the committee] presiding.
    Present: Representatives Kline, Petri, Biggert, Platts, 
Foxx, Goodlatte, Hunter, Roe, Thompson, Walberg, DesJarlais, 
Hanna, Rokita, Bucshon, Barletta, Roby, Heck, Ross, Kelly, 
Miller, Kildee, Andrews, Scott, Woolsey, Hinojosa, McCarthy, 
Tierney, Kucinich, Holt, Davis, Bishop, and Fudge.
    Staff present: Jennifer Allen, Press Secretary; Katherine 
Bathgate, Press Assistant/New Media Coordinator; James 
Bergeron, Director of Education and Human Services Policy; 
Casey Buboltz, Coalitions and Member Services Coordinator; 
Heather Couri, Deputy Director of Education and Human Services 
Policy; Cristin Datch, Professional Staff Member; Lindsay 
Fryer, Professional Staff Member; Amy Raaf Jones, Education 
Policy Counsel and Senior Advisor; Barrett Karr, Staff 
Director; Brian Melnyk, Legislative Assistant; Krisann Pearce, 
General Counsel; Mandy Schaumburg, Education and Human Services 
Oversight Counsel; Dan Shorts, Legislative Assistant; Alex 
Sollberger, Communications Director; Linda Stevens, Chief 
Clerk/Assistant to the General Counsel; Alissa Strawcutter, 
Deputy Clerk; Brad Thomas, Senior Education Policy Advisor; 
Kate Ahlgren, Minority Investigative Counsel; Tylease Alli, 
Minority Clerk; Kelly Broughan, Minority Staff Assistant; 
Daniel Brown, Minority Policy Associate; Steven Byrd, Minority 
Detailee, Education; Jody Calemine, Minority Staff Director; 
Tiffany Edwards, Minority Press Secretary for Education; Jamie 
Fasteau, Minority Deputy Director of Education Policy; Brian 
Levin, Minority New Media Press Assistant; Kara Marchione, 
Minority Senior Education Policy Advisor; Megan O'Reilly, 
Minority General Counsel; Julie Peller, Minority Deputy Staff 
Director; and Laura Schifter, Minority Senior Education and 
Disability Advisor.
    Chairman Kline. A quorum being present, the committee will 
come to order. Good morning.
    Welcome back, Secretary Duncan. We realize your time is 
valuable and we appreciate the opportunity to speak with you 
today about the president's budget proposal.
    When we met this time last year we discussed the importance 
of using taxpayer dollars wisely, particularly in these times 
of economic instability. We identified areas of education 
spending that have failed to show results and stressed the need 
for an education system that is more accountable, transparent, 
and flexible. Most notably, my colleagues and I reiterated our 
support for a less costly, less intrusive federal role in the 
nation's classrooms.
    The committee has since worked to eliminate unnecessary 
programs and reduce federal intervention in schools and 
colleges. As you know, we recently approved two pieces of 
legislation to rewrite elementary and secondary education law 
and also secured bipartisan House passage of a bill that will 
get rid of unnecessarily burdensome federal regulations 
affecting the institutions of higher education.
    Regrettably, the administration has taken a markedly 
different course, advancing several programs and initiatives 
that make the federal role in education more costly and more 
intrusive. In his fiscal year 2013 budget proposal the 
president requests nearly $70 billion for the Department of 
Education plus an additional $13 billion in mandatory spending 
for Pell Grants, bringing the total to roughly $83 billion, a 
40 percent increase in the department's budget from the time 
the president took office. Furthermore, the president requests 
another $65 billion in funds for new community college, 
teacher, and school construction programs as part of his 
American Jobs Act.
    Despite ramping up funding for pet projects and 
unauthorized programs, such as Race to the Top, school 
improvement grants, Investing in Innovation, and others, I am 
disappointed the president's budget proposal once again 
neglects to increase support for Part B of the Individuals with 
Disabilities Education Act. Mr. Secretary, you and I have 
previously discussed the importance of this program, which 
helps States and school districts improve services and 
education access for students with special needs.
    The administration couldn't be bothered to put even one 
additional dollar toward the IDEA Part B program, which 
benefits students in virtually every school in America, yet the 
president can find billions of dollars to put toward school 
construction and teacher union bailouts. It is unacceptable to 
continue defaulting on this obligation. We must stop wasting 
taxpayer dollars on new and ineffective programs, reassess our 
priorities, and make the tough choices necessary to uphold our 
commitment to all students.
    I am also troubled by the department's newfound penchant 
for advancing programs and initiatives that further expand the 
federal role in education without any congressional input or 
engagement. The conditional waivers plan presents a clear 
example of this trend. Not only does the plan empower the 
Secretary of Education to unilaterally dictate federal 
education policy--with questionable legal standing--but the 
obscure process for granting these quid pro quo waivers leads 
me to question whether States are being pressured to adopt the 
administration's preferred reforms.
    Furthermore, this waivers initiative distracts from House 
and Senate progress to rewrite K-12 law, which should be our 
shared goal. While areas of disagreement must still be 
addressed, both chambers have produced legislation to 
reauthorize the Elementary and Secondary Education Act. To 
cease working with us at this point signals a dearth of 
leadership in the executive branch.
    The higher education proposals outlined in the present 
budget represent another expansion of federal authority that I 
fear will ultimately lead to more headaches for students, 
parents, and institutions. We all want to help more students 
realize the dream of a college degree. However, we must be 
extremely cautious about policies that manipulate student loan 
interest rates and use need-based student aid subsidies, such 
as the Perkins Loan and Work Study programs, as bargaining 
chips to impose federal price controls.
    Addressing the challenge of rising college costs merits 
thoughtful discussion among leaders in Washington as well as 
State and higher education officials. We must expose and 
resolve the underlying factors that are fueling this trend. 
Students and their families need lasting solutions, not employ 
promises and short-term initiatives that kick the can down the 
road.
    One area in which I believe we can forge agreement is the 
president's proposal to make higher education data more 
transparent and accessible for students and their parents. 
According to recent reports, a majority of student loan 
borrowers admit they didn't fully understand what they were 
getting into when they took out student loans. Republicans have 
long fought to help families and students access clear, 
comparable information about the real bottom-line cost of a 
college education.
    I am interested in discussing this issue with you, Mr. 
Secretary, as part of a larger dialogue regarding responsible 
initiatives that meet the needs of students and taxpayers.
    Improving education in America is a priority for everyone 
in this room. However, we cannot make progress in this endeavor 
if the administration continues to bypass Congress and promote 
its own costly education agenda.
    I look forward to your testimony, Mr. Secretary, and hope 
we can find a way to move past what has become an increasingly 
bumpy road.
    I will now recognize the distinguished senior Democratic 
member of the committee, George Miller, for his opening 
remarks.
    [The statement of Mr. Kline follows:]

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

    Welcome back, Secretary Duncan, to the Education and the Workforce 
Committee. We realize your time is valuable and we appreciate the 
opportunity to speak with you today about the president's budget 
proposal.
    When we met this time last year, we discussed the importance of 
using taxpayer dollars wisely, particularly in these times of economic 
instability. We identified areas of education spending that have failed 
to show results, and stressed the need for an education system that is 
more accountable, transparent, and flexible. Most notably, my 
colleagues and I reiterated our support for a less costly, less 
intrusive federal role in the nation's classrooms.
    The committee has since worked to eliminate unnecessary programs 
and reduce federal intervention in schools and colleges. As you know, 
we recently approved two pieces of legislation to rewrite elementary 
and secondary education law, and also secured bipartisan House passage 
of a bill that will get rid of unnecessarily burdensome federal 
regulations affecting institutions of higher education.
    Regrettably, the administration has taken a markedly different 
course, advancing several programs and initiatives that make the 
federal role in education more costly and more intrusive. In his Fiscal 
Year 2013 budget proposal, the president requests nearly $70 billion 
for the Department of Education plus an additional $13 billion in 
mandatory spending for Pell Grants, bringing the total to roughly $83 
billion--a 40 percent increase in the department's budget from the time 
the president took office. Furthermore, the president requests another 
$65 billion in funds for new community college, teacher, and school 
construction programs as part of his American Jobs Act.
    Despite ramping up funding for pet projects and unauthorized 
programs, such as Race to the Top, school improvement grants, Investing 
in Innovation, and others, I am disappointed the president's budget 
proposal once again neglects to increase support for Part B of the 
Individuals with Disabilities Education Act.
    Mr. Secretary, you and I have previously discussed the importance 
of this program, which helps States and school districts improve 
services and education access for students with special needs. The 
administration couldn't be bothered to put even one additional dollar 
toward the IDEA Part B program, which benefits students in virtually 
every school in America, yet the president can find billions of dollars 
to put toward school construction and teacher union bailouts. It is 
unacceptable to continue defaulting on this obligation. We must stop 
wasting taxpayer dollars on new and ineffective programs, reassess our 
priorities, and make the tough choices necessary to uphold our 
commitment to all students.
    I am also troubled by the department's newfound penchant for 
advancing programs and initiatives that further expand the federal role 
in education--without any Congressional input or engagement. The 
conditional waivers plan presents a clear example of this trend. Not 
only does the plan empower the Secretary of Education to unilaterally 
dictate federal education policy--with questionable legal standing--but 
the obscure process for granting these quid pro quo waivers leads me to 
question whether States are being pressured to adopt the 
administration's preferred reforms.
    Furthermore, this waivers initiative distracts from House and 
Senate progress to rewrite K-12 law, which should be our shared goal. 
While areas of disagreement must still be addressed, both chambers have 
produced legislation to reauthorize the Elementary and Secondary 
Education Act. To cease working with us at this point signals a dearth 
of leadership in the executive branch.
    The higher education proposals outlined in the president's budget 
represent another expansion of federal authority that I fear will 
ultimately lead to more headaches for students, parents, and 
institutions. We all want to help more students realize the dream of a 
college degree. However, we must be extremely cautious about polices 
that manipulate student loan interest rates and use need-based student 
aid subsidies such as the Perkins Loan and Work Study programs as 
bargaining chips to impose federal price controls.
    Addressing the challenge of rising college costs merits thoughtful 
discussion among leaders in Washington as well as State and higher 
education officials. We must expose and resolve the underlying factors 
that are fueling this trend. Students and their families need lasting 
solutions--not empty promises and short-term initiatives that kick the 
can down the road.
    One area in which I believe we can forge agreement is the 
president's proposal to make higher education data more transparent and 
accessible for students and their parents. According to recent reports, 
a majority of student loan borrowers admit they didn't fully understand 
what they were getting into when they took out student loans. 
Republicans have long fought to help families and students access 
clear, comparable information about the real bottom-line cost of a 
college education. I am interested in discussing this issue with you, 
Mr. Secretary, as part of a larger dialogue regarding responsible 
initiatives that meet the needs of students and taxpayers.
    Improving education in America is a priority for everyone in this 
room. However, we cannot make progress in this endeavor if the 
administration continues to bypass Congress and promote its own costly 
education agenda. I look forward to your testimony, Secretary Duncan, 
and hope we can find a way to move past what has become an increasingly 
bumpy road.
                                 ______
                                 
    Mr. Miller. Thank you, Mr. Chairman.
    And welcome, Mr. Secretary, and thank you for spending time 
with the committee. First of all, I would like to thank you for 
your tireless commitment to improving education for all 
students. From children in early childhood programs to college 
students, I agree with you and President Obama that education 
is the cornerstone of economic security for individuals and for 
our country.
    Just last week another report was issued on the importance 
of high quality education system and maintaining our nation's 
status in the world. An independent task force launched by 
Council on Foreign Relations found that the U.S. education 
system is facing a national security crisis.
    The chairs of that report, former New York City School 
System Chancellor Joel Klein and former Secretary of State 
Condoleezza Rice, say that education failures pose several 
threats to our national security. These failures threaten our 
economic growth and our competitiveness and U.S. physical 
security and intellectual property.
    The report found that among those who are qualified for the 
armed services, many are not academically prepared. An alarming 
30 percent don't pass the military's aptitude test. Simply put, 
our students are not being prepared well enough to protect our 
national security or to compete in the global workforce.
    As we all know the role of quality education plays in 
growing and maintaining a strong economy, a role that will only 
become more important over time. Yet last week the House 
Republicans introduced, and passed out of the Budget Committee 
for fiscal year 2013, a budget that threatens our education 
system and therefore the strength of our economy.
    We should be investing in the education system. Instead, 
the Republican budget cuts Title I, denying critical support 
for thousands of schools and millions of children; cuts support 
to keep teachers in the classroom as opposed on to the 
unemployment line; cuts support for special education--the 
president may not have added money to special education but he 
didn't cut $2 billion, as the Republicans are doing in their 
budget--and support for students with disabilities and teachers 
who educate them and cuts access to Head Start.
    The Republican budget also is devastating to higher 
education and slashes the Pell Grant program and eliminates 
eligibility requirements intended to ensure the students who 
need Pell the most benefit from the program. The Republican 
budget makes student loans more expensive for students with 
financial need by allowing the interest rate to double in July 
of this year and by removing the in-school interest subsidies.
    We should not ask low-income and middle-income Americans to 
shoulder the burden of the entire deficit reduction while 
simultaneously delivering massive tax cuts to the richest 1 
percent and preserving huge giveaways to oil companies. And 
yet, this is what the Republican budget will do and what the 
House was debating this week.
    We know from the president's budget it doesn't have to be 
that way. We can be fiscally responsible as a nation while 
making strategic investments in our future if ideology does not 
trump what is in the best interest of America.
    For example, the president's budget request makes important 
investments in early childhood education, allowing 960,000 
young children, including approximately 114,000 infants and 
toddlers, to continue to receive comprehensive early childhood 
services. It ensures that individuals are educated and trained 
to work in this economy, and particularly the proposed 
Community College to Career Fund, which would help students 
gain critical job training skills that local businesses need.
    It builds on responsible decisions that empower States, 
districts, and schools to pursue bold reforms and it continues 
to make higher education more accessible for families and 
students for whom a degree may have been out of reach. This 
includes providing affordable loans to students with financial 
need.
    The president's budget request recognizes that a high 
quality education is absolutely critical to rebuilding our 
economy and strengthening the American workforce requires that 
we continue to invest in education. To ignore that connection 
would only mean negative outcomes for students, parents, and 
employers.
    Mr. Secretary, as you know, the committee recently marked 
up two partisan pieces of legislation to reauthorize ESEA. The 
Democrats adamantly oppose the Republican bills. We believe 
that their proposals set low bars on quality, dismantle 
accountability, and are fiscally irresponsible.
    With Congress at a standstill, your department took steps 
to grant States flexibility in certain parts of No Child Left 
Behind in exchange for adopting reforms that include college 
and career ready standards, new accountability and school 
improvement systems, and meaningful teacher and student leader 
evaluations. While I would much prefer the full ESEA 
reauthorization, I am pleased at the department's efforts to 
give schools the relief they so desperately need.
    It shows that, despite partisanship in the Congress, the 
administration is moving forward and providing kids access to a 
world-class education. And between Race to the Top and your 
policy on waivers you have created more school reform in the 
States than any time in recent history--more school reform on 
the use of technology, on the use of data, on teacher 
preparation and evaluation than we have seen in the last 25 
years.
    And I am pleased that the waiver package includes policies 
to support this modern education system and to promote and 
protect our nation's economy and security. In the meantime, we 
in Congress have a responsibility to move serious reform, 
lasting change that will lead to a long-term student success.
    The need is urgent and the time is short and I look forward 
from hearing from you, Mr. Secretary, how we can work together 
to make sure that our students succeed at their educational 
opportunities.
    Thank you.
    [The statement of Mr. Miller follows:]

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

    Thank you, Mr. Chairman.
    And welcome back, Mr. Secretary.
    First, I want to thank you for your tireless commitment to 
improving education for all students--from children in early childhood 
programs to college students. I agree with you and President Obama that 
education is the cornerstone of economic security for individuals and 
for our country as a whole.
    Just last week yet another report was issued on the importance of a 
high quality education system in maintaining our nation's status in the 
world.
    An independent task force launched by the Council on Foreign 
Relations found that the U.S. education system is facing a national 
security crisis.
    The chairs of the report--former New York City school system 
chancellor Joel Klein and former Secretary of State Condoleezza Rice--
say education failures pose several threats to our national security.
    These failures threaten our economic growth and competitiveness, 
U.S. physical safety and intellectual property. The report found that, 
among those who are qualified for the armed forces, many are not 
academically prepared--an alarming 30% don't pass the military's 
aptitude test.
    Simply put: Our students are not being prepared well enough to 
protect our national security, or to compete in the global workforce. 
We all know the role a quality education plays in growing and 
maintaining a strong economy--a role that will only become more 
important over time.
    And yet last week, the House Republicans introduced and passed out 
of the Budget Committee a fiscal year 2013 budget that threatens our 
education system and therefore the strength of our economy.
    We should be investing in this system. Instead, the Republican 
budget:
     Cuts Title I, denying critical support to thousands of 
schools and millions of children;
     Cuts support that helps keep teachers in the classroom as 
opposed to the unemployment line;
     Cuts funding for special education to support students 
with disabilities and the teachers who educate them; and
     Cuts access to Head Start.
    The Republican budget is also devastating to higher education.
     It slashes the Pell Grant program.
     It eliminates eligibility criteria intended to ensure that 
students who need Pell the most benefit from the program.
     And it cuts tens of billions of dollars in funding we 
already paid for.
    The Republican Budget makes student loans much more expensive for 
students with financial need not only by allowing the rate on need-
based loans to double this July, but also by removing their in-school 
interest subsidies.
    We shouldn't ask low-income and middle-class Americans to shoulder 
the entire burden of deficit reduction while simultaneously delivering 
massive tax breaks to the richest one percent and preserving huge 
giveaways to oil companies. And yet this is what the Republican budget 
will do and what the House will debate this week.
    We know from the President's budget that it doesn't have to be this 
way. We can be fiscally responsible as a nation while making strategic 
investments in our future if ideology does not trump what's in the best 
interest of children and families.
    For example, the President's budget request makes important 
investments in early childhood education, allowing 962,000 young 
children, including approximately 114,000 infants and toddlers, to 
continue to receive comprehensive early education services.
    It ensures individuals are educated and trained to work in this 
economy. In particular, the proposed ``Community College to Career 
Fund'' would help students gain crucial job training skills that local 
businesses need.
    It builds on responsible decisions that empower States, districts 
and schools to pursue bold reforms. And, it continues to make higher 
education more accessible for families and students for whom a degree 
may have been out of reach. This includes providing affordable loans to 
students with financial need.
    The President's budget request recognizes that a high-quality 
education is absolutely critical to rebuilding our economy and a 
strengthened American workforce requires that we continue to invest in 
education. To ignore that connection would only mean negative outcomes 
for students, parents and employers.
    Mr. Secretary, as you know, this Committee recently marked up two 
partisan pieces of legislation to reauthorize ESEA.
    Democrats adamantly oppose the Republican bills. We believe that 
their proposals set low bars on quality, dismantle accountability, and 
are fiscally irresponsible.
    With Congress at a standstill, your Department took steps to grant 
States flexibility from certain parts of No Child Left Behind in 
exchange for adopting reforms that include college and career ready 
standards, new accountability and school improvement systems, and 
meaningful teacher and school leader evaluations.
    While I would much prefer a full ESEA reauthorization, I am pleased 
with the Department's efforts to give schools the relief they so 
desperately need.
    It shows that despite partisanship in Congress, the Administration 
is moving forward with providing kids access to a world-class 
education. And I am pleased that the waiver package includes policies 
to support a modern education system to protect and promote our 
nation's economy and security.
    In the meantime, we in Congress have a responsibility to move 
serious reform--lasting change that will lead to long-term student 
success. The need is urgent and the time is short.
    I look forward to hearing from you, Mr. Secretary, about how we can 
work together to help all students succeed.
    I yield back.
                                 ______
                                 
    Chairman Kline. I thank the gentleman.
    It is now my pleasure to introduce our distinguished 
witness. And of course, the Honorable Arne Duncan actually 
needs no introduction to this body.
    But, Mr. Secretary, I have to say, I was looking at my 
notes here and noticing that you were confirmed by the Senate 
on Inauguration Day--January 20th, 2009. That sort of puts you 
in the trenches very quickly.
    Anyway, we are glad to have you back. Welcome. You know the 
lighting system very well. We will not gavel you down in the 
middle of your statement; we need to hear from you.
    You are recognized, sir.

           STATEMENT OF HON. ARNE DUNCAN, SECRETARY,
                  U.S. DEPARTMENT OF EDUCATION

    Secretary Duncan. Thank you so much, Chairman Kline, and 
Ranking Member Miller, and to all the members of this 
committee. I really appreciate the opportunity to talk about 
President Obama's fiscal year 2013 budget for our Department of 
Education.
    This budget reflects President Obama's firm belief that our 
country has always done best when everyone gets a fair shot, 
everyone does their fair share, and everyone plays by the same 
rules. Our budget reflects the administration's dual commitment 
to reducing spending and becoming more efficient, and also 
investing to secure our nation's future. Investments in 
education are investments that strengthen our global economic 
competitiveness.
    A recent survey by the Business Roundtable's Education and 
Workforce Committee, chaired by the chairman and CEO of 
ExxonMobil, Rex Tillerson, found that half of all U.S. 
employers report a sizeable gap between the current needs and 
the skills of their employees. According to the BRT, the United 
States ranks 52nd out of 139 countries on math and science 
education. If we can return to being a top performing education 
nation by 2025 it would help produce a 5 percent GDP increase 
in the years that followed.
    And, Congressman Miller, you talked about the Council on 
Foreign Relations Task Force, and their findings are pretty 
stark. They found that the State Department is struggling to 
recruit enough foreign language speakers. They found that U.S. 
generals are cautioning that enlistees cannot read training 
manuals for sophisticated equipment. And a report from the 28th 
Airborne Corps in Iraq found that out of 250 intelligence 
personnel fewer than five had the aptitude to put pieces 
together to form a conclusion.
    Few issues--few issues touch so many parts of our lives, 
and few investments are as important to our safety and to our 
well being as education. Today all across America people are 
meeting the challenge of improving education in many different 
ways, from creating high quality early learning programs, to 
raising standards, improving teacher quality, aggressively 
closing achievement gaps, and increasing both high school and 
college completion.
    While the federal government contributes less than 10 
percent of K-12 funding nationally, our dollars do play a 
critical role in promoting both excellence and equity, 
protecting children most at risk, and more recently, supporting 
significant reform at the State and at the local levels. Our 
administration has used limited competitive dollars to 
encourage States and local educators to think and to act 
differently. And through programs like Race to the Top we have 
worked with governors and educators to jointly undertake bold 
systemic reforms.
    As a result of Race to the Top, 46 States created 
comprehensive reform plans with buy-in from governors, 
legislators, local educators, union leaders, business leaders, 
and parents. For an investment of less than 1 percent of total 
K-12 spending we have seen more reforms across the country in 
the past couple years than we have over the previous decade. 
Even before we spent a single dime of taxpayer money 32 States 
changed over 100 laws and policies to improve the opportunities 
for children to learn.
    We have also seen the transformative impact of Race to the 
Top in communities across the country from Ohio, where funds 
have helped rural districts partner on principal and teacher 
training, to Tennessee, where STEM coaches are helping to 
improve the skills of K-12 math and science teachers, and 
Georgia, where public-private partnerships have formed to 
prevent at-risk youth from dropping out of school. Race to the 
Top is making a big difference in the lives of children and 
transforming public education as we know it.
    And I am happy to report that thanks to continued 
congressional support for comprehensive education reform we 
plan to use our fiscal year 2012 Race to the Top funds to do 
two things: to have both a district level competition, and also 
another round of Early Learning Challenge State grants. We are 
still working out the details and we look forward to updating 
this committee in the coming weeks with more information.
    At their core, Race to the Top and other key reform 
programs are about spurring reform by rewarding success and 
giving flexible funding to implement good ideas developed by 
the local educators who know their communities best. Especially 
in tight budget times, we have to make more effective use of 
federal funds. Formula funds alone won't drive the kind of 
transformational reform our education system needs. We need to 
combine a strong foundation of formula funding with targeted 
use of competitive grant programs.
    While we have strong and foundational formula programs to 
help low-income students, like Title I, we are better 
leveraging those dollars with reform programs like our Promise 
Neighborhoods initiative. And thanks to Congress, last year we 
were able to double funding for Promise Neighborhoods.
    The growing income inequality in America over the past 30 
years has led to historically high child poverty rates. Close 
to one-fifth of America's children live in poverty, and in some 
States poor children represent close to 50 percent of all 
public school students. That is both morally unacceptable and 
economically unsustainable.
    Education is the great equalizer. If we ever hope to lift 
our children out of poverty we must give them access to 
effective schools and strong systems of family and community 
support. We think Promise Neighborhoods can help break cycles 
of poverty and I really appreciate your collective support of 
this initiative.
    Moving on to ESEA, the administration remains committed to 
working with you on producing a comprehensive, bipartisan 
reform bill for the president to sign into law. But while you 
continue your important work towards that goal, State and local 
districts are bucking under the law's aged goals and top-down 
mandates. Despite our shared sentiment for reform and our 
longstanding work together to fix No Child Left Behind the law, 
unfortunately, remains in place 5 years after it was due for 
reauthorization.
    As all of us know, our children only get one shot at a 
world-class education and they cannot wait any longer for 
reform. And that is why we have offered States regulatory 
relief from NCLB in exchange for reforms that drive student 
achievement. Working closely with Independent, Democratic, and 
Republican governors we have helped unleash energy and 
innovation at the local level as Congress continues to work to 
rewrite the law by giving States, districts, and schools the 
flexibility they need to raise standards, to better support 
teachers and principals, and to improve our nation's lowest 
performing schools.
    Mr. Chairman, in your home State Governor Mark Dayton said 
this waiver will allow Minnesota administrators, teachers, and 
parents to work together in building a new system of 
accountability for schools which will lead to better education 
for our children and a better future for Minnesota. In 
Tennessee, home to two members of this committee, Governor Bill 
Haslam has said that the flexibility offered by our 
administration from ESEA will help improve education for all of 
Tennessee's students, and Tennessee's goal has been to become 
the fastest-improving State in the nation. And in Indiana State 
education officials have said that the administration is 
providing the regulatory flexibility Indiana needs to drive and 
improve student achievement.
    The chorus of support for relief from the law is strong and 
widespread. So far, 37 States and D.C. have applied for 
flexibility and many more States are looking forward to that 
opportunity. Eleven States have already been given flexibility 
and we will continue working with all States to give them the 
freedom to implement locally developed reforms that will 
protect children and improve student achievement.
    We also recognize that Congress faces some difficult 
choices with respect to the Pell Grant program, but we 
appreciate that the maximum Pell Grant award was maintained at 
its current level, which will help close to 10 million students 
across the country pursue higher education in the 2012-2013 
school year.
    Before I give you an overview of our budget request for 
next year I would like to take a moment to address an issue 
that could threaten our ability to prepare American students to 
compete in the global economy and undermine our nation 
security. Today our children are competing for jobs with 
children in China, and India, and Japan, and South Korea, and 
Singapore. We need to give our children every chance at 
success.
    As all of you know, last week Congressman Ryan, whose 
leadership I respect, unveiled an alternative budget plan which 
you may soon be considering--may soon be considering here in 
the House. However well intentioned, the Ryan plan draws on the 
same flawed theory that led to the worst recession in our 
lifetime and contributed to the erosion of middle class 
security over the last decade, and it does so by, among other 
things, balancing the budget on the backs of America's 
children.
    If the Ryan budget is voted into law we could see 
disastrous consequences for America's children over the next 
couple years. By 2014, Title I, which helps fund educational 
programs and resources for millions of low-income, minority, 
rural, and tribal children, could see a $2.7 billion reduction 
that might deny resources to over 9,000 schools serving more 
than 3.8 million students. Less educational opportunity is not 
what our children or our country needs.
    Money needed to help pay teachers, tutors, and funds for 
critical afterschool programs might no longer be there and as 
many as 38,000 teachers and aides could lose their jobs. 
Funding to help educate students with disabilities, children 
with special needs who need the best, could be cut by over $2.2 
billion, which would translate to the loss of over 30,000 
special education teachers, aides, and other staff.
    We know the importance of early childhood education, and 
yet 200,000 children could lose access to Head Start. Work 
Study funding could be cut by $185 million, potentially denying 
a meaningful path to make college more affordable for up to 
129,000 low-income students. And TRiO, which helps prepare low-
income and minority students to succeed in college, could be 
cut by $159 million, leaving 148,000 students in the lurch.
    The Ryan budget could also cut $3 billion from the Pell 
Grant program, completely eliminating aid for 400,000 low-
income college students and reducing assistance for close to 9 
million more. And that is just the tip of the iceberg.
    In short, passage of the Ryan budget would propel 
educational success of this country backwards for years to 
come, and that is simply a risk we cannot afford to take.
    Likewise, we cannot--we cannot afford the disastrous 
across-the-board cuts known as budget sequestration to take 
effect next year. We must come together as a country to make 
sound bipartisan investments in education, not to perpetuate 
the status quo but to drive reform and to create new 
educational opportunity.
    It is simply unfathomable to me that we would ask a 
generation of students to pay the price for adult political 
dysfunction, and I am asking for your collective help to make 
sure that doesn't happen. As I travel the country I hear a deep 
appreciation for the federal commitment to children and 
learning. Americans know that even--and maybe especially--in 
challenging fiscal times like this we must educate our way to a 
better economy. They know that even as States face greater 
financial pressure than at any time in recent history we cannot 
put our children at risk, and so our budget reflects these 
aspirations and these commitments.
    That is why we are requesting $69.8 billion in 
discretionary funding for 2013, an increase of $1.7 billion or 
about 2.5 percent from 2012. Our proposal seeks to direct 
funding to four key areas: supporting State and local reform in 
P-12 education, elevating the teaching profession, 
strengthening the connections between schools and work, and 
making college more affordable, which will see the largest 
share of our requested increase.
    Fifty years ago college was maybe a luxury. Back then you 
could still graduate from high school and get a good-paying job 
that would guarantee you a place in the middle class.
    Unfortunately, those days are long gone. A postsecondary 
education is the ticket to economic success in America. We know 
that the jobs of the future will all require some kind of 
education or training after graduation from high school.
    And, while it has never been more important to have a 
degree, or a certificate, or an industry-recognized credential, 
unfortunately it has also never been more expensive. Since 1995 
college costs across the country have risen almost five times 
faster than median household income.
    As a result, students and their families are taking on more 
and more debt. Borrowing to pay for college used to be the 
exception; now it is the rule.
    What is troubling is that not only are more students 
borrowing but they are also borrowing more, and we all have a 
role to play in making college affordable and keeping that 
middle class dream alive. It has to be a shared responsibility.
    We need States to continue to invest in postsecondary 
education and training. We need institutions of higher 
education to do a better job of delivering high quality 
instruction at an affordable price to students of all 
backgrounds. And we need to arm parents and students with the 
consumer information they need to make smart educational 
choices.
    President Obama believes that the federal government has an 
important role to play as well, and that is why we are 
providing billions of dollars a year in aid to needy students 
through Pell Grants. We are also helping students better manage 
their debt after graduation with programs like incomebased 
repayment and public service loan forgiveness.
    While all these efforts are helping struggling students 
gain access to and afford college we cannot and should not do 
this by ourselves, and that is why the administration is 
proposing several new reforms to contain rising college costs. 
We are seeking to double the number of Work Study jobs for 
young people within 5 years. We want to make the American 
Opportunity Tax Credit permanent. And we want to provide new 
incentives for States and institutions to keep college costs 
from escalating continually.
    The president's budget would also continue support for key 
programs supporting college access and completion for minority 
and disadvantaged students--programs like TRiO and GEAR UP and 
Impact Aid. And President Obama's education budget will prevent 
student loan interest rates from doubling this summer.
    As all of you here know, unless some action is taken, 
Congress has mandated that subsidized student loan interest 
rates will double starting in July of this year. With so many 
students already struggling to make ends meet and afford the 
skyrocketing cost of college now is not the time to heap more 
costs on top of them.
    If Congress doesn't act soon over 200,000 students in 
Minnesota will see their student loan interest rates double, as 
will half a million students in California and over 7.4 million 
students nationwide. We must act soon and both the president 
and I stand ready to work with all of you to help solve this 
problem for America's students.
    In addition to making college more affordable for millions 
of Americans our budget proposal will continue foundational 
investments in critical formula programs, like Title I and 
IDEA, as well as successful incentive-based reform programs at 
the P-12 level, like Race to the Top, and the Promise 
Neighborhoods initiative, and i3. Our proposal would also 
dedicate significant resources to transforming the teaching 
profession through a new program called RESPECT. That acronym 
stands for recognizing education success, professional 
excellence, and collaborative teaching.
    Our goal is to work with educators in rebuilding the 
profession to elevate the teacher's voice in shaping federal, 
and State, and local education policy. Our larger goal is to 
make teaching among America's most important and respected 
professions. We know that is a lofty goal but we are serious 
about getting there.
    If we are going to educate our way to a better economy we 
have to address the growing skills gap in America. There are at 
least 2 million unfilled jobs today in tough economic times 
because employers can't find workers with the right skills, 
preparation, and training. And that is why the president's 
budget includes key investments to help build partnerships 
between community colleges and local businesses so that they 
are training workers for the jobs employers need to fill now 
and in the future.
    And finally, we are proposing increased investments in 
career academies, which have been shown to reduce high school 
dropout rates and prepare students for careers that lead to 
higher earning potential.
    Our job is to support change with transparency with the 
right incentives, and we believe our budget proposal does just 
that.
    The president believes that this is a make or break moment 
for the middle class and those who are working to reach it. 
What is at stake here is the very survival of the basic 
American promise, that if you work hard you can do well enough 
to raise a family, own your own home, and put away enough for 
retirement.
    The defining issue of our time is how to keep that basic 
promise alive. No challenge is more urgent and no debate is 
more important.
    We can either settle for a country where a shrinking number 
of people do really well while more Americans barely get by, or 
together we can build a nation where everyone gets a fair shot, 
everyone does their fair share, and everyone plays by the same 
rules. At stake right now are not Democratic or Republican 
values but American values, and for the sake of our future we 
have to reclaim them. And at the heart of that effort is the 
commitment to support education.
    Thank you so much for the opportunity. I look forward to 
your questions.
    [The statement of Secretary Duncan follows:]

           Prepared Statement of Hon. Arne Duncan, Secretary,
                      U.S. Department of Education

    Mr. Chairman, Ranking Member Miller, and Members of the Committee: 
Thank you for this opportunity to talk about President Obama's fiscal 
year 2013 budget for the Department of Education. While the President's 
overall 2013 request reflects his strong commitment to achieving long-
term deficit reduction, his request for education recognizes that we 
can't cut back on investments like education if we want to ensure 
America's continued economic prosperity. Indeed, as he outlined in his 
2012 State of the Union address, President Obama believes that 
education is a cornerstone of creating an American economy built to 
last.

President Obama's 2013 budget request
    The overall discretionary request for the Department of Education 
is $69.8 billion, an increase of $1.7 billion, or 2.5 percent, over the 
2012 level. Within our budget, which also includes requests for 
mandatory funding, we have four key priorities: (1) continuing to 
provide incentives for State and local K-12 reform, (2) improving 
affordability and quality in postsecondary education, (3) elevating the 
teaching profession, and (4) strengthening the connections between 
school and work and better aligning education and job training programs 
with workforce demands.

Providing incentives for reform
    First, our request includes $850 million for Race to the Top, an 
increase of $301 million over the 2012 level, for additional 
competitive awards that would support groundbreaking education reforms 
in five core reform areas: implementing rigorous standards and 
assessments; using data to improve instruction; recruiting, preparing, 
and retaining effective teachers and principals; turning around our 
lowest-performing schools; and improving State early learning systems. 
In 2013, our budget specifically proposes to provide resources for the 
Race to the Top: Early Learning Challenge.
    The 2013 request also would encourage reform and innovation through 
a $150 million request for the Investing in Innovation (i3) program to 
develop, evaluate, and scale up promising and effective models and 
interventions in the areas of improving early learning outcomes; 
increasing achievement in science, technology, engineering, and 
mathematics (STEM); and increasing productivity to achieve better 
student outcomes more cost-effectively. The i3 request also would 
support a new Advanced Research Projects Agency: Education, or ARPA-ED, 
which would pursue breakthrough developments in educational technology 
and learning systems, support systems for educators, and educational 
tools.
    We also are seeking $100 million in 2013 for Promise Neighborhoods, 
an increase of $40 million over the 2012 level. The request would 
expand support for projects that provide a continuum of family and 
community services and ambitious education reforms designed to combat 
the effects of poverty and improve education and life outcomes, from 
birth through college to career, for children and youth within a 
distressed geographic area.

Affordability and quality in postsecondary education
    A second priority in our 2013 request is improving affordability 
and quality in higher education. As President Obama said in his State 
of the Union address, ``Higher education can't be a luxury--it is an 
economic imperative that every family in America should be able to 
afford.'' Unfortunately, the cost of college is rising to levels that 
are increasingly unaffordable for too many American families. Our work 
with you over the past 3 years to secure historic Federal investments 
in student financial assistance and tax credits have helped students 
and families deal with rising college costs, but Federal student aid 
cannot keep pace with these rising costs indefinitely. Instead, we need 
larger reforms that address the root causes of rising college costs, 
while also creating incentives to provide greater quality and value to 
students and preserve access for low-income individuals.
    The President's 2013 request includes three proposals that would 
begin to support such reforms. First, we are asking for $1 billion to 
fund the first year of Race to the Top: College Affordability and 
Completion, a new competition based on the successful Race to the Top 
K-12 model, to drive systemic State reforms that increase 
affordability, quality, and productivity while preserving access. Funds 
would be awarded to States with a strong commitment to, and a high-
quality plan for, increasing college affordability and quality, which 
could be demonstrated in such ways as maintaining a consistent State 
financial commitment to higher education, improving alignment between 
K-12 and postsecondary education and across colleges, operating 
institutions that stabilize or constrain the growth in what students 
pay for college, publicizing institutional value in terms of the return 
on investment and other outcomes, and making use of data to drive 
policy. Funds would be used by States and public institutions to boost 
quality, innovation, and productivity and provide greater value to 
students through improved undergraduate experiences, new paths to 
credit attainment and degrees, and increased capacity, among other 
purposes.
    Second, we would expand and reform the Campus-Based Aid programs--
Supplemental Educational Opportunity Grants (SEOG), Federal Work-Study, 
and Perkins Loans--to provide $10 billion in student financial aid for 
use at those colleges that provide the best value to students by 
enrolling and graduating students from low-income families, restraining 
net prices, and demonstrating good value. Most of this expansion would 
come through reform of the Perkins Loan program, which would be 
operated similarly to the current Direct Loans program. We also are 
asking for a $150 million increase for Federal Work-Study, for a total 
of more than $1.1 billion, to support reforms that would encourage 
postsecondary institutions to offer students more meaningful work-study 
opportunities that will help to prepare them for work and life after 
graduation. This increase would start moving us toward our goal of 
doubling work-study opportunities for students within 5 years.
    Third, our request includes $55.5 million for a ``First in the 
World'' fund that would help postsecondary institutions, including 
private institutions, and nonprofit organizations to develop, evaluate, 
or scale up innovative and effective strategies for improving college 
completion outcomes while lowering costs and increasing the quality and 
capacity of higher education. Awards could be used to support such 
activities as using technology to redesign coursework, improving early 
college preparation to mitigate the need for remediation, and 
developing and implementing competency-based instruction and 
assessment, among other activities. We also would reserve up to $20 
million in First in the World funding to support innovative activities 
at minority-serving institutions.
    These initiatives would help protect the significant taxpayer 
investment in Federal postsecondary student aid programs by creating 
incentives for States and public and private postsecondary institutions 
to provide good value to students at an affordable price and move us 
closer to meeting President Obama's 2020 goal for college completion.
    Our 2013 request also would maintain our investment in Federal 
student aid, including full funding of the $5,635 Pell Grant maximum 
award in the 2013-2014 award year and the elimination of projected Pell 
Grant shortfalls for the 2014-2015 award year. The 2013 request would 
provide $22.8 billion in discretionary budget authority for Pell 
Grants, the same level as 2012, along with mandatory funding provided 
in prior legislation. The total amount available would exceed program 
costs in the 2013-2014 award year by $1.5 billion, representing the 
first step in addressing the funding cliff in 2014. Further, we would 
make a down payment toward addressing the long-term Pell gap through 
three reforms in the student loan programs: (1) expanding and reforming 
the Perkins Loan program, (2) limiting the in-school interest subsidy 
for subsidized Stafford Loans to 150 percent of the normal program 
length, and (3) reducing excessive payments to guaranty agencies that 
rehabilitate student loans. The mandatory budget authority and outlay 
savings from these proposals would total $14 billion over 10 years.
    In addition to investing in Pell Grants, our request proposes to 
freeze the subsidized Stafford Loan interest rate, which is set to 
double on July 1, at the current rate of 3.4 percent. With the economy 
still in recovery, the Administration believes that it would be 
inappropriate to raise rates and burden students with greater debt at 
this time. The President's Budget also proposes to make the American 
Opportunity Tax Credit permanent, so that 9 million households can 
continue receiving up to $10,000 in tax credits for college over 4 
years.
    Finally, the President's budget also would continue support for key 
existing programs supporting college access and completion, 
particularly for minority and disadvantaged students. The request 
includes almost $840 million for the Federal TRIO programs and $302 
million for the GEAR UP program, which together help one and a half 
million middle and high school students prepare for, enroll in, and 
complete college. The 2013 budget also would provide nearly $600 
million in combined discretionary and mandatory funding for the Aid for 
Institutional Development programs, which support institutions that 
enroll a large proportion of minority and disadvantaged students, as 
well as $221 million in combined discretionary and mandatory funding 
for the Aid for Hispanic-Serving Institutions programs.

Elevating the teaching profession
    The third major priority in the President's 2013 request is to 
elevate the teaching profession so that all students have access to 
effective teachers. We have been working to help States and school 
districts implement performance-based compensation and strengthen 
teacher evaluation systems. While we remain committed to furthering 
these important reforms, we recognize that, on their own, they are too 
narrowly focused to affect the changes we need in the teaching 
profession to out-educate and out-compete the rest of the world.
    We are proposing to jumpstart a transformation of the teaching 
profession through a one-time $5 billion mandatory initiative that 
would help States and districts pursue bold reforms at every stage of 
the profession, including attracting top-tier talent into the 
profession and preparing them for success, creating career ladders with 
competitive compensation, evaluating and supporting the development of 
teachers and principals, and getting the best educators to the students 
who need them most.
    In addition, we are requesting a new 25-percent set-aside of 
Effective Teachers and Leaders State Grant funds under Title II of the 
Elementary and Secondary Education Act (ESEA). This increased set-
aside--approximately $617 million in 2013--would fund efforts to 
recruit, prepare, and support effective teachers and school leaders; 
recruit and prepare effective STEM teachers; and enhance the teaching 
and school leadership professions. Our request also includes a $100 
million increase for the proposed Teacher and Leader Innovation Fund, 
for a 2013 total of $400 million to support bold approaches to 
improving the effectiveness of the education workforce in high-need 
schools and districts.
    Finally, our budget includes $190 million in mandatory funding in 
FY 2013 ($990 million over five years) for a new Presidential Teaching 
Fellows program that would provide formula grants to States that meet 
certain conditions to award scholarships of up to $10,000 to talented 
individuals attending the most effective programs in the State. These 
individuals would be trained in a high-need subject and would commit to 
teach for at least 3 years in a high-need school. To be eligible for 
funds, States would measure the effectiveness of their teacher 
preparation programs based on student achievement data of their 
graduates, among other measures; hold teacher preparation programs 
accountable for results; and upgrade licensure and certification 
standards.

Aligning job training and education with workforce demands
    In addition to funding to reform traditional postsecondary 
education and reshape the teaching profession, the 2013 request for 
education includes key discretionary and mandatory investments aimed at 
improving the connections between school and work and strengthening the 
alignment of job training programs with workforce demands.
    For example, the President is seeking $8 billion in mandatory funds 
over 3 years for a Community College to Career Fund, jointly 
administered by the Departments of Education and Labor, which would 
support State and community college partnerships with businesses to 
build the education and skills of American workers. Increased 
investment in community colleges would help ensure our country has 
among the best-skilled workforces in the world. I was pleased to see 
this concept incorporated into a bill recently introduced by 
Representatives Miller, Tierney, and Hinojosa. An additional $1 billion 
over 3 years would expand Career Academies and increase by 50 percent 
the number of students in these programs. For students at risk of 
dropping out, Career Academies have been shown to reduce dropout rates, 
improve attendance, and prepare students for careers that lead to high 
earnings.
    And our discretionary request includes $1.1 billion to support the 
reauthorization and reform of the Career and Technical Education (CTE) 
program, which is currently set to expire at the end of fiscal year 
2012. The Administration's reauthorization proposal would redesign and 
transform CTE to better focus on outcomes and career pathways to ensure 
that what students learn in school is more closely aligned with the 
demands of the 21st century economy, while creating stronger linkages 
between secondary and postsecondary education. The proposal would also 
promote innovation and reform in CTE.

Support for at-risk students and adults
    Finally, the President's 2013 budget for education would maintain 
our longstanding commitment to formula grant programs for students most 
at risk of educational failure. For example, the request includes $14.5 
billion for the reauthorized Title I College- and Career-Ready Students 
program (currently Title I Grants to Local Educational Agencies), as 
well as nearly $534 million to support new awards under a reauthorized 
School Turnaround Grants program (currently School Improvement Grants), 
which would help school districts undertake fundamental reforms in 
their lowest-achieving schools. We also are asking for $732 million for 
a reauthorized English Learner Education program, which would help 
States and school districts ensure that English Learners meet the same 
college- and career-ready standards as other students.
    In Special Education, the $11.6 billion request for Individuals 
with Disabilities Education Act Grants to States would help States and 
school districts pay the additional costs of educating students with 
disabilities, while a $20 million increase for the Grants for Infants 
and Families program would complement efforts to improve State early 
learning systems through the Race to the Top--Early Learning Challenge 
program.
    The 2013 request would also provide significant resources to help 
adults pursue educational and employment opportunities, including $595 
million for Adult Basic and Literacy Education State Grants to help 
adults without a high school diploma or equivalent to obtain the 
knowledge and skills necessary for postsecondary education, employment, 
and self-sufficiency, and a total of $3.2 billion in mandatory and 
discretionary funds for Vocational Rehabilitation (VR) State Grants and 
complementary programs to help States and tribal governments increase 
the participation of individuals with disabilities in the workforce.
Elementary and Secondary Education Act reauthorization
    In addition to our budget request, I want to briefly address the 
ongoing effort to reauthorize the Elementary and Secondary Education 
Act.
    I spent many years in Chicago, implementing NCLB, and have traveled 
the country--including to many of your States and districts--since I 
have been Secretary, listening to parents, educators, students, and 
other State and local leaders. And, wherever I go, I hear that NCLB, 
while well-intentioned, has become an impediment to implementing 
reforms that benefit kids--that it sanctions schools, rather than 
encouraging and rewarding them, mislabels schools, and imposes ``one-
size-fits-all'' mandates, determined in Washington, that don't drive 
reforms that benefit students.
    NCLB was right to shine a bright light on achievement gaps and set 
a clear expectation that all students must learn to the same standards. 
Those were landmark changes, which brought a long-overdue focus on the 
needs of English Learners, students with disabilities, and other at-
risk students. But that is not enough. If we are going to help children 
and families to improve their lives and at the same time ensure our 
country's continued economic competitiveness, we need to do everything 
we can to meet the President's goal that, by 2020, the United States 
again leads the world in the percentage of adults who are college 
graduates, which includes raising the bar and making sure that every 
student graduates from high school ready for college and a career--and 
NCLB isn't going to get us there.
    We need to move away from a punitive law that is concerned almost 
exclusively about a single test on a single day, and toward supporting 
and rewarding schools' and teachers' efforts to help every student 
improve and reach their potential. And, while we must continue to 
demand strong accountability--in other words, results--for all 
students, and ensure dramatic interventions in the lowest-performing 
schools, we need to give States and districts much more flexibility in 
how they achieve those results.
    That is why, two years ago, President Obama released our Blueprint 
for Reform, and has called for a bipartisan reauthorization of ESEA. 
Since then, the President and I have met multiple times with the 
bipartisan leadership of this Committee and the Senate Health, 
Education, Labor and Pensions Committee to work toward that goal. 
Because, in the long run, what is best for our country's children is a 
strong, bipartisan reauthorization of ESEA that addresses all of the 
problems with the current law. And, as long as both the House and 
Senate are moving in that direction, we will support you.
    However, last September, in the absence of reauthorization, and 
recognizing that NCLB had become an impediment to reform, President 
Obama announced that we would invite States to request flexibility 
regarding certain NCLB requirements so that they can move forward with 
State- and locally driven reforms that will improve student achievement 
for all students, regardless of their income or race, or whether they 
have a disability or are English Learners, and increase the quality of 
instruction.
    In early February, we approved the first 11 States for flexibility 
regarding NCLB's mandates. We approved these States because they've 
made commitments, each in ways that best fit their State and local 
situations, to moving forward and adopting innovative approaches to 
raising expectations for all students, incorporating student growth 
into accountability systems, and measuring teacher and principal 
effectiveness based on multiple measures, including student growth, to 
improve student achievement and close achievement gaps. These reforms 
can make a great difference in the lives of millions of children and 
their families, and we look forward to supporting States and districts 
in these efforts.
    An additional 26 States and the District of Columbia submitted 
their requests for flexibility on February 28, and we'll be working 
with all of them to reach approval over the coming months, with the 
same goals.

Potential impact of the House Budget Committee FY 2013 budget 
        resolution and sequester
    Before I conclude my testimony today, I'd like to take a moment to 
address two issues that could threaten our ability to prepare American 
students to compete in the global economy and undermine our national 
security.
            House Budget Committee FY 2013 Budget Resolution
    As you know, last week Congressman Ryan unveiled his FY 2013 Budget 
Resolution, which the Budget Committee passed, and which the full House 
is expected to consider this week.
    However well-intentioned, the Ryan plan is flawed and will create a 
significant burden on our ability to compete in a global economy by, 
among other things, balancing the budget on the backs of America's 
students.
    If the Republican Budget Resolution is enacted, we could see 
disastrous consequences for America's children over the next couple of 
years.
    By 2014, Title I, which helps fund educational programs and 
resources for millions of low-income, minority, rural, and tribal 
children, could see a $2.7 billion reduction that could deny resources 
to over 9,000 schools serving more than 3.8 million students.
    Money needed to help pay teachers, tutors, and funds for critical 
after-school programs could no longer be there and as many as 38,000 
teachers and aides could lose their jobs.
    Funding to help educate students with disabilities could be cut by 
over $2.2 billion, which would translate to the loss of nearly 30,000 
special education teachers, aides and other staff.
            200,000 children could lose access to Head Start
    The Republican Budget Resolution would also have a devastating 
impact on higher education:
    It would cut almost $3 billion from Pell aid to students in 2013, 
eliminating almost 400,000 recipients, and reducing the awards of 9.3 
million others. It would also hurt borrowers and students at a time 
when average student loan debt for a graduating senior is already more 
than $25,000.
    Work-study funding could be cut by $185 million potentially denying 
a meaningful opportunity to make college more affordable for up to 
129,000 low income students.
    And TRIO, which helps prepare low-income and minority students to 
succeed in college, could be cut by $159 million, leaving 148,000 
students in the lurch.
    And that is just the tip of the iceberg. In short, passage of the 
Ryan budget would propel the educational success of this country 
backwards for years to come, and that is a risk we cannot afford to 
take.
            Sequester
    I am also concerned about the potential impact of a 2013 sequester 
on Federal education funding. While the Department has yet to complete 
a detailed analysis of how a sequester would be implemented, we believe 
the impact would be both significant and very negative. In a word, a 
large sequester could be devastating. It would jeopardize our Nation's 
ability to develop and support an educated, skilled workforce that can 
compete in the global economy. Along with other deep cuts in defense 
and non-defense spending, this potential harm to our economic 
competitiveness is why the threat of a large, indiscriminate sequester 
is a powerful incentive to spur action to reduce the deficit. By 
design, the sequester is bad policy, bringing about deep cuts in 
defense and non-defense spending and threatening continued economic 
growth and prosperity.
    Although the Administration is continuing to analyze the potential 
impact of the sequester, the Congressional Budget Office has said that 
in 2013 it would result in a 7.8 percent cut in non-security 
discretionary accounts that are not exempt from the sequester. It would 
be impossible for us to manage cuts of that magnitude and still achieve 
our fundamental mission to prepare our students from the earliest ages 
for college and careers.
    For example, a 7.8 percent reduction in funding for large State 
formula grant programs that serve over 21 million students in high 
poverty schools and 6.6 million students with special needs could force 
States, school districts, and schools to slash teacher salaries, lay 
off teachers, or reduce services to these needy children. More 
specifically, the resulting cut of more than $1.1 billion to Title I 
could mean denying funding to nearly 4,000 schools serving more than 
1.6 million disadvantaged students, and more than 16,000 teachers and 
aides could lose their jobs.
    Similarly, for the critical Part B Grants to States program under 
the Individuals with Disabilities Education Act, the estimated 7.8 
percent reduction in funding required by a sequester would mean the 
loss of over $900 million, which could translate to the loss of 10,000 
special education teachers, aides, and other staff providing essential 
instruction and other support to children with disabilities. Because of 
the indiscriminate nature of a sequester, the story would be the same 
across all Department activities: we would no longer be able to provide 
essential Federal support that helps pay for the costs of educating 
students with disabilities, improving achievement for students from 
low-income families, turning around failing schools, advancing 
education reforms designed to help our kids compete in the global 
economy, supporting the students of military families, providing work-
study jobs for postsecondary students, or helping parents pay for 
college.
    It's also important to note that even without the sequester, non-
security discretionary spending has already been cut in nominal terms 
for 2 straight years. Under the Budget Control Act targets, non-
security discretionary spending is on a path to reach its lowest level 
as a share of GDP since the Eisenhower Administration. So the impact of 
the significant cuts in Federal support for education that I have 
described would be magnified, coming on top of already lower levels of 
Federal education funding as well as reduced State and local education 
spending resulting from the recent financial crisis and economic 
recession. At a time when we are just starting to see strong signs of 
renewed economic growth, as well as the positive impact of historic 
education reforms that will contribute to future growth and prosperity, 
it just makes no sense at all to undermine this progress through a 
sequester of Federal discretionary spending.
    The President has been clear that Congress needs to avoid a 
sequester by passing a balanced deficit reduction measure including 
targeted savings that total at least as much as the $1.2 trillion that 
was required by the Budget Control Act. The President's 2013 request 
reflects such a balanced proposal, and I believe Congress should enact 
it and cancel the sequester. There would still be deficit reduction, 
but not the mindless and harmful across-the-board cuts that could be 
required by a large sequester. We all agree on the need for significant 
deficit reduction, and we want to work with Congress on a balanced 
approach toward this goal that combines fiscal responsibility with 
investments in education that will help children and our economy.

Conclusion
    In conclusion, the 2013 budget for education reflects the 
President's determination to make the investments necessary to secure 
America's future prosperity, even as he works with Congress on long-
term deficit reduction and fiscal sustainability goals. Our request 
would sustain and build on current reforms in K-12 education, help 
launch a nationwide conversation on the need for greater affordability 
and quality in our postsecondary education system, put the Pell Grant 
program on a more secure financial footing, and more closely link 
education with workforce demands and employment outcomes. At the same 
time, we would maintain strong support for longtime formula grant 
programs that provide significant and essential assistance in helping 
States, school districts, and schools to meet the needs of all 
students, including students from low-income families, students with 
disabilities, and English learners. I look forward to working with the 
Committee to secure support for the President's 2013 budget and help 
America educate its way to, as the President put it, ``an economy 
that's built to last.''
    Thank you. I would be happy to answer any questions you may have.
                                 ______
                                 
    Chairman Kline. Thank you, Mr. Secretary.
    I was remiss in not pointing out that pursuant to committee 
rule 7c all committee 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 record, 
and other extraneous material referenced during the hearing to 
be submitted in the official hearing record.
    Mr. Secretary, there will be a lot of debate here about 
competing budgets today, and tomorrow, and I appreciated your 
input on the--what will be the House budget. And it is a--an 
important question as to the impact that competing budgets are 
going to have on our children and grandchildren, and I would 
argue and will argue that the trillion dollars of additional 
debt that the president's budget places on our children and 
students is probably not helpful for their future.
    But I am interested particularly in your budget--
president's budget, the department's budget. You and I have 
talked about this a number of times and I mentioned it in my 
opening statement: I am really disappointed in the lack of any 
increase in IDEA funding in the president's budget.
    You found billions--billions of dollars, which we don't 
really have, but you found billions of dollars to expand other 
programs, create new programs, school construction, Race to the 
Top, all manner of things, and not a dollar for IDEA. And so in 
real terms we are decreasing that, and yet every school 
leader--every superintendent, every principal, parent, teacher 
that I talk to, that we have had here--says the thing that they 
want most is for the Congress and for the federal government to 
step up and get at least close to the 40 percent of the 
increased cost that was agreed to years ago, and we have never 
come close to half of that.
    How do you explain to all of these parents and leaders that 
your new programs and your ideas are more important than what 
they demand the most and first?
    Secretary Duncan. No, it is a great question. Your 
commitment there has been fantastic and steadfast ever since 
you and I met, and I really appreciate that.
    I think we are trying to look at this in a more holistic 
manner, so when you see States raising standards which benefit 
children with disabilities significantly that is a huge win for 
that community, and folks have been very supportive of that. 
When you increase access to college through Pell Grants--so 
many students with disabilities who historically have been 
denied those opportunities now have the chance to do that.
    We are investing significantly in turning around 
chronically underperforming schools, many of which have a 
disproportionate number of students with disabilities in them. 
And so I think if you look at that collective investment, 
trying to put more money into children with special needs when 
they are young before they enter school--and so whether you 
look at early childhood, whether you look at K-12 reform, 
whether you look at greater access to higher education, 
students with special needs I think have greater opportunities 
going forward than they have had in the past.
    Chairman Kline. All right. Well, I appreciate the 
explanation but I just fundamentally disagree. These schools 
need this money now. They can use it now; they know how to use 
it now. And it needs to be something they can count on--not 
spikes, not guesses, not ``we hope that we are going to improve 
the over quality of the schools by a new program.''
    And it just seems to me that the president is missing an 
opportunity by not putting that in his budget. And I am sure we 
will have this debate here and it is not uniquely a Democrat or 
Republican problem here, but we--we need to address it in 
Congress and I would really have appreciated the president's 
help in setting the priority in his budget.
    Let me talk about your conditional waiver package. As you 
know, I think this is an overreach on your part. I don't 
believe that the language of the law allows the secretary to 
provide conditional waivers. But let me see if I can get into 
how this might work.
    As I understand it, the State plans are going to be 
reviewed by external and internal--external and internal 
reviewers, meaning that your staff is involved in the review 
process. Is that correct?
    Secretary Duncan. Yes, sir.
    Chairman Kline. Your staff is. What does that involvement 
entail? How independent is this peer review process if your 
staff is in the decision-making process in granting these 
conditional waivers? Seems like an awful lot of control in your 
hands.
    Secretary Duncan. Yes. So, it has been a very transparent 
process. It begins with a thorough vetting by peer reviewers 
who, again, have--are disinterested--don't have any opinion 
there. Ultimately, I have to approve or not approve these 
waivers.
    We are seeing extraordinary applications from around the 
country--again, Democratic-led States, Independent States, 
Republican-led States. I have to tell you, Chairman--Mr. 
Chairman, that as I thought about doing this I talked to 
probably 44 or 45 governors from around the country and, again, 
all across the political spectrum, and every single one said 
this is the right thing to do and thank goodness someone in 
Washington is paying attention to what is going on.
    So we have had 11 States apply. We have approved all 11. We 
think there is some fantastic innovation there and creativity 
and this--as I have said repeatedly, this has not been my first 
choice and continue to want to work very, very hard with all of 
you to reauthorize No Child Left Behind and fix it, and to do 
it in a bipartisan way. That hasn't happened yet and so we felt 
compelled to do this.
    The one upside, I will say, of this is once the Congress 
moves forward with a bipartisan process there are fantastic 
ideas that are coming from the States that I think should 
really inform your collective conversation. States are doing 
some really, really creative things. And so I just urge all the 
leaders here to look at what these 11 States have put on paper. 
We have 26, 27 other States who have already applied and I 
think those ideas could be very, very helpful once we move 
forward together with fixing No Child Left Behind.
    Chairman Kline. All right. I see my time is expired.
    Mr. Miller?
    Mr. Miller. Thank you.
    Thank you very much, Mr. Secretary, for your testimony, and 
thank you again for the president's budget. Before we get into 
a debate about whether or not we are going to increase funding 
for IDEA we can see if we can get bipartisan support to erase 
the $2 billion cut that is in that category in the Republican 
budget. So we could start there and see if we can get to the 
next threshold.
    Chairman Kline. Would the gentleman yield?
    Mr. Miller. Yes.
    Chairman Kline. We have the president's budget right in 
front of us. We know what that did. We are just speculating on 
what the number might be in the Republican budget.
    Mr. Miller. I don't think it is much speculation.
    Chairman Kline. Oh, I think there is some speculation 
there. I yield back.
    Mr. Miller. I doubt if it is speculation.
    [Laughter.]
    So, the point is here that, as you point out, in the waiver 
authority, which you clearly have under the law that CRS and 
others have said is very clear, this is a voluntary process, 
and what I find fascinating is this cross section of States--
both for Race to the Top and for the waivers--have said they 
don't want to be held back by us. We know we have learned a 
great deal in the last 10 years from the disclosure of how 
students are doing in the schools and we see States stepping 
forward.
    And that is very exciting when you see governors making the 
commitment to internationally benchmarked standards and 
internationally benchmarked assessments, and assessments that 
will go much deeper into allowing students to not only answer 
the right question but then to demonstrate the knowledge base 
from which they made that conclusion. And that is all possible 
now with new technology, and that is one of the commitments 
that is made in the new data systems that the governors are 
asking for the waivers and that you have empowered them to do.
    But I found a very interesting story yesterday when I 
talked to some of the chief State school officers and I was 
asked point blank in the Q&A period, ``What do I tell my 
districts about the budget?'' They are looking forward to 
whether or not we are going to get the education budget, 
whether we are going to--Congress is going to get an overall 
budget, whether or not we are going to go to sequestration in 
December, whether or not that sequestration is going to be, as 
we promised the American people when we voted for it, half out 
of defense and half out of domestic. We see in the Republican 
budget that they have decided that it is going to all come out 
of the domestic side of the agenda.
    So these governors who are racing forward--the chief State 
schools officers who are racing forward to embrace innovation, 
to embrace these new opportunities, to empower their teachers, 
to improve their teachers, to evaluate the performance of their 
teachers now are saying this all falls apart if we have no 
certainty with respect to what our budgets are going to be. And 
we are going to have a series of midcourse corrections and 
layoff notices back and forth and that is just going to destroy 
the kind of energy that you now see being engaged around the 
waivers, around Race to the Top.
    You had a chance to talk to the chiefs. I just wonder, what 
are you telling them----
    Secretary Duncan. Yes.
    Mr. Miller [continuing]. About this uncertainty?
    Secretary Duncan. Well, it is a huge concern. Again, I 
think it is so important for all of us here in Washington to 
listen to what is happening in the real world. And 
unfortunately, Congress so often acts, if they act at all, at 
the 11th hour at the 59th minute. And, you know, any 
responsible school superintendent or chief State school officer 
or governor, you know, they are setting their budgets now for 
the fall and if we don't act until, you know, the end of the 
calendar year, you know, third of the way--almost half the way 
into the school year, folks have a very legitimate question. Do 
they start cutting summer programs now, you know, in the fear 
that Congress won't get its act together, or can they plan to 
do the right thing?
    And so I would just, you know, desperately urge Congress 
not to wait until the last minute to come together. Nobody 
wants to see sequestration happen and I think it is sort of 
mutual self-destruction. But if we could get to a good 
resolution sooner than later and provide some certainty to 
people who are making real decisions about, you know, children, 
and number of teachers, and after school programs, and extra- 
curriculars, and summer school, I would really, really urge 
Congress to do that.
    Mr. Miller. Thank you.
    Thank you, Mr. Chairman.
    Chairman Kline. I thank the gentleman.
    Mrs. Biggert, you are recognized.
    Mrs. Biggert. Thank you, Mr. Chairman.
    And thank you for being here, Mr. Secretary. I know you 
have such passion for education and that comes very clearly in 
what--all the things that you did in Illinois and now----
    Secretary Duncan. Thank you.
    Mrs. Biggert [continuing]. Yes, for the federal education.
    But I have got some concerns, and some are--I would love to 
talk about the big broad picture but we don't have time, so I 
am concerned about Section 8002 payment being zeroed out in 
your budget. That is the Impact Aid, and that affects several 
of my school districts, and they rely on these funds and--but 
currently, already these payments arrive several years late, 
and I was just--I am really concerned that, particularly in 
Illinois, where we are in such funding trouble, that I think 
that the federal government is responsible for compensating 
these districts impacted by the federal land.
    Secretary Duncan. Yes. So just big picture, first of all, I 
feel lots of senses of urgency in many areas, but at the top of 
that list is what we do for the children of military families, 
and as I have traveled the country and, you know, talked to 
folks who are currently serving or veterans it is funny, they 
never ask for anything for themselves. They just say, ``Please 
take care of our kids.'' It is just amazing what they are--
their service. So this one is very, very personal.
    Impact Aid is about $1.2 billion. We are concerned on the 
backlog. We have eliminated that backlog. I think we are doing 
a much better job of making those payments. Please hold us 
accountable for doing that. We eliminated a small amount of 
money where there weren't actually children, but that--the huge 
lion's share of Impact Aid, $1.2 billion, remains intact.
    One of the things that was so encouraging about 46 States 
adopting common standards--I actually met with folks from the 
military schools the other day--is you know how much military 
families move and it was devastating to them to go to one State 
in third grade and another State halfway through third grade 
and see radically different standards. And to see so many 
States voluntarily adopting common college and career ready 
standards, the dividends, the benefits for military families is 
absolutely huge and we really want to work with them on the 
implementation there, as well.
    Mrs. Biggert. Okay. Well, this isn't just the military, but 
it is also for the laboratories and those kind of things, the--
--
    Secretary Duncan. That is right.
    Mrs. Biggert [continuing]. The land. And, you know, in 
Illinois right now they are talking about having the school 
districts pay for pensions because they are so broke----
    Secretary Duncan. Yes.
    Mrs. Biggert [continuing]. And this is not a good idea 
because it is--there just--there isn't the money. So this is 
very important to some of them.
    And the other issue that I have is--because of the economy, 
and we have seen such an increase in homelessness--
unprecedented numbers of children and youth, and at the end of 
2009-2010 school year public schools enrolled 930,900 homeless 
children and youth, and that is a 38 percent increase since the 
2006-2007 school year. My concern is that with the McKinney-
Vento really being in the ESEA and whether that is not going 
anywhere right now so that those funds are, you know, probably 
will not be increased, which means that a lot of the homeless 
children will not be getting the funding that is needed. So I 
am concerned that the Race to the Top might be consuming some 
funds that would otherwise accommodate this increase in 
homelessness.
    Secretary Duncan. Yes. And again, just an extraordinarily 
vulnerable population, as you know so well. And those numbers, 
unfortunately, are increasing across the country.
    Our budget request includes $65 million for homeless 
children and youth education, but as you know so well, this has 
to be school and community partnership. So where you have 
children who are hungry we have schools that are offering three 
meals a day in some places. You have places--and we did this in 
Chicago--that very quietly and discreetly sent children home on 
Friday afternoons with backpacks full of food so they wouldn't 
come back to school on Monday.
    If you have to provide eyeglasses--children can't learn if 
they can't see the blackboard. If you need to do dental 
checkups, dental exams, you have to do that. So for me, this 
can't be just what the school systems are doing; what are we 
doing with the wraparound services of nonprofits, with social 
service agencies, with churches to make sure those children are 
getting those opportunities they need?
    The final thing I would say is that for children who are 
homeless and dealing with just tremendous trauma, instability, 
often the only thing that is stable in their lives is their 
neighborhood school, and whatever we can do to keep those 
children in that school with their friends, with teachers who 
care about them is hugely important, as well. So we have to 
look at this comprehensively. This is a very real and growing 
challenge that many districts--many who historically didn't 
have any children who met this profile, unfortunately, this is 
becoming part of their reality.
    Mrs. Biggert. Well, that was all included in the No Child 
Left Behind, as far as making sure that the--that students 
would be enrolled immediately, which has been very important, 
and having that stability that they have in education. So I 
thank you.
    I yield back.
    Chairman Kline. The gentlelady's time has expired.
    Mr. Andrews?
    Mr. Andrews. Thank you, Mr. Chairman.
    I do want to return to our speculation discussion about 
IDEA and just point out that if you take the numbers--and the 
Ryan budget will be on the floor tomorrow--and you apply them 
across the board pro rata there is a $2.2 billion cut in IDEA. 
Now, if you want to restore that cut that means you cut tutors 
in math and reading under Title I, or you cut Work Study for 
college students in that area, or Pell Grants. So, you know, if 
this is going to be evened out somehow let's understand that it 
is not speculative at all that there will be----
    Chairman Kline. Will the gentleman yield?
    Mr. Andrews. I would be more than happy to.
    Chairman Kline. But you are, indeed, speculating on whether 
it is going to be across the board or not. The point is we have 
to set priorities and my argument is that we ought to have the 
priority be IDEA funding.
    Mr. Andrews. Reclaiming my time, if it is not across the 
board, can the chairman tell us where he would cut and by how 
much to make up the $2.2 billion cut?
    Chairman Kline. A debate we are looking forward to going 
ahead, but clearly, my preference would be to take it from 
other areas and make sure that we are increasing funding for 
IDEA.
    Mr. Andrews. Reclaiming my time, of course, the other 
areas, as the secretary well knows, are reading and math 
tutors, Work Study for college students, Pell Grants, things 
that we think are very, very important, and I think we all 
think are important.
    Mr. Secretary, I think there are three points of consensus 
here. One is that we should have high standards for all of our 
students; the second is when students don't meet those high 
standards we should have effective remedial actions; and the 
third is that the inability of Congress to reauthorize the No 
Child Left Behind Act has really impeded that progress in some 
very important ways.
    You have responded to that with what I think is a well 
thought out program of waivers that are designed to increase 
State flexibility, local flexibility. At the same time we are 
maintaining our commitment to the standards that I just talked 
about.
    Can you give us some examples in the 11 States that you 
have granted waivers for of innovative and progressive ideas 
that you think will be implemented because you gave those 
waivers?
    Secretary Duncan. Sure. Just let me talk philosophically 
that I think what No Child Left Behind got fundamentally wrong 
is it was very, very loose on goals, so 50 different standards, 
50 different goalposts, many of which got dummied down to make 
politicians look good but were bad for children, but very 
tight, very prescriptive on how you get there.
    We have tried to flip that on its head with the waiver 
process, and again, I think it is a model that would be helpful 
as Congress moves forward--really empower local educators; 
frankly, get Washington out of the way. For me the tradeoff is 
simple: Where there is a high bar, where folks are talking 
about college and career ready standards, where they are 
willing to be held accountable to that high bar, give them so 
much more flexibility to hit that. Get out of their way; let 
them be innovative and let them be creative.
    So what we are seeing coming from States is fascinating. In 
Minnesota you have high-performing schools starting to partner 
with low-performing schools to make sure that they are sharing 
those best practices and learning.
    What was interesting is some folks thought or were 
concerned that we were somehow going to abandon accountable in 
the waiver process. The furthest thing from it. Actually, in 
many States--this gets a little technical, a little weedy--but 
many States actually have many more children in their current 
accountability system in the waiver process than they did in No 
Child Left Behind because those children were invisible due to 
large end sizes.
    So I was recently in Colorado. Colorado has an additional 
160,000 children--160,000 African American, Latino, special 
needs children who are now part of the State's accountability 
system who----
    Mr. Andrews. Let's just pause on that for a moment because 
I think it is important that we laypeople can understand it, 
too. What you are saying is that under the existing law in 
Colorado there were 160,000 minority children----
    Secretary Duncan. And special needs children.
    Mr. Andrews [continuing]. And special needs children for 
whom measurements were really not being taken about their 
progress----
    Secretary Duncan. Those children were invisible under No 
Child Left Behind----
    Mr. Andrews. They were, pardon the pun, left behind. And 
now that you have had this waiver in Colorado the creative 
decisions by the State and local decision-makers now have us 
looking at those children and assessing their progress, and 
presumably enacting good remedial measures.
    I mean, I would, frankly, encourage you to consider more of 
these waivers with high standards and flexibility. Do you 
intend to do that?
    Secretary Duncan. So we have 27 States who have applied to 
us. We are actually going through the peer review process that 
the chairman talked about this week. I am actually leaving here 
to go talk to the peer reviewers. And then we will be making 
determinations on those on a rolling basis as we move into next 
month, and then we will have another round of States who will 
probably come in September.
    So there is, again, tremendous interest out there across 
the political spectrum from States----
    Mr. Andrews. I will also tell you, Mr. Secretary, I am 
beginning to see the benefits in my own State and I will tell 
you that both our Republican governor and our Democratic 
legislators were in favor of this waiver happening. We think it 
is good for the children in New Jersey. And I thank you.
    Secretary Duncan. And New Jersey actually had a very 
interesting application.
    Chairman Kline. Thank the gentleman.
    Mr. Platts?
    Mr. Platts. Thank you, Mr. Chairman.
    Mr. Secretary, thanks for being here and for your 
testimony. I certainly welcome and support your overall message 
and the president's message that especially in today's world 
access to affordable, quality education--basic education and 
higher education--is key to us remaining that land of 
opportunity that we take so much pride in as a country.
    I am going to mention a couple issues just to put on your 
radar and then maybe get into one more specific. One is just I 
appreciate your reference to early education issues, and Head 
Start, in particular, Even Start--early--Head Start, the 
importance of making that investment up front.
    Along with that is something that is not real prominent or 
focused on in the budget proposal, and that is family 
engagement.
    Secretary Duncan. Yes.
    Mr. Platts. You know, I know as a parent yourself and for 
my boys now in seventh and ninth grade, I know that our 
involvement in their education is key. Congresswoman McCarthy 
and I have worked on an issue dealing with the Parent 
Information Resource Centers, which is really the only, you 
know, program in the federal government focused solely on 
family engagement. And so we are pushing with appropriations 
trying to get some money set aside--make sure that that program 
is adequately funded so that we have the means to ensure 
parents are engaged.
    I would also just quickly reference the special education 
challenge. You know, first 20 years, single digit dollars. 
President Clinton--Democratic president, Republican governor--
or, Republican Congress came together. We get up to about 20 
percent and the concern is that we are going to start dropping 
back, that that is on your radar.
    And also, my colleague here from Illinois' homeless 
children--my one sister is a social service coordinator between 
her school district, social service agencies, and, you know, in 
schools that--in my district people don't think we have any 
homeless children. They are shocked when they see the numbers 
of how many children are in their district that are homeless.
    I want to get into more detail on higher education. 
Especially appreciate the focus on Perkins Loan reform, Work 
Study, the improvement and expansion in the Stafford Loan 
issue. As one who could not have followed my dream of serving 
in this Congress without Perkins Loans, without a Work Study 
job in college, without Stafford Loans, I would not be here 
today. Behind my parents, that opportunity I had----
    Can you expand--you talked about in the Perkins Loan of 
doing something similar as we did on the Direct Loan program 
and how to reform it. I supported the Direct Loan program 
effort and the savings on that program. The official estimate 
was, I think, about $80 billion over 10 years.
    Can you share any more detail on what you are looking at 
doing in that area?
    Secretary Duncan. Sure. And so just to step back, again, 
every study--we just had another one come out yesterday--says 
as a nation we are going to need dramatically more college-
educated workers than we have today. Study came out yesterday 
said about 23 million more degree-holders will be needed by 
2025 than we are producing today, so huge sense of urgency. If 
we are going to keep good jobs here and not have them go 
overseas we have to dramatically increase college completion 
rates.
    Big part of that has to be access, so one of the things I 
am most proud of is an additional $40 billion in Pell Grants 
for young people. Did that, simply stopped subsidizing banks, 
put all those resources into young people. It was a little 
controversial here in Washington and we thought that made 
absolute common sense. Just in the past 2 years we have gone 
from 6 million young people with access to Pell Grants to 9 
million--a 50 percent increase.
    On the Perkins Loans, we want to significantly increase 
opportunity and our proposal would go from about 1,700 schools 
offering Perkins Loans to about 4,400. We would go from about 
500,000 recipients to almost 2 million--looking to quadruple 
that and to have the average loan go from about $1,800 to 
$4,400. So these are all pieces of increasing access.
    Again, we have to challenge States to continue to invest. 
We can't do it by ourselves. We have to challenge universities 
to not have tuition that is skyrocketing much higher than 
regular inflation. We have to provide much greater transparency 
so young people and their families can make good choices.
    But it is a piece of the puzzle. Pell Grants, Perkins 
Loans, Work Study that you talked about, doubling those 
opportunities we think are hugely important to increasing 
access to higher education.
    Mr. Platts. Real quickly before I run out of time, is it 
fair to say if we do not find a way to maintain the 3.4 percent 
rate on Stafford Loans then in essence we will be making--or 
getting a windfall on the backs of students because our 
borrowing rate as a government is, you know, what, maybe 2 
percent and we would be charging 6.8?
    Secretary Duncan. Again, to double that interest rate now 
for young people makes no sense whatsoever.
    Mr. Platts. Okay.
    Thank you, Mr. Chairman. I yield back.
    Chairman Kline. Mr. Hinojosa?
    Mr. Hinojosa. Thank you, Mr. Chairman.
    Secretary Duncan, thank you for coming to testify before 
our committee. Thank you for outlining your priorities for the 
U.S. Department of Education for fiscal year 2013.
    According to the Consumer Financial Protection Bureau, 
total outstanding student loan debt surpassed $1 trillion late 
last year. In fact, student loan debt now exceeds credit card 
debt for the first time. To make matters worse, the Republican 
budget would allow interest rates for student loans to double 
in July of this year, as was pointed out by Congressman Platts.
    Mr. Secretary, how would President Obama's college 
affordability proposals provide relief and assistance to the 
low-income and middle-income students and families that 
Congresswoman Biggert asked about?
    Secretary Duncan. So there are a number of issues here. 
Obviously, having that interest rate double in July through 
congressional inaction to me is not acceptable. We need 
Congress to act, and to act together.
    We have talked about Pell Grants and what that is doing to 
increase access. We have talked about Perkins Loans and what 
that would do. I think doubling Work Study would be hugely 
important for so many people like Congressman Platts, who 
worked their way through college and need more of those 
opportunities.
    And then on the back end, looking to reduce those debt 
repayments through income-based repayment, where loan 
repayments are indexed to your income. If you are making more 
you pay more; if you are making less you pay less. And then 
finally, if you go into the public service, after 10 years of 
being a teacher or working in government or working in 
nonprofit those debts are erased and forgiven.
    So we are trying to work extraordinarily hard on the front 
end, trying to provide relief on the back end. But I just want 
to again reiterate, we as the federal government can't do this 
by ourselves.
    States have to invest in higher education. Last year 40 
States cut funding to higher education. I recognize budgets are 
tough but that is not good for our country. And then 
universities have to keep down tuition.
    We are seeing some great creativity from many universities 
going to 3-year programs, no frills campuses, using technology 
to reduce costs and to actually increase passing rates in some 
of those intro classes, but we need to incentivize States to do 
the right thing and institutions to do the right thing, as 
well. We can't do this by ourselves here.
    Mr. Hinojosa. In your testimony you indicated the U.S. 
Department of Education issued 11 No Child Left Behind waivers 
to date and talked about the next, I think, 27 States that have 
applied. Are you allowing States to waive their annual 
measurable achievement objectives for English language learners 
under Title III?
    Secretary Duncan. No. Actually, it is, again, so 
interesting. Folks are actually holding themselves to a higher 
bar, which has been very encouraging, and looking at every 
single subgroup, whether it is English language learners, or 
students with special needs, or African American children, or 
Latino children, looking at those subgroups and how they are 
improving each year is very, very important, and not just 
looking at absolute test scores, which I am not a big believer 
in, but looking in growth and gain, how much are they 
improving.
    You see some States moving way beyond just test scores, 
looking at increases in graduation rates, looking at reductions 
in dropout rates, looking at the percent of students going to 
college--going to college not needing remedial classes, going 
to college and persevering. More complicated, but it is much 
more sophisticated, you know, much more comprehensive. And 
again, once Congress moves forward together on reauthorization 
I think they are fantastic examples for them to learn from.
    So for English language learners, students with special 
needs, much greater accountability than existed before, and 
coupled with that greater accountability, additional support.
    Mr. Hinojosa. The percent of English language learners has 
increased and is moving up faster, especially in my State of 
Texas. How are you monitoring State plans and ensuring that 
school districts achieve their performance targets and increase 
high school graduation rates for all students, particularly for 
the subgroups we were discussing?
    Secretary Duncan. So these are waivers that aren't granted 
indefinitely and we will continue to monitor folks' progress 
against hitting those goals. And if folks either have a lack of 
capacity, or act in bad faith, or aren't moving we have the 
ability to revoke those waivers. And that is not something we 
want to do or look forward to do; we want to partner with these 
States to be successful. But if a State commits to certain 
things and then decides they no longer care about the results 
or the performance of English language learners we absolutely 
have the power and ability to revoke that waiver.
    Mr. Hinojosa. I attended an event here at the Rayburn House 
Office Building this week sponsored by the Lumina Foundation 
and Georgetown University and they released a study that 
indicates our undereducated population in the whole United 
States, and it lists them by States, and it is really troubling 
to me that we would want to make the cuts in the proposed 
budget by the majority today seeing that our country is falling 
way behind other countries, and that really concerns me.
    Chairman Kline. Sorry. The gentleman's time has expired.
    Dr. Roe?
    Mr. Roe. Thank the chairman.
    And certainly thank the secretary for being here today and 
all the work you have done for the nation's schoolchildren. 
Just a couple of points I want to go over. One is affordable 
college and the college loans we have talked about and Pell 
Grants, and I will start with Pell Grants.
    Certainly we have had a great increase in the Pell Grant 
funding, and let me just go over some concerns that my--the two 
community college presidents in my district brought up--
Northeast State and Walters State Community College. Pell Grant 
is $5,500. In Tennessee if you go to a community college you 
get a $2,000 Hope Scholarship. We use all of our lottery money 
for college scholarship, so 4-year college you get $4,000 and 
$2,000 for community college.
    In doing that, the cost of the community college is about 
$4,000 a year, so you actually make money when you get the Pell 
Grant. What are you doing for fraud and abuse?
    It would look to me like that the Pell Grant would be to 
pay for college, and I know when I was in college, or when Mr. 
Platts or others in this room--I can look by the gray hair on 
our heads--that you could work your way through college, and 
you can't do that now. It is just too expensive.
    And my question is, what is the department doing to look at 
how much more money--I can find your IDEA money, I think, in 
the Pell Grant program. We have people that are buying cars at 
home with their Pell Grant money.
    And it should go to the college, I think, to pay for the 
books, and fees, and tuition, and the cost of college. But you 
shouldn't make money going to community college.
    Secretary Duncan. First of all, I just want to say, 
Tennessee is doing some remarkable things in driving reform. 
You should be really, really proud of what your State is doing.
    Obviously, whether it is FSA, whether it is our inspector 
general, if there is fraud or abuse of taxpayer dollars we have 
to look at that very, very seriously, and I pledge to you, we 
will continue to do that. I will say, community colleges I 
think are a huge part of the solution to where our country 
needs to go and folks, you know, 18 years old or 58 years old 
going back to retrain and retool in green energy jobs and 
health care jobs and I.T. jobs--as families get back on their 
feet the country is going to get back on its feet. I think 
community colleges have a real role to play there.
    Mr. Roe. Totally agree.
    Secretary Duncan. So many folks in community colleges are 
older, they have children. It is not like they are wealthy. 
They are going back because they have struggled in a changing 
economy and going back to get those skills.
    So where there is abuse we will look at it. The folks I 
talk to are frankly extraordinarily inspiring and are working 
very, very hard to take that next step up the economic ladder.
    Mr. Roe. If I can find that information--and I can--I will 
get that to you. And I want the funds used where we get the 
maximum bang for the buck, as you do, so I want to make sure--
--
    Secretary Duncan. Absolutely.
    Mr. Roe [continuing]. That we are spending it and more 
people can use and take advantage of this money that is out 
there.
    Now, college affordability--let me go through this a little 
bit, and it is a little bit complicated. Tennessee has had this 
problem. We tried to reform our health care plan in the early 
1990s, called TennCare, and we did that and we expanded our 
Medicaid program so much that it--that we haven't had any or 
minimal increase in higher education funding in 20 years in 
that State.
    And you just pointed out that 40 States actually cut 
funding to higher education, which means that the cost is going 
to go up--it is a proverbial catch-22. So you have got it, and 
instead of making college less expensive we have actually 
funded our Medicaid program. We have got an Affordable Care Act 
that is going to massively expand Medicaid and it scares 
Governor Bill Haslam to death with his extra cost he is going 
to have with the expanded Medicaid.
    So they are all tied together because there is just one pot 
of money that we have in our State. We have to balance our 
budget. We don't have the privilege here of having a budget 
deficit in Tennessee in our cities, or--we have a balanced 
budget amendment, I think, as 49 States do.
    So to your point, it is all tied together, and when we 
talked about the Ryan budget, it is looking at the entire 
budget. I know you are the Secretary of Education and you have 
got to look at it for education, but our job is to look after 
the entire budget.
    And I want to go through very--Mr. Hinojosa has left, but 
to his point on student loans I wanted to make--actually, there 
is a little more to that student loan, and you and I have 
talked about this yesterday. It would be horrific for rates to 
go from 3.4 to 6.8 if you have got $100,000 in student loans.
    But going back and reviewing this, actually the Deficit 
Reduction Act of 2005 the Republicans proposed eliminating the 
fixed rate, and it wasn't included in the final bill. If we had 
done that it had a variable rate it would be a 2.3 percent 
interest rate now for students.
    Why doesn't it float? And by the way, in the president's 
budget this is only a 1-year fix. In the 2013-2014, as you 
know, it goes back to 6.8, and I think students across the 
country shudder at that. Why don't we just have a variable rate 
where they can take advantage of these very low interest rates 
now?
    Secretary Duncan. Again, I think we want to work together 
with you to make sure these rates don't jump up and to maintain 
it for the long haul. And so I think we have an immediate need 
now we want to address but I think your long-term concern we 
absolutely share with you and want to partner with you to 
figure out how that doesn't happen.
    Mr. Roe. Okay.
    And I thank you, Mr. Chairman. I yield back.
    Chairman Kline. Thank the gentleman.
    Mrs. Davis?
    Mrs. Davis. Thank you, Mr. Chairman.
    And, Mr. Secretary, good to see you. I want to first ask 
you to talk a little bit about the president's budget and the 
consolidation of programs. As you know, we were talking about 
the proposal here on ESEA was looking at one large block grant, 
and many of us were very concerned that programs for the most 
needy children, and the reason, really, that we created the 
program to begin with, would be essentially lost through the 
cracks.
    Talk about the consolidation programs. How does that help 
State and local districts and where is that flexibility? 
Because as we all know, I mean, school districts look for that 
flexibility and we all think that is important but we don't 
feel that we could, you know, leave kids behind in that regard.
    Secretary Duncan. Yes. So again, all this stuff is trying 
to really figure what is the appropriate federal role. And 
again, I would go back to where I started. My premise is where 
folks are willing to hold themselves to a high bar and hold 
themselves accountable for hitting that high bar I want to be 
less prescriptive from Washington and give them more room to 
move and more flexibility.
    And obviously the best ideas in education aren't going to 
come from me or, frankly, any of us here in Washington. They 
always come at the local level.
    And what I have seen across the country, whether it is 
waivers, whether it is Race to the Top, is this huge amount of 
creativity and this huge amount of innovation. And I will tell 
you, we have seen as much innovation reform from States who 
didn't get a nickel from us as States that got hundreds of 
millions of dollars. And so in really empowering these 
educators to continue to drive reform forward, I think that is 
a really appropriate federal role.
    Mrs. Davis. But how does that work and a larger block grant 
does not work? And if you could, you know, even look to those 
States which don't necessarily have waivers--California and 
other States.
    Secretary Duncan. Yes. So again, we have to sort of look 
State by State at how serious they are and what they are doing, 
but for me the tradeoff is where folks are holding themselves 
to a high bar for English language learners, for students with 
special needs, for, you know, increasing graduation rates, more 
students going to college--should we give local superintendents 
more room to move? We should.
    I will just give you one concrete example. When I was the 
superintendent of Chicago Public Schools I had to get in a 
fight with our Department of Education here for the right to 
tutor about 25,000 children after school. I had Washington 
telling me I couldn't tutor kids after school who wanted to 
work hard. That made no sense to me.
    That is the kind of flexibility. Hold me accountable for 
improving their results but give me the opportunity. Don't tell 
me I can't tutor 25,000 children after school who are trying to 
do better academically. That is not appropriate.
    Mrs. Davis. Yes. Okay, well I think what we maybe need to 
work harder at trying to understand the differences----
    Secretary Duncan. Yes.
    Mrs. Davis [continuing]. That are out there and how that is 
really affecting our kids.
    I wanted to also just turn quickly to the issue of our 
veterans----
    Secretary Duncan. Yes.
    Mrs. Davis [continuing]. And educational programs for them, 
because we know that there is a tremendous amount of transition 
as people return from a war theater, but even that as we 
downsize the military, we are going to have a lot of people who 
are looking to careers and certifications. How can we best work 
with the Department of Education as well as, I think, the 
Department of Labor--Secretary Solis was here the other day--, 
and Veterans Affairs--getting out information to veterans about 
what programs really are out there and work best for them? We 
know for-profits, nonprofits, university systems, it is very 
hard to go to one place to get that kind of information.
    Secretary Duncan. I actually met with a group of veterans, 
you know, 10 days ago, and the package of information they come 
when they are leaving service I think is not maybe as 
informative as it should be, and so we really want to work hard 
with the V.A. to make sure they know all their opportunities--
you know, community colleges, 4-year institutions, whatever it 
might be--how we help them articulate the real skills and 
knowledge they have developed in the military and use that to 
move forward in their academic career.
    I would love many, many more veterans to become Troops to 
Teachers programs, and we need more men and we need more 
diversity to workforce. There are so many strong leaders there, 
and if you have been to Iraq and Afghanistan you are not too 
scared about going to teach in an inner city school; you can 
handle that. And so I think there is so much we can do to 
better support our veterans, give them much more comprehensive 
information, and we want to be a better partner with the V.A. 
to make sure that is happening.
    Mrs. Davis. Is it appropriate to put some limit on the 
amount of federal dollars that any particular school can take? 
I know there are proposals for 90/10, so at least 10 percent 
has to be nonfederal dollars. What makes sense?
    Secretary Duncan. I think we have to look at all those hard 
issues. My big thing is the last thing I want is for a veteran 
to get abused coming out after serving their country and to 
somehow take on more debt than they can handle to get training 
that doesn't lead to a real job. That is just absolutely 
immoral.
    And so making sure that veterans have good options, are 
getting, you know, the education they need to get the job they 
need to keep moving forward--that, to me, is our collective 
common interest and that is what we have to--we have to make 
sure we get that done.
    Mrs. Davis. Is there some way we can hold those schools 
accountable for that?
    Chairman Kline. The gentlelady's time----
    Secretary Duncan. We absolutely need to.
    Chairman Kline [continuing]. Has expired.
    Mr. Walberg?
    Mr. Walberg. Thank you, Mr. Chairman.
    And thank you for being here, Mr. Secretary. We have heard 
many remarks this morning about the cost of college and yearly 
increases in tuition at some institutions outpacing the rate of 
inflation significantly.
    I have my own concerns about the relationship between the 
history of increases in federal aid and the increases of 
tuition rates. Do you know whether the National Center for 
Education Statistics has conducted any recent studies in the 
correlations between federal student aid and tuition prices?
    Secretary Duncan. Yes. There are a number of different 
studies. We look at this very, very closely. I looked, just for 
example, at Pell Grants over the last 30 years, and it is 
interesting, in--to be clear, over the past 30 years every 
single year tuition has gone up as a country. Over the past 30 
years--my numbers won't be exact--I think in 19 of them Pell 
Grants went up, in 10 of them Pell Grants were flat, and in one 
of those years Pell Grants actually went down, but every single 
year tuition went up. And so that is the kind of information we 
are looking at historically.
    Mr. Walberg. That is good information to look at because 
there is concern that when we have automatic funding 
opportunities and then we have the impact of the entire federal 
budget on our States----
    Secretary Duncan. Yes.
    Mr. Walberg [continuing]. And a centralized government that 
becomes more aggressive in eating up dollars that can go back 
to districts we can have those problems, and it is a challenge 
at every level.
    But, you know, when I--as I watched your time at the 
Chicago Public School System, where my daughter taught, in 
fact, until she gave us--my wife and myself--the opportunity to 
be spoilers of young children with our grandchildren--I was 
impressed very much with your creativity. When you speak about 
what is going on in the States today, even right now, as you 
appear before us, you can just sense the creative juices that 
flow with the opportunity for individual States and local 
school districts to make great choices, creative choices, 
productive choices for their students.
    When you speak about the federal government's 
responsibility, even in your opening statements, frankly, I 
must admit, it frightens me because of the impact of a growing 
government that gives less opportunity for States and local 
communities to develop that creativity to teach our students 
with the needs that they have. And I know you speak for the 
administration and I know that is a challenge to be in a 
position as a producer in education but now also directing a 
federal government program, agency that is a relatively new 
agency in the whole grand scheme of things.
    What specific efforts at the department can you point to, 
Mr. Secretary, that demonstrate a reduction in the federal role 
of education, and ultimately the role that siphons off limited 
local State dollars?
    Secretary Duncan. Two huge examples, the entire Race to the 
Top initiative is just trying to empower the great ideas of 
local educators, and all those States that we funded put 
together--46 States put together plans. Those weren't our 
plans; those were all locally developed with huge buy-in. And 
so what we are trying to do is put resources behind the great 
ideas at the local level----
    Mr. Walberg. With significant top-down management of that.
    Secretary Duncan. Again----
    Mr. Walberg. In Michigan it certainly was.
    Secretary Duncan. Forty-six States put together their own 
plans voluntarily.
    The second one would be the whole waiver process, where I 
think we in Washington are in the way. I think No Child Left 
Behind law is fundamentally broken. It is 5 years overdue to be 
fixed. I think we all agree on that. And the fact that we were 
able to get Washington out of the way for 11 States to date--
and we have got many more coming--I think is a huge step in the 
right direction to empowering local educators.
    Mr. Walberg. I would certainly say the waiver system is, 
and I think it evidences why we need to get further out of the 
way as the federal government. And in fact, our No Child Left 
Behind reauthorizations that we have done so far goes that 
direction in giving just general oversight but a great amount 
of opportunity for our local States.
    How many notices--let me ask in final seconds here--how 
many notices of proposed rulemakings have you issued that have 
a full 90-day comment period?
    Secretary Duncan. I don't know an exact number. I would 
have to get back to you on that.
    Mr. Walberg. I would love for you to get back on that, 
because again, that is another opportunity that I think flows 
into your wheelhouse of desiring good input from local 
education professionals to make sure it works at the local 
level, and I think we need more opportunity for people to 
express their concerns, their ideas, their objectives, and 
ultimately get away from this top-down federal--I would hate to 
say mismanagement, but management of a system that, frankly, 
isn't serving a lot of our districts well.
    Secretary Duncan. The other thing, if I could just quickly 
add, one area where we are really thinking about going forward 
is how we elevate the teaching profession itself so we have 
many more young people, like your daughter, committing to do 
this. And as I look at these high performing countries around 
the globe, teachers are paid at a very different level, they 
are respected at a very different level, there is a different 
level of status. I think educators and education has been 
beaten down here for far too long, so hopefully this will be an 
area of common work going forward of how we bring in this next 
generation of extraordinary talent to replace the baby boomer 
generation that is retiring.
    Mr. Walberg. I applaud that--professionalism versus labor.
    Chairman Kline. The gentleman's time has expired.
    Ms. Fudge?
    Ms. Fudge. Thank you, Mr. Chairman.
    And thank you, Mr. Secretary, for being here. Certainly you 
knew when you came in today that you were in a no-win 
situation. You know, we have got a cut chorus in our majority 
that cut, cut, cut, et cetera, when they don't want it cut. So 
you knew you were going to be in a difficult spot.
    I have three questions for you, Mr. Secretary, and I want 
to ask them all at once and then give you the balance of the 
time to answer all three.
    The first one deals with Race to the Top and other 
competitive funding. I mean, certainly you look at the fiscal 
year 2013 budget and see that you would increase competitive 
grants from 12 percent to 18 percent of the budget. Now, when 
so many States are continuing to cut education funding how does 
this shift away from formula grants benefit all students, which 
I believe is what the federal government should be trying to do 
is benefit all students, especially when I come from the State 
of Ohio and we did receive Race to the Top funding but within a 
few months we changed governors and he wanted to immediately 
change how those resources were to be spent? That is question 
number one.
    Question number two: There are almost 2,000 high schools--
13 percent of all high schools in America--that are labeled 
dropout factories. In these dropout factories the typical 
freshman class shrinks by 40 percent or more by the time 
students reach their senior year.
    In my home State of Ohio approximately 135 schools are 
labeled dropout factories. Now, I acknowledge that the issue of 
dropout factories is not a new issue; however, it has festered 
for a very long time--too long. So I want to know what steps 
you are taking to decrease the number of dropout factories.
    And thirdly and lastly, Mr. Secretary, the Cleveland 
Central Promise Neighborhood, a neighborhood located in the 
heart of my congressional district, has applied twice for the 
department's Promise Neighborhood Grant. In both rounds of 
funding the organization scored very high; however, not high 
enough to receive an implementation grant. The question is, 
does the department have any plans in the future to use its 
discretionary power to award previous high-scoring applicants 
instead of making them go through the costly process again?
    Secretary Duncan. Three great questions. Let me try and 
take them--my numbers differ a little bit from yours. I am not 
seeing in our budget a huge increase from 12 to 18 percent on 
competitive dollars; I think it is about at 16 percent. But I 
do think we need to--this sort of goes to your third point of 
the tension between, you know, formula and competitive--we 
think the overwhelming majority of our dollars always should be 
and always will be formula-based, but we also think we need to 
reward excellence.
    Our challenge in things like Promise Neighborhoods is, for 
example, the first round we had 300 applicants--fantastic 
applicants. We only had competitive dollars to fund 20, and 
that is--so that is the tension that we are always trying to 
hit.
    And so as we move forward we are asking for more money for 
Promise Neighborhoods. We think that is a huge part of the 
answer. Your question of how--whether we fund down the slate or 
re-compete is a really good question that we will sort of take 
that up and think through how we will do that. But again, I am 
just asking you to give us some flexibility to reward more 
excellence.
    I have to just give you another example----
    Ms. Fudge. Well, let me just say this, and I think that you 
are right, but the problem being that every single child in 
this county deserves a good basic education.
    Secretary Duncan. Hundred percent agree. And we also need--
so we need to do that--I think we have to do both. We have to 
do that and we have to help some folks move forward to the next 
level and really encourage that.
    And it is interesting on--just yesterday I met with Ohio's 
State Race to the Top team, and for all the political turmoil 
and upheaval that team has just kept working really hard, and 
we actually feel very, very good about what they are doing, so 
they have sort of kept the politics to the side. They are doing 
some really innovative----
    Ms. Fudge. You can't keep the politics to the side.
    Secretary Duncan. Well, they have done as good a job as 
anybody and they are moving forward in a very, very good way. 
We actually feel very good about Ohio's results. And again, I 
just give them tremendous credit because we know how difficult 
that is.
    Your middle point around the dropout factories, and it sort 
of goes back to the previous question about what is an 
appropriate federal role. Race to the Top has got all the 
press. That is fine. That is $4 billion for the whole country.
    We have put $4 billion behind the bottom 5 percent of 
schools--those dropout factories. There is a massively 
disproportionate investment, not in the status quo but in a 
very different vision of reform.
    And where are we being effective? Recent numbers have come 
out--and these are very early so I don't want to get too 
carried away--but we are seeing significant reductions in 
dropout rates in many of these places, significant increases in 
graduation rates. One in four have seen double-digit increases 
in math scores in 1 year; one in five have seen that in 
reading. Nobody predicted that was possible.
    And for all the data--two other quick numbers: We are 
seeing a reduction in the number of high schools that are 
dropout factories in the country. We have 400,000 less children 
to date going to a dropout factory than just a couple years 
ago.
    None of these schools are where we want them to be yet. 
They still have a long way to go. But huge progress there--more 
time, more social workers, more counselors, paying math and 
science teachers more, real innovation coming at the local 
level.
    But for all the data, the most important thing is when I go 
talk to the students at these schools what they say is so 
profound. And you talk to, you know, children who are juniors 
in high school who were in the previous situation for 2 years, 
now in a turnaround school, one young man said, ``Arne, if this 
would have couple years ago more of my friends freshman year 
would still be here with me. We have teachers who care. We are 
working in very different ways.''
    And so we need to look at the data but we need to listen to 
young people. All of these are not wild success stories; some 
of them still have a long way to go. But I am just so thrilled 
for the first time as a country we are not just expecting the 
status quo; we are not standing by complacency--complacently 
and letting black and brown children, poor children just, you 
know, go off into the streets, and as a country we are in the 
business of turning around schools and we feel very, very good 
about our ability to support that hard work.
    Chairman Kline. The gentlelady's time has expired.
    Dr. DesJarlais?
    Mr. DesJarlais. Secretary Duncan, great to see you today 
and thanks for being here. I would like to spend my time, I 
think, talking about the first part of your opening statement, 
and that would be the cost of the higher education. I think you 
referenced maybe a five-fold increase in cost at over--what 
timeframe was that?
    Secretary Duncan. In a short amount of time. It has gone up 
way--that higher education costs are going up much faster than 
the rate of inflation.
    Mr. DesJarlais. Okay. And I think you and I both agree that 
good education is not going to happen without a motivated 
educator and a motivated student. So what I have found in 
talking to some of the presidents of the universities that are 
in Tennessee--MTSU, Dr. McPhee, and over at University of 
Tennessee, Knoxville, as well--is that there are so many 
students now that come in on the 5-or 6-year plan. And I guess 
the cost--if an average credit--or a semester is 12 credit 
hours, as opposed to 16 or maybe 18 when we went to school, 
one, what can we do to address that? And before we get into 
that, though, what, in your opinion, has driven the cost of 
these institutions to that five-fold increase in a short period 
of time?
    Secretary Duncan. Yes. No short, easy answer. These are 
complicated questions.
    A big part of the problem--so I will get to the higher 
education piece--big part of the problem is the pipeline. We 
have so many young people who are graduating from high school 
who aren't college and career ready and so they are taking 
remedial classes, they are burning Pell Grants, they are taking 
5 and 6 and 7 years to graduate. So again, not overnight, but 
seeing 46 States raise standards--college and career ready 
standards--is a huge direction in who is moving in the right 
direction.
    And far too many young people think they are graduating 
college and career ready and they are never close. Higher 
education didn't talk to K-12 and so those disconnects, I 
think, have led to those 5-and 6-and 7-year, you know 
challenges. And having students--many more students graduate 
college and career ready is a big step in the right direction.
    I have gone to some communities where--this isn't the 
dropouts; this is the graduates--where 90 percent of high 
school graduates are taking remedial classes--90 percent. So we 
have been lying to them, as a country. And we have to challenge 
that. So that is a piece of this, not just on higher education 
alone.
    On the higher education side, again, not one easy thing. As 
we have heard repeatedly, when States cut back their investment 
tuition goes up, and so where States don't invest particularly 
in the publics they go up, but I think we have to challenge 
universities, as well, to become more creative. Some have been 
slow in using technology in different ways.
    There are a whole set of universities now that are being 
very creative in keeping down costs and actually getting better 
academic outcomes for young people. We are just trying to take 
those best practices to scale and provide some incentives for 
States to invest, for universities to do the right thing. And 
again, for me it can't just be about access; it has got to be 
about completion.
    Mr. DesJarlais. Okay.
    Secretary Duncan. I think we haven't done enough at the 
federal level to incentivize completion.
    Mr. DesJarlais. Definitely I don't think we are going to 
solve this problem without accountability no matter how much 
money we put on it. You know, the costs keep going up. If we 
don't have prepared, motivated students coming then it doesn't 
matter how much we raise the Pell Grant, we are not going to 
get an end product that we desire.
    And if we want to put on our business hats for a minute and 
the federal government is going to invest in education you want 
to see some return on investment. Right now I don't think that 
we are seeing a good return on investment despite heaping more 
and more money on it, and that seems to be the federal 
government's philosophy across the board outside of education 
as well--if something doesn't work let's just put more money. 
It is kind of like the tail wagging the dog; it is almost like 
we have an ongoing bailout of educational institutions.
    And, you know, I just--as we looked at this budget and we 
see the Pell Grants that have gone from $12 billion up to $40 
billion since President Obama took office, I don't think we are 
seeing a return on that investment. Do you?
    Secretary Duncan. Well, it is very early, but the fact that 
we have gone from 6 million young people having access to Pell 
Grants to 9 million just in the past 2 to 3 years, actually I 
think that is a big step in the right direction. One very, very 
encouraging number is in the past year we have seen a 24 
percent increase in the number of Latino students going on to 
college and--those enrolling. Now we have got to make sure they 
graduate. But I actually do think there are some very 
interesting trends in the right direction.
    Mr. DesJarlais. Okay. But that is the key is completion, 
and instead of throwing more money first it seems like we ought 
to fix the problem. We ought to fix why the costs continue to 
go up and up, because if we don't slow the costs we are never 
going to catch up by heaping more money, and especially if we 
don't have students that are college ready and motivated then 
in a sense we are wasting the taxpayers' money and throwing it 
away. So I think we are ignoring the big problem here and we 
need to have that discussion before we discuss increasing the 
amount of money we spend.
    Secretary Duncan. Yes. Just to be very clear, I don't think 
we are ignoring it. We are actually proposing a Race to the Top 
for higher education to incentivize States to invest and to 
incentivize universities to do two things: keep their costs 
down and to make sure that young people--first generation 
college goers, Pell Grant recipients--are graduating.
    So I think we are actually very much in harmony there. I 
don't think we have done enough to incentivize completion 
historically, and that is exactly what we are trying to do.
    Mr. DesJarlais. And we are not going to fix it unless we do 
that, and I thank you. I would be happy to work with you more 
on those issues and appreciate your time.
    I yield back.
    Chairman Kline. Thank the gentleman.
    Mrs. McCarthy?
    Mrs. McCarthy. Thank you, Mr. Chairman.
    And welcome, again, Secretary Duncan. I wanted to talk 
about--I was going to talk about the Pell Grants but I want to 
also say my colleague from Pennsylvania, Mr. Platts, you know, 
he talked about, you know, legislation that he and I have 
worked together to make sure that families are involved, which 
obviously the president has put forward that in his plans and 
speaking for it.
    And Mrs. Biggert talked about, you know, the homeless 
children that we have out on our streets, children with 
disabilities in schools, and, you know, some will say that, 
well, we have other wrap-around programs to help these students 
but the truth of the matter is, as far as homeless children, 
children with disabilities that need that extra help, the 
schools don't have the money for it anymore and they truly 
don't.
    And as far as the wrap-around programs, go to any of my 
food banks, go to any of the community centers--they don't have 
it either anymore because the money has not come down from the 
State, it has not come down from the local communities. People 
donate, they try to raise money, but it is just not there.
    It actually does follow, you know, what we are trying to do 
to make sure our children and our students are being educated 
in the early grades, junior high, and high school so they are 
ready for the Pell Grants. When we see these kind of cuts in 
the Pell Grants over the next 10 years, when we are trying to 
make sure that young people are going to college, have the 
financial means for it--some say the prices have gone up.
    I live in New York. Even our community colleges, which are 
still a buy--you know, it is a good buy--they are still 
expensive.
    And when you look at the cost of living on Long Island and 
in New York, what we pay in taxes and everything else, a small 
amount for Pell Grants for a family that is not even making 
what you should be making on Long Island needs to be protected 
for those students. That is the goal, I thought, of this 
committee and certainly of the president to be able to make 
sure that all students will have an educational opportunity, 
whether it is certainly going to college, whether it is going 
into the trades, or for whatever they choose.
    So I would ask you, and certainly to work with the 
president, and certainly as we go over the Republican budget 
that will be coming out today, or at least going forward with 
it, cutting $86 billion for Pell Grants is going to hurt 
everybody, and I certainly hope that you continue to fight that 
as we go forward on this.
    Secretary Duncan. We will fight that every step of the way. 
And again, I just think as a country we have to educate our way 
to a better economy. We just had another study yesterday saying 
we need 23 million more college graduates than we are 
producing, and if we don't take this seriously these jobs are 
just going to go overseas.
    And one thing I would just like to say to this committee 
that I haven't mentioned yet is that 2 weeks ago we held an 
international summit with 23--in New York--23 high performing 
and rapidly improving countries from around the globe, and if 
anyone thinks these countries are resting on their morals or 
not moving forward educationally it is an unbelievable wakeup 
call. These countries are investing, they are innovating, they 
are committed. And that is the competition. Our children aren't 
competing in your district, or in your State, in the country--
our children are competing with children across the globe and 
other countries are just taking this commitment much more 
seriously than we are.
    My concern is that I think our children are as smart, as 
talented, as creative, as entrepreneurial, as hardworking as 
children anywhere in the world, I just want to level the 
playing field for them. And right now that is not the case.
    Mrs. McCarthy. And we need to do it, because I have about 
46 young people from G.W. that are over here going to G.W. from 
China and they will be here for 6 months, and the question came 
up on education and I said, ``Our competition is you and we are 
going to be ready for you,'' and I hope I can hold up our 
promise up to that.
    Secretary Duncan. You and I both.
    Mrs. McCarthy. Yield back.
    Chairman Kline. Thank the gentlelady.
    Mr. Hanna?
    Mr. Hanna. Thank you.
    And thank you, Mr. Secretary, for being here.
    We all share a common goal of rebuilding the middle class 
and in the past 30 years what we have seen in terms of job 
creation in this country is 98 percent of the jobs have been 
service jobs, about 2 percent have been what are typically 
called tradable jobs--higher value added, up the food chain 
type of jobs. We also know that an increase in those jobs--
those people have those jobs--create in their lifetime about 30 
percent more than everybody else so that we go from a middle 
class that effectively is not paying a great--to a large 
extent, federal and State taxes, to a middle class that 
actually does pay taxes.
    So you stated that you expected a 5 percent GDP growth 
because of some changes in the focus on STEM. Is that correct?
    Secretary Duncan. Yes. Again, it just--the jobs of the 
future, the knowledge that the jobs are going to be for the 
educated workforce.
    Mr. Hanna. Knowing that a 1 percent increase in GDP reduces 
our national debt by about $1 trillion and knowing that we have 
about a 2 percent growth rate now, maybe less--and it doesn't 
look like that is going to change in the near future--what 
would you like to say about STEM in that regard?
    Secretary Duncan. I can't overstate the importance of 
producing so many more young people with a passion and a 
commitment and a desire to work in the STEM areas, and I think 
the STEM pipeline is broken. I think we have far too few 
children who have access to teachers where they are comfortable 
and confident. So this isn't just a higher education problem; 
this starts in third and fourth and fifth grade.
    We are working with an outside nonprofit. It is committed 
to hitting the president's goal of recruiting 100,000 
additional STEM teachers over the next decade. But we have to 
do this and we have to do this with a greater sense of urgency.
    And you can't solve it at the higher education side. We 
have to really fix that pipeline and the only way we do that is 
with more teachers who really love math and science and have a 
passion for that.
    Not everyone agrees with me. We have had a couple-decade 
shortage of math and science teachers.
    I think we can keep admiring the problem or do something 
about it, so I have been very public--I think particularly in 
disadvantaged communities we should pay math and science 
teachers more money. We have to look at the--recognize this 
desperate shortage, and the children can't do it without that 
basic building block. I think technology can be helpful.
    But whatever we can do to dramatically increase the number 
of young people with a passion and a love and an excellence in 
the STEM fields, our country needs that.
    Chairman Kline. Thank the gentleman.
    Mr. Tierney?
    Mr. Tierney. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary. It is good to have you here.
    I just want to touch base on one of the latter comments of 
the previous speaker, not the most recent one, about Pell 
Grants and the increase during this administration. When you 
have an economic situation as we did from 2001 to 2008 where 
millions of jobs are lost it is going to make a lot more 
families eligible for Pell Grant, and I would assume you agree 
with me that the fact that that happened that people got the 
Pell Grants or that their dream didn't end is a good thing. In 
other words, we moved them through the pipeline.
    I don't see any company every making anything from 
disinvesting, and if we are going to need in the future more 
innovators, more teachers, and scientists, and engineers, just 
using the recession as an excuse to shut that valve off and 
hope that somebody is going to make it up on the other end 
doesn't make any sense, does it?
    Secretary Duncan. We have to invest. We have to create more 
opportunity. And we have to make sure many more folks are 
graduating from college than they are today. Pell Grants are a 
huge part of the solution, not a part of the problem.
    Mr. Tierney. I mean, I don't want to beat a dead horse 
because I think we have made the point here but, you know, 
letting the interest rates go from 3.4 percent to 6.8 percent 
moves us in the wrong direction. Eliminating the Pell Grant 
rise, which we have already paid for, moves us in the wrong 
direction. Getting rid of the Income-Based Repayment Program so 
that students graduate with a higher burden on the other end 
moves in the wrong direction. And I was glad to see that your 
budget accounted in the other direction for that, an 
improvement moving forward.
    Let me just ask you about maintenance of effort. I think in 
higher education when we put that into the Recovery Act it made 
a difference, when we put it into the Higher Education 
Opportunity Act it made a difference.
    I am a little concerned that we see some movement afoot 
here to relieve the maintenance of effort to take it out of the 
K-12, and I would like you to speak a little bit to the 
importance of maintaining that if we are going to have true 
partnerships.
    Secretary Duncan. So again, please hold us accountable. We 
think it has made a huge difference out there and I can't tell 
you how many college presidents and others have said thank you 
for that, and if it were not for the MOE we would have been 
decimated more than we were. So, again, we recognize these are 
tough fiscal times; we recognize States have to balance 
budgets. But we don't want folks cutting education 
disproportionately, and we are going to stand our ground there. 
And please hold us accountable there.
    Mr. Tierney. We will. But I appreciate that sentiment on 
that.
    I noticed that the Republican budget cuts about $500 
million on job training funds, and I notice this administration 
has emphasis on doing more with community colleges and 
improving the pipeline for job training. I appreciate your 
comments about the Miller-Hinojosa-Tierney bill in that 
respect.
    Tell us more about the importance of job training as well 
as the college end of things, but for that group that may get 
out of a high school and need a credential short of a college 
degree.
    Secretary Duncan. So two pieces on the sort of the high 
school side--we would like--we are requesting an additional $1 
billion to invest in career academies, so giving young people a 
real sense of skills and what is out there. And if any of you 
have paid an auto mechanic or a plumber lately, they are doing 
pretty well. And those are good-paying jobs, middle class jobs, 
and we need to make sure young people have those options.
    And for me to be clear, it is never college or career. I 
want it to be college and career and let young people decide 
what they want to do--not track them one direction or another, 
but give them options. So we want to invest there.
    And then secondly, on the community college side, we have 
had a great partnership with the Department of Labor and we 
want to continue to build upon that. Again, I just think 
community colleges have been this unrecognized gem along the 
education continuum. It is so important.
    Some of my most inspiring visits are to community colleges 
around the country, and I will tell you--it is stunning if you 
guys haven't done it--there are more and more folks who have 4-
year degrees who are going back to community college to get 
that trade or to get that certification to get a good-paying 
job. And so there is a huge value there.
    My concern is that we literally have some community 
colleges today who are offering classes 24 hours. There is that 
much demand. We have to increase their capacity; we have to 
make sure that they are partnering with the private sector; and 
where there are real public-private partnerships, where that 
training is leading to real jobs in that community, we want to 
invest a lot more.
    Mr. Tierney. Great. Thank you.
    I don't want to get too technical on this, but in the 
fiscal year 2012 omnibus appropriations bill some changes were 
made. One was the elimination of the ability to benefit for 
eligibility for a Pell Grant, and you know, I think, well for 
enrolling students. It was really a pretty innovative idea. So 
if you didn't have a GED or a high school diploma you could 
still get a technical courses along with your adult education 
and the Pell Grant was really funding that aspect of technical 
training. Do you have an answer to how we are going to deal 
with that class of students?
    Secretary Duncan. Yes. It is a tough issue and we are 
struggling with it internally. So we are very aware of it. I 
don't have an easy answer. There are certain things--obviously 
we went from two Pell Grants to one in a year; there have been 
some tough decisions made. But that is a very, very real issue 
that--let me come back to you on, but we are aware of the 
potential downside there.
    Mr. Tierney. Great. Thank you.
    Yield back, Mr. Chair.
    Chairman Kline. I thank the gentleman.
    Dr. Foxx?
    Ms. Foxx. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for being here. I want to start 
out by correcting the record just a little bit on some things 
that have been said today. It is my understanding that it was 
Senator Kennedy and the Senate Democrats who opposed the 
variable rate for student loans in 2005. Republicans 
recommended that and it was the Senate Democrats who stopped 
it.
    I would also like to point out that from 2007 to 2011 the 
Democrats were totally in control of Congress and for 2 of 
those years President Obama was president. And yet, you never 
recommended changing the rate for student loans during the--
those 2 years, and neither did the Democrats who were in 
control of Congress for 4 years make that recommendation. It is 
only since the Republicans have taken control of the House of 
Representatives that you have brought forth that 
recommendation. And the president has created the greatest 
fiscal crisis that this country has ever seen and now suddenly 
you are concerned about the loan rates.
    I would also like to associate myself with the comments of 
Dr. DesJarlais and his concern about talking about access, but 
it seems to me that it is illogical that you all continue to 
talk about access and increasing borrowing for students. You 
know that old definition of insanity that is thrown around that 
it is doing the same thing over and over again and expecting a 
different result, and we have talked about how increasing costs 
have been associated with increasing spending. And so I 
appreciate the fact that you are talking about it is not just 
access, but it seems to me that you all concentrate on throwing 
more money at the problem and assuming that we are going to get 
a different result when we haven't in the past.
    I would also like to commend you and the president for 
discovering community colleges. As someone who discovered them 
a long time ago, I think they have always been neglected and do 
provide tremendous opportunities for us. And it is clear that 
you all have been out in the public a little bit, but in some 
ways the way you talk about things you talk like nothing has 
every happened in education until you guys came along and you 
are making these recommendations on career academies and 
community colleges working with business and industry. That is 
what community colleges have always done is work with business 
and industry to create programs.
    So I just want to say, there had been some things going on 
out there before you guys came on the scene, and it is good to 
highlight those but I don't think the federal government needs 
to pay to spread them around because somebody who is running a 
good community college or a good college is going to pick up on 
those things and going to be doing them.
    I would like to ask you about a situation in the Department 
of Education. It is my understanding that there is a problem 
with borrowers who have done all the necessary work to rehab 
their loans but the department hasn't completed the process for 
them to do that. In fact, we have heard from borrower--pardon 
me--from borrowers about the department failing to follow 
through on your end of the job.
    Can you tell me in a short sentence or two why these folks 
who have--and countless others who have spent time having their 
loans processed--rehabbed--hasn't been processed? Your 
department says it is proud of the way you have managed the 
program, but how have you gotten to the point where the 
department is holding these hard-earned--hardworking people 
back from repairing their credit and getting their loans back 
in order, and when are you going to fix it?
    Secretary Duncan. Obviously, ma'am, we have zero interest 
in doing that, and where we have folks who we need to move more 
rapidly or be more supportive of, we are absolutely committed 
to doing that. So if you have specific, you know, individuals 
who are coming to you I am happy to take those personally and 
work with them.
    Ms. Foxx. Well, I don't think we should be dealing with 
individuals. We need the whole process fixed and we would like 
a written answer from you on that, on when you plan to get it 
fixed.
    Secretary Duncan. Absolutely.
    Ms. Foxx. The other quick question that I have for you is 
you have been talking a lot about affordability but yet you put 
in unnecessary rules and regulations, one size fits all, but 
you hold up good models like Western Governors University as a 
great place to go, but how do you square the fact that the 
administration promotes lower-cost models of higher education 
delivery with the fact that you are making it impossible for 
those innovative models to develop and operate? You are talking 
out of both sides of your mouth.
    Secretary Duncan. I guess we have a difference of opinion 
there. I don't think we are talking out of both sides of our 
mouth at all. We are doing everything we can to encourage and 
to support innovation and are going to continue to do that at 
the higher education side, 4-year institutions, community 
colleges, K-12, and the early childhood space, as well.
    Chairman Kline. The gentlelady's time has expired.
    Mr. Kildee?
    Mr. Kildee. Thank you, Mr. Chairman. I apologize for having 
to go to another committee.
    But let me ask you this, Mr. Secretary: The Republican 
budget would cut over 200,000 children from Head Start and 
would eliminate all mandatory funding for Pell Grants. Many, 
many years ago the Ypsilani school study indicated that Head 
Start actually saved money in remediation for students, for 
incarceration, lessening teenage pregnancy, that these were 
really investments. And these are--they are real numbers to 
indicate that this actually has saved our economy.
    How would these Republican cuts on Head Start and Pell 
Grants affect our economy, which is trying to bring itself back 
now?
    Secretary Duncan. I think we can all probably agree we 
don't need another study demonstrating the tremendous dividends 
of the investment in early childhood education. We know that. 
And the long-term dividends--you know, high school graduation 
rates, college-going rates, less incarceration--I think has 
been demonstrated again and again.
    And so I think we have to invest in high quality early 
childhood education. If we were to have 200,000 children lose 
access to Head Start that is nothing positive about that.
    We were obviously very pleased this past year in Race to 
the Top, for the first time, to invest in high quality early 
childhood education opportunities and we want to commit a piece 
of this year's Race to the Top money to do the same. So we want 
to lead by example and to continue to invest where it is high 
quality in disadvantaged communities, making sure children are 
entering kindergarten ready to learn and ready to read, and any 
step in the opposite direction is one that we are going to 
challenge as hard as we can.
    Mr. Kildee. In Flint, Michigan, I have watched some of the 
Early Head Start. The last thing that Ted Kennedy and I worked 
on together--I was chief sponsor of the bill and he handled the 
bill over there in the Senate--was Early Head Start. And it is 
just marvelous, even the shorter-term study, if you had an 
Early Head Start it indicated that--what a marvelous difference 
this makes in the children's development.
    And I just would wish that they would look at not only the 
moral effect and the social effect, but also the economic 
effect of cuts here. These are not savings. You are really 
making these kids much more expensive to society, and rather 
than contributing to the treasury they will be drawing from the 
treasury with these cuts.
    Secretary Duncan. I think you and I are in absolute 
agreement on this issue.
    Mr. Kildee. Okay. Thank you, Mr. Secretary.
    Chairman Kline. I thank the gentleman.
    Mrs. Roby, you are recognized.
    Mrs. Roby. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for being here today. Appreciate 
your time and your testimony. As you know, this is just a 
vitally important time based on these proposed budgets for us 
to wrap our minds about how to proceed forward.
    And I just want to take a minute to talk a little bit about 
some of the things that you have said throughout the testimony 
today that I find extremely fascinating in that I think there 
is a little bit of a contradiction between words and action, 
because you have said all of the things that we have put into 
action through this committee.
    We need to give States and districts more flexibility in 
how they achieve results. We approve States because--through 
the waiver process because they have made commitments in ways 
that best fit their State and local situations. We look forward 
to supporting States and districts in these efforts.
    And we have passed out of this committee five bills, three 
of which--the last three, the State and Local Funding 
Flexibility Act, the Student Success Act, the Encourage 
Innovation and Effective Teachers Act--all three of those bills 
put into action the words from your testimony today. And so I 
would just say, as a member of this committee and on behalf of 
Alabama, we would appreciate your support and the 
administration's support of putting that into action. We 
wouldn't have a need for a waiver process if, in fact, we could 
get this reauthorization accomplished.
    And then you used, also, in response to my colleague's 
question about how are we--how--give some examples of how the 
federal government is getting out of the way, and you used Race 
to the Top as an example as well, but 46 States applied for 
that. As I understand it, there is $4.5 billion that has been 
divided among only 18 States and the District of Columbia.
    So you take a State like Alabama that jumps through a lot 
of hoops to get the Race to the Top money and was not 
successful in doing so, and all of the millions of dollars that 
have been spent by States to jump through those hoops for the 
federal government, those are precious dollars that could have 
been used in the classroom. I feel like there is some 
contradiction worth noting and it would be my hope that we 
could use those words and our action and get on the same page 
and actually try to accomplish this reauthorization and turning 
this on its head and allowing the States and the local 
governments to apply the control that they need in order to 
educate our children.
    Secretary Duncan. To address those two points, and I don't 
know if there is a contradiction--first of all, States didn't 
spend millions of dollars to apply for Race to the Top; it is 
just not true. What States did do is they worked very hard to 
have a blueprint for reform.
    The challenge we have is that we had many more great 
applications than we had funds available, and whether it is in 
Race to the Top where that was true, the Investment Innovation 
Fund--we funded 49 great applications in the first round and we 
had 1,700 applicants. Promise Neighborhoods, we had--first 
round we funded 20; we had 300 applicants. So there is a 
tremendous interest in--you know, in local communities and 
driving reform. We want to be able to support more of that and 
so that is what we are looking for--increased investment in 
these areas.
    On the early childhood space and Race to the Top, 36, 37 
States applied; we funded eight or nine of them. Would love to 
have gone much further down the list but just simply don't have 
the resources to do that. So I would challenge you to think 
about, are we going to continue to invest in these kinds of 
creative programs or are we going to cut that investment?
    On the reauthorization side I would say--and it is not the 
purpose to be here, but I just want to be very honest, I have 
tremendous, tremendous respect for Chairman Kline, and we may 
not agree on every issue but we actually agree on a lot. I will 
tell you, no one has been more honest with me and worked with a 
greater level of integrity than your chairman here----
    Mrs. Roby. Well, you know, certainly I appreciate all those 
efforts, too. And again, I just--you know, as I sit here and I 
listen to the questions being asked about whether it is a 
specific program or a specific line item in the budget, we all 
need to stay focused on returning this level of control.
    And my time is about to expire so I just want to ask real 
quickly, you know, States like Alabama, we haven't applied for 
the waiver yet, but we have said that, as I understand, they 
are working on a waiver request. And so it won't be one that 
addresses all of the strings that you have attached, but--to 
what you have offered, but it will be one that is tailored to 
the reform efforts in--that the State already has in place and 
is in the process of implementing. And under the law, as--and 
this is my question--as long as Alabama is meeting the 
educational needs of the students shouldn't this waiver be 
granted?
    Secretary Duncan. So again, we are happy to look at the 
waiver. To be clear, we don't have a lot of strings.
    We are saying you have to have high standards--college and 
career ready standards. I think we can agree on that. We are 
saying you have to have meaningful teacher and principal 
evaluation and support. I think we can agree on that. And you 
have to be willing to challenge the status quo and turn around 
low performing schools. So I don't----
    Mrs. Roby. But this is exactly what we are trying to 
accomplish through the legislation that we have offered through 
this committee, and it is the responsibility of Congress to 
reauthorize the act, not the Department of Education to hand 
down more unfunded mandates to the States.
    Secretary Duncan. There are no unfunded mandates here. 
States voluntarily chose to come and they are.
    And let me just finish what I was saying before, 
complimenting the chairman. I also want to compliment--he is 
not here, but--Congressman Miller. And I think you have a 
remarkable education leader there. And my hope is that in a 
bipartisan way, working together, we can find some common 
ground, and that is what hasn't happened yet, and I think that 
is the frustration.
    Mrs. Roby. Well, we appreciate the responsibility that you 
have, and thank you for being here.
    And my time is expired.
    Chairman Kline. I thank the gentlelady.
    Ms. Woolsey?
    Ms. Woolsey. Thank you very much.
    Thank you, Secretary Duncan. You set a very high standard 
for anybody else that is a cabinet member in this country of 
ours forever more. You know your stuff. Thank you.
    I have a story. When we first introduced and started 
talking about No Child Left Behind I went to the then chairman, 
George Miller, and said, ``George, this is great but, you know, 
I represent Marin and Sonoma Counties, in California, and of 
course, my school districts are so amazing that they take care 
of all the kids, you know? There are no kids left behind and, 
you know, I mean, you know look what our scores are, you know, 
year after year.''
    And he virtually patted me on the head and he said, ``I 
know you believe this, Lynn, but you are wrong.'' So I called 
my two superintendents of the two counties and after they got 
through the fear that I was going to use them as an example--a 
bad example around the country--they told me point blank that 
English learners, poor kids, and minorities were not at the 
same level as the majority of our kids in my very elite 
district, okay? So I felt like such an elitist.
    So we have done good things, and if it was happening in 
that area I know--I am for sure it was everywhere. How are we 
going--my question to you is, how are we going to ensure that 
we don't slip back now, that these schools that have raised the 
bar for the kids that were falling behind--what is your method 
for doing that?
    Secretary Duncan. So no one simple thing, but again, I 
think the fact that so many States are actually talking about 
and including more of these children who, again, were invisible 
under No Child Left Behind in their accountability, that is a 
story that hasn't been told and folks don't sort of fully 
understand that yet. And so saying they exist, saying we care 
about them, saying we are going to be held accountable for the 
results, and then providing the range of opportunities they 
desperately need, so whether it is the chance to take algebra 
in eighth grade, whether it is a chance to go to class--go to a 
high school that offers A.P. classes. You may have seen--we put 
out a massive amount of data through the Civil Rights Data 
Collection process and the inequality of opportunity for so 
many disadvantaged children is really staggering----
    Ms. Woolsey. So are you going to measure this? I mean, are 
we--I mean, if----
    Secretary Duncan. So I think we can better measure it, but 
measuring it is a step in the right direction, it doesn't solve 
the problem. The question for me is what are we doing 
proactively to help these children be successful? And for me it 
starts with great early childhood education, it goes to having 
great teachers and great afterschool and wraparound services in 
the elementary levels, it means going to a high school that has 
a college-going culture.
    Ms. Woolsey. Well, you are the perfect straight man because 
I want to talk about wrap-around services. Thank you very much.
    You know I am an advocate of wrap-around services and I 
think it is so important that we provide that support to 
schools and families and districts. And I know that we have 
consolidated those funds with other support funds. I fear that 
wrap-around services won't get the attention that they need, so 
how--is there a way that we are promoting wrap-around services? 
Are we letting school districts know----
    Secretary Duncan. No, it is something we are absolutely 
committed to, so we will--again, hold us accountable. I don't 
share that fear, actually.
    Ms. Woolsey. You don't?
    Secretary Duncan. And it is interesting, not just in that 
funding stream, but again, going to the School Improvement 
Grants, those $4 billion to the lowest performing schools, a 
very significant percent of those dollars--and we can try and 
get you a number--are going to counselors, social workers, 
afterschool programs, Saturday school, summer stuff. So it is 
not just one pot of money but it has been a huge push in this 
direction.
    And then the final thing I will say is it is not just our 
funding; it is how we become more creative. So I have talked a 
lot about--I don't think we need to build a lot more Boys and 
Girls Clubs and YMCAs. I think we should be bringing those 
partners into our schools, get them out of the bricks and 
mortar business. All of us are struggling financially. Put all 
of their scarce resources into tutoring, and mentoring, and 
after school and enrichment programs.
    In every single neighborhood in our country--rich, poor, 
black, white, Latino, doesn't matter--we have schools. Schools 
have classrooms; they have libraries; many have computer labs; 
they have gyms; some have pools. They don't belong to me, or 
you, or to the principal, or to the union. They belong to the 
community. And having our schools open much longer hours with a 
whole host of activities and nonprofit partners and social 
service agencies--we are going to keep funding, we are going to 
do it, but we need to sort of create this climate where our 
schools become anchors of the neighborhood, community centers, 
not islands.
    Ms. Woolsey. Well, I look forward to supporting you in that 
regard. And one of the reasons I didn't think my district was 
lagging is right before No Child Left Behind one of our poorest 
school districts actually had coordinated services at their 
school site and they had stepped up to that already.
    Thank you.
    Chairman Kline. The gentlelady's time has expired.
    Mr. Kelly?
    Mr. Kelly. Thank you, Mr. Chairman.
    Mr. Secretary, good to see you again. I noticed in your 
opening statement--and this seems to be the recurring theme 
lately--is about fair. I keep hearing about, we just want 
everybody to have a fair shot, we want everybody to have a fair 
opportunity, we want everybody to have what is fair. And the 
American people have always been about what is fair. And I hear 
that all the time.
    And then I hear about, ``Well, the Ryan budget is unfair 
because it is going to place on the back of the middle class or 
the underprivileged a greater burden.'' And I know that when 
you look up fair it can mean a lot of different things. It 
could you say you have fair skies out there, you know, fair 
statements.
    But would it be a fair statement to say that the United 
States spends more money per capita at the federal level, the 
State level, the local level than any other country in the 
world on education?
    Secretary Duncan. It spends more than most. I don't know if 
it spends more than all. So I am not quite sure if that is a 
fair statement.
    I think the real question you are asking, which is a fair 
question, is are we getting the biggest bang for our resources 
now? And I think the answer is no and we have to invest 
smarter.
    Mr. Kelly. Okay. Okay. And it is probably a pretty fair 
statement also to say that just by throwing money at a problem 
that is not going to solve it?
    Secretary Duncan. Absolutely.
    Mr. Kelly. Okay. So the amounts of what we have been 
spending or what we are going to continue to spend in the 
future, while we may disagree in substance as to it would be 
more fair to give more in this program than in another program, 
it--underlying fairness is to the American taxpayer and return 
on their investment. They are not getting a very fair return on 
the investment that they are making in education.
    And I say that not just from a personal standpoint, but if 
you look at it and say, my gosh, we keep spending money and we 
are increasing the amount of money that we are spending, and 
then we are saying, well, but it is--this is going to be okay 
because it is going to be fair. But in anything I have ever 
looked at there is a measurement. You look at the metrics.
    And I think NAEP says that since 1970 it has been fairly 
flat--our students' progress. Maybe in the fourth grade we have 
seen some uptick in some disadvantaged groups, but since 1970. 
And if I go forward, you know, 1980, 1990, 2000, 2010, so 40 
years we have spent a fairly large amount of money trying to 
make the system fairer for everybody.
    The only people that I have seen losing in this are the 
hardworking American taxpayers who continue to make an 
investment and that are told, ``Look, you know what, if we 
could just put a little more money in this program it is going 
to become more fair for folks.'' And I will tell you what, I 
have only been here a year but there is something wrong with a 
country that continues to spend more than it takes in, 
continues to think that if I could just throw a little more 
money at this it will take care of it.
    Because the fair assessment would be that we have had a 
failing look for the last 40 years. A lot of the things that we 
have done now--is it fair to grant waivers to certain school 
districts, because maybe they don't have the same metrics as 
other school districts? Yes, well that is fair. That is fair.
    So I know you are working hard at it. I look at the Pell 
Grants and we say, boy, that certainly isn't the way it 
initially was thought out but it just seemed that we needed to 
make it a little more fair. And at the end of the day--the end 
of the day if it is really about being fair it is are we truly 
being fair to the people that we represent back home? They 
don't have to be Republicans, or Democrats, or Libertarians, 
or, quite frankly, a lot of folks that just wish that there 
were no government at all anymore because in their life it is 
not a fair playing field.
    So if you can, tell me what are you doing to make it a 
little more fair? And I know that is a very big question, may 
take more than a couple minutes to answer. But I have got to 
tell you, from a guy who sells cars for a living and you have 
to make it a fair profit audit, and the payment has to be fair 
to the person buying it, I have just got a feeling we are 
selling people a car that is really not going to perform at the 
level they expect and their payment keeps going up on it, and, 
by the way, the number of months that they are making payments 
on it has increased from 36 to 48 to 60 to 72 and it is going 
off the charts. There is just no way I see this thing getting 
reigned in unless we really do become a nation that looks at 
what we are doing.
    Secretary Duncan. So I don't know if I can answer all that 
in a minute----
    Mr. Kelly. You have 15 seconds though. I know that is not 
fair.
    Secretary Duncan [continuing]. But I will do my best to do 
it succinctly. First of all, hopefully you see us not just 
perpetuating the status quo but really trying to push 
transformational change.
    Mr. Kelly. It is not so much me; it is NAEP. I mean, they 
have been tracking these things for a long time, so----
    Secretary Duncan. No, I am saying our investments are not 
just putting good money after bad; we are trying to push 
transformational change on the early childhood side, on K-12 
reform, and higher education, as well. So we recognize that 
historically we are just not getting to where we need to go if 
we keep doing the same things.
    I will also say, I talked about the international summit, 
where we tried to really listen and learn from these high 
performing countries. Let me tell you some things they are 
doing differently that I think we could learn here.
    First of all, they have a very high bar to entry for the 
teaching profession. They compensate their teachers in very 
different ways; they reward them in very different ways, very 
different career ladders.
    We can do all this. It is not rocket science. It takes some 
courage to do some things differently.
    The other thing they do, they do a much better job of 
closing gaps, so the disproportionately invest in the most 
disadvantaged communities. And the wide gaps we have in 
achievement in our country that I think are just morally 
unacceptable, they don't have those in other countries because 
they disproportionately get the most resources and the best 
talent to the children and the communities who need them.
    So I just challenge all of us to think about can we 
incorporate some of those lessons from those countries today 
that are, frankly, out-educating us?
    Chairman Kline. Gentleman's time has expired.
    In the interest to be fair, Mr. Bishop?
    Mr. Bishop. I am touched, Mr. Chairman. Thank you.
    Mr. Secretary, thank you very much for being here. And I 
want to talk a little bit about this issue of throwing money at 
a problem. And I have heard it presented in the context of the 
Pell Grant. I mean, I think we all know that the principal 
reason that the Pell Grant has grown, we have 25 million people 
in this country who are either unemployed or underemployed. 
That has a significant impact on increasing Pell Grant 
eligibility.
    We also know that we have a long-term--at least for the 
last 40 years in this country--that higher education 
enrollments are counter-cyclical. When the economy is down 
people go back to school. They try to retool, they try to get 
skills that will let them go forward.
    So I don't know that it is--we should be talking about this 
as throwing money at a problem. I think we should be talking 
about this as investing in our future.
    We have created a program in this country on a vast 
bipartisan basis called the G.I. bill for the 21st century. We 
are now spending, I think, $25 billion to $30 billion a year to 
help returning Afghanistan and Iraqi vets get their slice of 
the American dream. Is that throwing money at a problem or is 
that investing in their futures?
    I think we really should be commending the kind of 
investment this country is making in access to higher 
education.
    Let me also, on the issue of college costs, we hear an 
awful lot about how increases in student financial aid 
availability drive college costs. There is no evidence to 
substantiate that, just for the record. There is none.
    We had a hearing in our subcommittee--November 30th--we had 
testimony from a great many people and I asked the question, is 
there any evidence that suggests that increased college costs 
are driven by increases in Pell Grant or campus-based--all the 
witnesses said absolutely none.
    So I hope we can set aside that canard that this is what is 
driving college costs, although we will get a chance to see. If 
the Pell Grant is cut by $94 billion over the next 10 years, if 
campus-based programs are cut, if the theory is right we should 
see college costs drop precipitously. We will get a chance to 
see. I hope we don't get that chance, but we will.
    Let me, Mr. Secretary--on the issue of--the president said 
in his State of the Union speech that he wanted to begin a 
process of tying campus-based aid to efforts on the part of 
schools to drive affordability and to contain costs. I know 
this is an issue that the department is working on, but I am 
really worried about how we are going to create a matrix that 
would allow us to measure it. So could you talk to us about 
what the department is doing to try to measure it, relative to 
price and increases?
    Secretary Duncan. And you are absolute pro in this area, so 
I would love your thoughtful advice, as you have been so 
helpful in the past. I think that the basic problem we are 
trying to solve for, which I think we can agree is, we have 
done a lot to increase access, which is hugely important, but 
there are two other pieces. One is these escalating costs; the 
second, like you come back to, is completion, attainment. And 
so putting in place incentives not just to get students in the 
front door but to get them graduated and walk across the stage 
at the back end, and doing it at a reasonable cost, I don't 
think we have had enough incentives there.
    So how we measure--we can sort of walk through how we are 
thinking about, but those are the two things where I think our 
resources, our incentives haven't moved behavior the right 
direction, and we are trying to challenge that status quo.
    Mr. Bishop. Okay. Let me urge you, as you think about this, 
to consider in your equation the extent to which schools 
discount tuition.
    Secretary Duncan. Yes.
    Mr. Bishop. The average discount rate for private colleges 
in the State of New York is approaching 40 percent. They are 
making an enormous effort to use their own resources to enhance 
affordability.
    So we should be looking at gross price, we should be 
looking at net price, but we also should be looking at how 
institutions are, in effect, sacrificing to drive down gross 
price and drive down net price.
    One last question--I am running out of time: We are now 2 
years into the transition from FFEL lending to Direct Lending. 
When we made that transition we heard near-apocalyptic 
predictions of how awful this would be for colleges that were 
FFEL lenders, students who were FFEL borrowers. Could you tell 
us where we are 2 years in?
    Secretary Duncan. Well, I never want to jinx us, but you 
have heard a deafening silence, and that silence has been 
because this transition has gone extraordinarily smoothly. And 
I want to commend the universities for their hard work and I 
want to commend our team at FSA that did, I think, a yeoman's 
job of reaching out to many, many different universities who 
were very reluctant and worried about this transition.
    And the fact that we were able to do it and you have not 
seen a huge blowup or huge crisis, the fact that those scarce 
resources are now increasing access on the Pell Grant side----
    Mr. Bishop. So the savings that we anticipated are being 
realized and are being put into the Pell Grants?
    Secretary Duncan. That is the only reason we have been able 
to increase Pell Grants the way we have.
    Mr. Bishop. Thank you very much, Mr. Secretary.
    I yield back.
    Chairman Kline. I thank the gentleman.
    Mr. Rokita?
    Mr. Rokita. Thank you, Mr. Chairman.
    And thank you, Mr. Secretary. It is good to see you again.
    I want to direct your attention to this chart that I have 
put up. It discusses how much we have been spending on 
education as a federal government versus the results. And I 
have heard already just recently that we should be commending 
that investment, and I have heard terms like we are throwing 
money at it, and I heard you say that we need to level the 
playing field relative to other countries.
    So when you look at this chart and you see the blue line, 
which represents our spending since the installment of American 
socialism known as the Great Society took place, a chapter that 
birthed your agency, as a matter of fact, and then you see the 
other lines. You see an orange line, a green line, and a gray--
maybe a purple line. And those lines that are flat lined 
represent our reading scores since we started making federal 
investments in education, it represents our math scores, and it 
represents our science scores.
    Now, we were just told that we should commend the 
investment. What part of that investment should we commend?
    Secretary Duncan. So, I think we all agree we have a long 
way to go and need to invest differently----
    Mr. Rokita. Well, hold on. Let me stop you right there. 
This has been going on--and that is just what the chart picks 
up--since 1970. It is now 2012.
    Secretary Duncan. I am very familiar with the data. And to 
be clear, what the Cato measured--this is a Cato report--they 
looked at 12th grade results, and as we know, the 
disproportionate amount of the federal investment is actually 
on the elementary side, so if you look at the elementary 
results, fourth grade, it would be better.
    But I think where we might agree is that we have a long way 
to go educationally and what we are doing to date isn't good 
enough to keep great jobs in this country going forward.
    Mr. Rokita. Yes, you know, and this is not personal to you. 
It is not even personal to your agency. I would say this--and I 
do say this to the military generals who come and ask for money 
to be thrown at something thinking that it is going to make 
something better or stronger. And just about every other agency 
head that I have found have that same kind of attitude.
    And I used to run an agency. I used to run four of them. 
And, you know, we ran them on 1987 dollars, unadjusted for 
inflation. The number of personnel we had was never more than 
they had in 1982. And you can look through the press clips, you 
can look at anything about my agencies and you can't say that 
we gave bad service or that we were subordinate in any way.
    So this mantra and this really--which is below you, I know, 
that says, ``Just give us more money because we can make things 
better,'' doesn't work anymore and----
    Go ahead.
    Secretary Duncan. So hopefully in nothing that I have said 
did you hear me say just give me more money because you had 
better hope----
    Mr. Rokita. Well, let me go--yes, let me ask about that.
    Secretary Duncan. If I could just finish, hopefully----
    Mr. Rokita. I think you did say that. Your budget request 
touts consolidation of 38 programs into 11, but 22 of those 38 
programs didn't even receive funding last year so your budget 
actually consolidate 16 programs into 11, but of those 11 you 
are asking for a funding increase, if I understand it right.
    Secretary Duncan. I don't know if your math is quite right, 
but my point is what we are looking for is not investment in 
the status quo but in a very different vision of reform. And 
hopefully you have seen that at every level--early childhood, 
K-12 reform, and higher education.
    So the big increase we are asking for--we are asking for, 
to be very clear, $1.7 billion increase. I make no apologies 
for that. The lion's share of that is to try and create some 
incentives on the higher education side to get States to invest 
and to get universities to keep down tuition and graduate more 
folks.
    And if we think if we can change that behavior then the 
investments we are making in Pell Grants, and Perkins, and 
other things will be much more beneficial, much better 
leveraged----
    Mr. Rokita. And may be realized in another 40 years, which 
is somewhat the nature of education. You have got to----
    Secretary Duncan. I don't have 40 years. I have a huge 
sense of urgency. Right now we have a dropout rate that is far 
too high; we have a graduation rate that is far too low; and 
far too many of our high school graduates aren't college and 
career ready----
    Mr. Rokita. Let me ask you about some metrics that I used 
to use and that you can really focus on and hone in on. With 
consolidation of those programs, how many fewer employees are 
you going to have to hire? How can you physically reduce the 
footprint?
    Secretary Duncan. I will check that and get back to you. 
Our spending on our employees and our costs are actually very, 
very low.
    Mr. Rokita. But how many fewer employees will you need? If 
you are consolidating programs then it follows that you 
shouldn't need as many employees. You should at least not have 
to rehire, you know, through attrition, some of those folks.
    Is there anything you are doing in your budget, in your 
plan that reduces the federal role in education?
    Secretary Duncan. And again, we have had this question a 
couple times and I would argue very strongly that the Race to 
the Top program was an empowerment of States and them putting 
forward their plans that they adopted and giving them room to 
implement and support those plans. The waiver package 
unequivocally is reducing the federal role and empowering 
local----
    Mr. Rokita. And real quick, what metrics will you use to 
measure that diminished role?
    Secretary Duncan. Every single--well, you can measure--what 
we are really measuring is the impact on student achievement. 
That is what I am interested in measuring. Are these plans 
helping more students be successful? That is how we want to be 
held accountable. And are we leading the world----
    Mr. Rokita. So no metrics to measure the--I understand your 
point, but no metrics----
    Chairman Kline. Gentleman's time has expired.
    Mr. Rokita. Thank you.
    Chairman Kline. Mr. Scott?
    Mr. Scott. Thank you, Mr. Chairman.
    And thank you, Mr. Secretary, for being with us today. Can 
you tell us what your budget does to reduce the achievement 
gap? And, following up to the last question, what your budget 
does to reduce the dropout rate, which would be highly 
correlated?
    Secretary Duncan. So obviously, virtually every investment 
we make, whether it is in Title I students, whether it is in 
students with special needs, whether it is in better 
professional development for teachers, whether it is in turning 
around low performing schools, whether it is supporting the 
great work of States to raise standards--all of that is to 
reduce the insidious achievement gap in this country and to see 
many more of our young people not just graduate from high 
school but go on to college.
    Mr. Scott. Well, does the budget increase your ability to 
address that problem or reduce your ability to address the 
problem?
    Secretary Duncan. Does our budget?
    Mr. Scott. The budget, right.
    Secretary Duncan. Our budget, we are convinced, would 
increase our ability to reduce those achievement gaps and have 
many more young people be academically successful.
    Mr. Scott. You mentioned Promise Neighborhoods that you 
would be able to fund 20 out of 300. How much money did you 
spend on addressing the 20 and how much would you need to fund 
the really truly worthy projects?
    Secretary Duncan. Yes. So we are asking for an increase in 
Promise Neighborhood funding, and we have had, again, 
extraordinary applications come in, but I promise you if we are 
fortunate enough to get the increase that we are requesting we 
will still have many more good applicants than dollars 
available.
    Mr. Scott. When will studies be available to show the 
benefits of Promise Neighborhoods?
    Secretary Duncan. Every single year we are going to put out 
data on progress.
    Mr. Scott. What needs to be done to bring afterschool 
programs into the schools? You mentioned Boys and Girls Clubs.
    Secretary Duncan. We need to continue to fund and we need 
to encourage schools and school districts as well as nonprofits 
to partner in more innovative ways.
    Mr. Scott. What can we do on a federal level to bring that 
about?
    Secretary Duncan. I think we can continue to encourage it 
and to shine a spotlight on best practices, and I have been to 
many places that have extraordinary programs, with schools open 
12, 13, 14 hours a day, and sort of hope those good ideas get 
promulgated.
    Mr. Scott. In funding these programs does the budget allow 
funding of program sponsors who wish to discriminate in 
employment with federal funds? That is, if a sponsor decides 
that they don't want to hire Catholics and Jews does your 
budget allow funding for those programs?
    Secretary Duncan. I certainly hope not.
    Mr. Scott. Do the TRiO programs--what is the amount of 
money on TRIO programs and are you dealing with the issue of 
late notifications for Upward Bound programs?
    Secretary Duncan. On TRiO specifically, it is about $840 
million request, and if there is any backlog or any issues 
there we are happy to look to address them as quickly as we 
can.
    Mr. Scott. The McNair Post-Baccalaureate Achievement 
Program, which is one of the few postgraduate programs for low-
income and first generation students obtaining doctorate 
degrees--what does your budget do to the McNair Post-
Baccalaureate Achievement Program?
    Secretary Duncan. I need to check that and come back to 
you.
    Mr. Scott. Historically black colleges and universities and 
other minority serving institutions, what does your budget do 
in support of those?
    Secretary Duncan. We are continuing to invest very, very 
heavily there, and it is very important to me that those 
institutions not just survive but thrive, and I actually met 
with a number of leaders from that community yesterday, and as 
we think about so many different ways of closing achievement 
gaps and having more minority teachers come into the public 
education we think HBCUs and MSIs have a huge role to play 
there.
    One thing we are asking for, just very specifically there, 
is additional $30 million for the Hawkins Centers of Excellence 
to really strengthen teacher prep, and again, bring that 
pipeline of talent to make sure that our teacher workforce 
reflects the tremendous diversity of our nation's young people.
    Mr. Scott. And what does your budget do for early childhood 
education, and Head Start, specifically?
    Secretary Duncan. So obviously significant amount of that 
funding comes from HHS, but we funded $500 million for a Race 
to the Top for early childhood education this past year, and 
this year in Race to the Top we want to continue to fund States 
that are doing some really creative things, and we are in this 
for the long haul.
    Mr. Scott. What is the benefit of early childhood 
education?
    Secretary Duncan. It is immeasurable. It is extraordinarily 
beneficial.
    Mr. Scott. And finally, on Pell Grants, could you tell us 
what your budget does in support of Pell Grants?
    Secretary Duncan. So we want to continue to, you know, 
maintain the maximum, and we want to make sure that young 
people have access to Pell Grants. And we are concerned that we 
have, you know, budgets being considered that would 
significantly reduce access to Pell Grants. That, to me, does 
not lead the country where we need to go.
    Mr. Scott. Thank you, Mr. Chairman.
    Chairman Kline. Thank the gentleman.
    Mr. Thompson?
    Mr. Thompson. Thank you, Chairman.
    Mr. Secretary, good to see you. Thanks for being here.
    I want to try to--well, I want to take about--both areas of 
jurisdiction of this committee and kind of bridge them--
obviously education and workforce, because they are 
interchangeable. I mean, they are so well connected, as it 
should be.
    And as you know, today we have, as we sit here, somewhat 
less--just fewer than the population of Pennsylvania is 
unemployed--roughly 14 million Americans. So there are a lot of 
folks sitting at home worried about how to make ends meet.
    And at the same time, when I go around and I visit 
employers, even when I talk with employers outside my district, 
I find that they are--most employers are sitting with really 
good jobs that are sitting open. There is such a disconnect.
    Now, there are probably a number of reasons for that, but 
one of the things I think is significant, and I call it the 
skills gap, where people do not--they are not qualified and 
trained to take these positions. And to me, I know the big 
thing when we talk about jobs today it is unemployment. I think 
the crisis that is looming on the horizon is where we start to 
lose business and industries overseas because they can't find 
the people to do the work. And it is going to be compounded, 
obviously, by the baby boomer generation with those retirements 
that are happening in scores.
    And so it is about a qualified and trained workforce, and I 
truly believe that our career and technical education training 
is a very cost-effective way to get people those skills. And in 
fact, for some folks who are investing 4 years of tuition it is 
a--and graduating, unfortunately, with a large debt that--we 
have talked about that--that this is a way to give greater 
options for kids.
    And so the administration's--the president's budget 
includes $1 billion over 3 years for career academy programs 
and $8 billion for community college and business partnerships. 
These new programs really appear to come at the expense of 
programs like the Perkins Career and Technical Education Act.
    You know, my concern is that the president's budget 
proposal is trying to reinvent the wheel at the expense of 
proven and critically needed Perkins programs. And so, you 
know, I believe a good indicator of future performance is past 
performance, in terms of meeting these workforce needs and 
delivering education, and providing great pathways to success 
for folks, and during a tight fiscal environment how can we 
ensure that the foundation for proven programs like Perkins 
remains strong when it seems like--and I understand every 
administration wants to put their name on something that 
appears to be new, but sometimes I really do believe that comes 
at a cost of sacrificing that which is proven and works.
    Secretary Duncan. No, it is a great question. I would just 
start where you started. I think this skills gap which you 
talked about is just a massive challenge for us in education 
and the business community to come together behind. And as you 
know so well, in this tough economic time we have, we think, at 
least 2 million high-wage, high-skill jobs that we are not 
filling. I can't tell you how many CEOs I have met with and the 
president has met with who say, ``We are trying to hire today 
and we can't find employees with the skills we need.'' So I 
take that very personally and very seriously, and that is a 
huge part of our challenge going forward.
    We are very supportive of the Perkins program. We think 
some results are very good, some of the results are mixed, 
frankly, and really making sure there is accountability there, 
that that training is leading to real skills that lead to real 
jobs. Some places, you know, fantastic job; other places, 
frankly, disconnected, training folks for jobs that were 
available 30 years ago.
    And so what we want to do is just enhance those efforts 
both on the K-12 side--you know, high school and middle 
school--but also on the community college side where there are 
real ties to the private sector, where the training at high 
school and where the training at community colleges is leading 
to real jobs in that community. We want to put a lot more 
resources behind that. The sole reason here, the sole driver is 
to reduce that skills gap and to increase the opportunities.
    Mr. Thompson. Well, the Student Success Act, which has been 
mentioned here numerous times, a piece of legislation that 
passed out of this committee, actually we put language in there 
to do just the things that you are talking about, to encourage 
our school districts to work with local business, local 
industry, to prepare kids--because there is a significant 
portion of kids that aren't going to even go on to a--let alone 
a 4-year schools, a 2-year technical training or certificate 
program; they are going to go right into the workforce. And I 
think the language that we put in the Student Success Act will 
go a long way towards making sure that these kids are ready on 
day one after graduation to join that workforce and really be 
there for a great job to be able to meet a need and a great 
pathway to success.
    Secretary Duncan. The more we can work together on these 
issues, again, I just feel this is one we have to break through 
as fast as we can and do it together. So thank you for your 
leadership on it.
    Mr. Thompson. Thanks, Mr. Secretary.
    Mr. Chairman, I yield back.
    Chairman Kline. I thank the gentleman.
    Mr. Holt?
    Mr. Holt. Thank you, Mr. Chairman.
    Mr. Secretary, good to see you. You are a fine witness and 
I appreciate your creative and imaginative and positive 
programs and your national presentation to the public on 
educational matters.
    There are lots of things we could talk about--arts in 
education, libraries, special education, and IDEA. But let me 
focus on the professional development of teachers in math and 
science, and then if time allows I would like to get to the 
Foreign Language Education Program that you would zero out and 
leave us in a situation where the Chinese government is 
spending more money in this country on foreign languages than 
you are--we are.
    But science education--the proposed budget proposes the 
consolidation of the Math and Science Partnerships Program, 
again, and the budget request of $150 million is--this is for 
the entire block of consolidated programs--is less than was 
provided for math and science partnerships in 2004 and about a 
third of what used to be in this under the Eisenhower Grants of 
some years ago.
    Now, I understand you are under pressure to make sensible 
cuts, but this is slashing and it is not good enough to say, 
``Well, we are doing better than the Ryan, Romney, Santorum, 
Gingrich, Paul budgets would do,'' that wouldn't take us back 
to 2004, they would take us back to 1994 or 1904, or whatever. 
So, you know, how can you do that?
    And let me go on along these lines: The Higher Education 
Opportunity Act included a provision--a really quite 
inexpensive provision to provide a database on STEM education 
programs, assistance for people to study college graduate 
science, technology, engineering, and teaching in those areas, 
as well. It has never been funded. This is really minor and it 
would really help--it would have a major impact.
    And furthermore, TEACH Grants. How can we make the TEACH 
Grants more attractive for prospective teachers in science and 
math?
    Secretary Duncan. So a lot there, and I think, obviously, 
your advocacy and leadership on STEM is so huge and important. 
We actually have multiple pots of money that are funding the 
STEM areas----
    Mr. Holt. Let me just jump in there. The principle funding 
for teacher professional development has been the Math and 
Science Partnerships, and so that principal program has not 
been made up with bits and pieces of other programs.
    Secretary Duncan. Right. Right. So we have, as you said, 
$150 million for the effective teaching and learning STEM. I 
would say that the $2.4 billion we spend on teacher 
professional development is often poorly spent and we need to 
look there, but so much of what is going on with Race to the 
Top grants, with i3 winners are in the STEM areas and we have 
made that a competitive priority. And so we are going to 
continue invest very significantly there.
    And then finally, obviously we are pushing very hard to 
recruit 100,000 new STEM teachers to come in and have some 
really interesting public-private partnerships and are moving 
that direction.
    Mr. Holt. Well, you could recruit them better if you made 
the TEACH program really work----
    Secretary Duncan. Oh, sorry. And the TEACH----
    Mr. Holt [continuing]. If you helped with the database to 
help people understand what financial assistance is available 
for them to study in the STEM areas--both relatively 
inexpensive programs, considering the impact that they would 
have.
    Secretary Duncan. Your point on the TEACH Grants is 
actually a really important one. I think too many folks who got 
the TEACH Grants actually didn't either go into teaching or 
stay in teaching and how we better target that for folks who 
are in it for the long haul, how we do it maybe a little bit 
later in their college career where they are more committed. 
Obviously if they don't go in those grants become loans, and it 
really puts them in a bad position. And if we emphasize more 
folks with that commitment in the STEM areas to go work in 
disadvantaged communities I think those dollars can be targeted 
in a much more strategic way.
    Mr. Holt. Yes. Let me just press you a little bit more on 
the teacher professional development. I mean, you have said 
science education is central to our effort to restore American 
leadership in education worldwide. It doesn't look to me like 
when you consolidate the single most important program about 
professional development in math and science with a bunch of 
other programs and then reduce the amount to, you know, less 
than a third of what it was under the Eisenhower Grants or 
below what it was 8 years ago for the Math and Science 
Partnerships alone, that you really are saying, ``This is 
central.''
    Secretary Duncan. Right. So again, let me just sort of walk 
you through. There is a fair debate or fair critique, but just 
to walk you through, $150 million for the effective teaching 
and learning in STEM, $30 million for the Fund for the 
Improvement of Education in the K-12 math innovation space, $80 
million for the set aside for effective teachers and leaders in 
State grants to support STEM teacher and leader preparation, 
and $190 million for the Presidential Teaching Fellows program 
in the STEM areas.
    So there are multiple ways that we are trying to get at 
this, but I think your basic point of how critical this is to 
the country, we absolutely agree, and again, welcome that 
continued conversation of how we get there together.
    Mr. Holt. Thank you.
    Chairman Kline. Gentleman's time is expired.
    Mr. Secretary, as you can tell, we are nearing that point 
in the hearing where we are going to make a few brief closing 
remarks. I want to thank you. Before I yield to my colleague, 
Mr. Kildee, I want to thank you for your attendance here today, 
for your really in-depth knowledge and your sharing that with 
us.
    We all benefit from your presence here and I know that your 
staff has put a lot of time into preparing that enormous 
notebook there in front of you. I think it was time well spent.
    Mr. Kildee, any closing remarks?
    Mr. Kildee. Thank you, Mr. Chairman.
    Mr. Secretary, I have spent 36 years on this committee and 
36 years in Congress, and this is going to be my last year, and 
I really appreciate your leadership in education. I helped 
establish the Department of Education--I was one of the 
cosponsors of the bill so I have known every secretary, and you 
are just incredibly good and I deeply appreciate what you have 
done.
    You have really helped bring parties together--the Big 
Eight concept. I really enjoyed those meetings and I think they 
have some permanent effect among--I have always liked John but 
I like him even more after having those meetings. And we got to 
know each other better and realize that we all wanted the top-
class educational system.
    And you helped us really begin to realize that we could 
respect one another, work together, have some differences and 
try to work those differences out. We still have a long ways to 
go but I think you have really planted the seeds very well. 
Hopefully we will bear fruit.
    Mr. Secretary, I deeply appreciate your knowledge, your 
depth of knowledge, you leadership in education, and I deeply 
appreciate your passion for education, and I thank you for it.
    Secretary Duncan. Thank you for your service.
    Chairman Kline. I thank the gentleman for his closing 
remarks, for his kind remarks about me. In fact, a couple of 
people have said nice things about me and I have got to go 
wonder what I am doing here.
    Thank you, Dale.
    Just a couple of closing remarks here sort of wrapping up 
the discussion. It is apparent that there is some remorse and 
some angst being expressed over the fact that the Pelosi 
Congress put into law--put into law a doubling of the student 
interest rates from 3.4 to 6.8 this year and then wonder why 
budgets reflect that law as we try to grapple with that 
challenge.
    Mr. Secretary, I want to take my closing remarks to 
reemphasize how important I think it is that we go right at 
that IDEA funding. I appreciate your comments and I agree with 
my colleague that you have a great depth of knowledge and a 
great passion to reaching the goal of improving education for 
our children, but right now immediately in the near term every 
school in America would benefit by increasing that funding, 
which was a commitment by the federal government decades ago.
    And so we will continue work here despite the sort of 
across the board rhetoric that we heard up here and, frankly, 
that we heard from you about what the House budget is going to 
do. We will set those priorities when it comes down to how we 
spend money, and I am going to continue to work and I hope in a 
bipartisan way with my colleagues to make sure that we are 
increasing funding for IDEA and not cutting it.
    And then one final point, there was some discussion about 
the Direct Lending program and I think you indicated that it 
was working very well and you hadn't heard any complaints, and 
yet we heard some discussion about rehabilitation of loans. 
There may be some issues there. I and others have signed a 
letter to the GAO to ask them to look into that.
    And we have been hearing some murmurings that there may be 
some difficulties with the Web site. We will continue to be in 
dialogue with you to make sure that our students are getting 
what they need out of this.
    So again, I want to thank you for your attendance here 
today. I thought it was an excellent hearing and again, I 
commend your staff for excellent preparation. I don't even know 
if you needed any more with your depth of knowledge. But thank 
you very much.
    There being no further business, committee stands 
adjourned.
    [Questions submitted for the record and their responses 
follow:]



























































































































































                                ------                                

    [Whereupon, at 12:36 p.m., the committee was adjourned.]