[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
STRENGTHENING ACCOUNTABILITY
IN HIGHER EDUCATION TO BETTER
SERVE STUDENTS AND TAXPAYERS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE INVESTMENT
COMMITTEE ON EDUCATION
AND LABOR
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, April 3, 2019
__________
Serial No. 116-15
__________
Printed for the use of the Committee on Education and Labor
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: www.govinfo.gov
or
Committee address: https://edlabor.house.gov
___________
U.S. GOVERNMENT PUBLISHING OFFICE
36-590 PDF WASHINGTON : 2019
COMMITTEE ON EDUCATION AND LABOR
ROBERT C. ``BOBBY'' SCOTT, Virginia, Chairman
Susan A. Davis, California Virginia Foxx, North Carolina,
Raul M. Grijalva, Arizona Ranking Member
Joe Courtney, Connecticut David P. Roe, Tennessee
Marcia L. Fudge, Ohio Glenn Thompson, Pennsylvania
Gregorio Kilili Camacho Sablan, Tim Walberg, Michigan
Northern Mariana Islands Brett Guthrie, Kentucky
Frederica S. Wilson, Florida Bradley Byrne, Alabama
Suzanne Bonamici, Oregon Glenn Grothman, Wisconsin
Mark Takano, California Elise M. Stefanik, New York
Alma S. Adams, North Carolina Rick W. Allen, Georgia
Mark DeSaulnier, California Francis Rooney, Florida
Donald Norcross, New Jersey Lloyd Smucker, Pennsylvania
Pramila Jayapal, Washington Jim Banks, Indiana
Joseph D. Morelle, New York Mark Walker, North Carolina
Susan Wild, Pennsylvania James Comer, Kentucky
Josh Harder, California Ben Cline, Virginia
Lucy McBath, Georgia Russ Fulcher, Idaho
Kim Schrier, Washington Van Taylor, Texas
Lauren Underwood, Illinois Steve Watkins, Kansas
Jahana Hayes, Connecticut Ron Wright, Texas
Donna E. Shalala, Florida Daniel Meuser, Pennsylvania
Andy Levin, Michigan* William R. Timmons, IV, South
Ilhan Omar, Minnesota Carolina
David J. Trone, Maryland Dusty Johnson, South Dakota
Haley M. Stevens, Michigan
Susie Lee, Nevada
Lori Trahan, Massachusetts
Joaquin Castro, Texas
* Vice-Chair
Veronique Pluviose, Staff Director
Brandon Renz, Minority Staff Director
------
SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE INVESTMENT
SUSAN A. DAVIS, California, Chairwoman
Joe Courtney, Connecticut Lloyd Smucker, Pennsylvania
Mark Takano, California Ranking Member
Pramila Jayapal, Washington Brett Guthrie, Kentucky
Josh Harder, California Glenn Grothman, Wisconsin
Andy Levin, Michigan Elise Stefanik, New York
Ilhan Omar, Minnesota Jim Banks, Indiana
David Trone, Maryland Mark Walker, North Carolina
Susie Lee, Nevada James Comer, Kentucky
Lori Trahan, Massachusetts Ben Cline, Virginia
Joaquin Castro, Texas Russ Fulcher, Idaho
Raul M. Grijalva, Arizona Steve C. Watkins, Jr., Kansas
Gregorio Kilili Camacho Sablan, Dan Meuser, Pennsylvania
Northern Mariana Islands William R. Timmons, IV, South
Suzanne Bonamici, Oregon Carolina
Alma S. Adams, North Carolina
Donald Norcross, New Jersey
C O N T E N T S
----------
Page
Hearing held on April 3, 2019.................................... 1
Statement of Members:
Davis, Hon. Susan A., Chairwoman, Subcommittee on Higher
Education and Workforce Investment......................... 1
Prepared statement of.................................... 3
Smucker, Hon. Lloyd, Ranking Member, Subcommittee on Higher
Education and Workforce Investment......................... 5
Prepared statement of.................................... 6
Statement of Witnesses:
Hillman, Mr. Nicholas, Ph.D., Associate Professor, University
of Wisconsin-Madison....................................... 8
Prepared statement of.................................... 11
Emrey-Arras, Ms. Melissa, Director, Education, Workforce, and
Income Security Issues, U.S. Government Accountability
Office (GAO)............................................... 15
Prepared statement of.................................... 17
Ortega, Mr. Noe, Deputy Secretary, Office of Postsecondary
and Higher Education, Pennsylvania Department of Education. 34
Prepared statement of.................................... 36
Brittingham, Ms. Barbara E., Ph.D., President, New England
Commission of Higher Education............................. 45
Prepared statement of.................................... 47
Additional Submissions:
Adams, Hon. Alma S., a Representative in Congress from the
State of North Carolina:
Letter dated April 1, 2019 from Southern Methodist
University............................................. 88
Letter dated April 3, 2019 from the Center for American
Progress............................................... 90
Letter dated April 3, 2019 from the National Association
for College Admission (NACAC).......................... 93
Letter dated April 3, 2019 from the National Consumer Law
Center (NCLC) and Student Loan Borrower Assistance
(SLBA)................................................. 95
Letter from the Institute for College Access and Success. 98
Prepared statement of from CLASP......................... 102
Courtney, Hon. Joe, a Representative in Congress from the
State of Connecticut:
Letter dated February 14, 2019........................... 104
Statement for the record................................. 108
Public Comment from Veterans Service Organizations and
Military Service Organizations......................... 111
Chairwoman Davis:
Letter dated April 1, 2019 from The Century Foundation... 117
Foxx, Hon. Virginia, a Representative in Congress from the
State of North Carolina:
Article: National Affairs Accountability for Higher
Education.............................................. 123
Mr. Smucker:
Article: We Must Support Veterans and Politicize Their
Education.............................................. 153
The Bennett Hypothesis Turns 30.......................... 155
Toward a Better Future: Exploring Outcomes of Attending
Career Colleges and Universities....................... 168
Link: Credit Supply and the Rise in College Tuition:
Evidence From the Expansion in Federal Student Aid
Programs............................................... 193
Takano, Hon. Mark, a Representative in Congress from the
State of California:
Letter dated April 22, 2019 from The George Washington
University............................................. 195
Trahan, Hon. Lori, a Representative in Congress from the
State of Massachusetts:
Letter dated April 1, 2019 from the Legal Services of
Harvard Law School (LSC)............................... 200
Letter dated April 2, 2019 from the National Education
Association (NEA)...................................... 203
Questions submitted for the record by:
Chairwoman Davis......................................... 206
Sablan, Hon. Gregorio Kilili Camacho, a Representative in
Congress from the Northern Mariana Islands...........208, 210
Mr. Takano.............................................. 208
Watkins, Hon. Steve, a Representative in Congress from
the State of Kansas.................................... 206
Responses to questions submitted for the record by:
Ms. Brittingham.......................................... 211
Ms. Emrey-Arras.......................................... 213
Mr. Hillman.............................................. 216
STRENGTHENING ACCOUNTABILITY IN
HIGHER EDUCATION TO BETTER SERVE
STUDENTS AND TAXPAYERS
----------
Wednesday, April 3, 2019
House of Representatives,
Committee on Education and Labor,
Subcommittee on Higher Education and Workforce Investment,
Washington, DC.
----------
The subcommittee met, pursuant to notice, at 9:20 a.m., in
room 2175, Rayburn House Office Building. Hon. Susan A. Davis
[chairwoman of the committee] presiding.
Present: Representatives Davis, Courtney, Takano, Jayapal,
Harder, Levin, Omar, Lee, Trahan, Castro, Sablan, Bonamici,
Adams, Norcross, Smucker, Guthrie, Grothman, Stefanik, Banks,
Walker, Comer, Meuser, and Timmons.
Also present: Representatives Scott and Foxx.
Staff present: Katie Berger, Professional Staff; Nekea
Brown, Deputy Clerk; Ilana Brunner, General Counsel--Health and
Labor; Jacque Chevalier Mosely, Director of Education Policy;
Christian Haines, General Counsel--Education; Ariel Jona, Staff
Assistant; Jaria Martin, Staff Assistant; Max Moore, Office
Aide; Merrick Nelson, Digital Manager; Veronique Pluviose,
Staff Director; Katherine Valle, Senior Education Policy
Advisor; Banyon Vassar, Deputy Director of Information
Technology; Claire Viall, Professional Staff; Marty Boughton,
Minority Press Secretary; Courtney Butcher, Minority Coalitions
and Members Services Coordinator; Bridget Handy, Minority
Legislative Assistant; Blake Johnson, Minority Staff Assistant;
Amy Raaf Jones, Minority Director of Education and Human
Resources Policy; Hannah Matesic, Minority Director of
Operations; Kelley McNabb, Minority Communications Director;
Alex Ricci, Minority Professional Staff Member; and Mandy
Schaumburg, Minority Chief Counsel and Deputy Director of
Education Policy.
Chairwoman DAVIS. Good morning. The Subcommittee on Higher
Education and Workforce Investment will come to order.
Today we are here to discuss the need to have stronger
college accountability, which we all know is critical to
ensuring students are accessing a quality higher education.
Our higher education system maintains its integrity through
three unique entitles, the Federal Government, states, and
accreditors. And together these entitled form the
accountability triad, charged with protecting students and
ensuring that they receive a quality education.
The accountability triad is intended to provide robust
oversight of colleges and universities. But the recent wave of
for-profit college closures raises some serious questions about
its effectiveness, and unfortunately, students and taxpayers
are paying the price.
While some say there are ``bad actors'' in every sector,
history clearly demonstrates that predatory behavior has only
been rampant in the for-profit sector. For-profit colleges
have, by definition, a fiduciary duty to its stakeholders to
maximize profits, often at the expense of students.
We can just tell by looking at the data. And if you can all
see the screen, or several screens around--please look at
those--as you can see, the data clearly show that for-profit
colleges have wreaked havoc on students and taxpayers.
Students in for-profit colleges borrow more often, they
take out larger loans, and default at higher rates than
students in similar programs at public and non-profit colleges.
Even with these abysmal outcomes, students are still
attending these schools and we must ask ourselves why. Is it
because they don't have all the information in front of them?
Well, perhaps that is true. These companies spend a lot of
money aggressively marketing to and targeting students,
particularly students of color, low-income students, and
veterans. So perhaps having better information would help
students make a more informed decision. However, improving
consumer information is in no way a substitute for
accountability. Regardless of how much information is available
to students, most students are inherently constrained by
geography, by place.
Over the last 4 years, we have seen several large for-
profit colleges, college companies collapse, leaving tens of
thousands of students with no degree and high debt loads. And
although we have seen some small, non-profit schools close, the
closure impacts fewer students and are often related to
enrollment declines, not predatory actions.
So to maintain the integrity of our higher education
system, we must examine and strengthen each entity of the
triad, not as independent members but as interdependent members
actively coordinating to achieve the goal of ensuring students
receive a quality education.
Accreditors, traditionally the guardians of higher
education quality, must be more effective at upfront
gatekeeping and ongoing monitoring. And that means setting
standards that vary by institutional mission, using data to
hold schools accountable, and standardizing procedures.
So while I understand that an accreditor's role is to help
institutions improve, accreditors are also charged with
ensuring quality for students today. And if it takes 10 years
before an institution collapses due to its practices, it means
we are failing today's students.
States also play an important role in the accountability
triad, but that role is not well defined. Some states have
taken aggressive steps to conduct proactive oversight, while
others have done little to protect students and taxpayers. So
we must encourage states to enforce minimal standards related
to consumer protections. Reviewing marketing practices and
enrollment contracts when authorizing colleges are just a few
areas where states could take a more active role.
And when the state finds concerning patterns, the state
should, at the very least, bring those concerns to the
attention of accreditors and the Department of Education.
The Federal Government, as one of the three entities in the
triad, must also do more. The Department of Education must
ensure that schools receiving access to Federal student aid are
financially stable and are not defrauding students. And in
cases where students are cheated, the Department must provide
relief so that students can have a new start without the burden
of debt for an education that unfortunately went nowhere.
Under this Administration, the Department has consistently
failed to fulfill the Federal Government's critical role in
keeping colleges accountable, particularly for for-profit
colleges. Under Secretary DeVos, this Department has failed to
implement rules--that are established to protect consumers from
the worst performing schools. And it is then no surprise that
three major college chains abruptly collapsed without warning
to students.
Specifically, the Department has: neglected to intervene
when schools are putting students and taxpayers at risk;
reinstated the troubled Accrediting Council for Independent
Colleges and Schools; and failed to oversee low-quality, career
programs; decreased college transparency, making it harder for
students to make informed decisions; and finally, failed to
quickly provide relief to defrauded students despite being
ordered to implement this protection by a Federal Court Judge.
So the Department has not only abandoned its critical role
in college accountability but has actively worked to undermine
the integrity of the triad through negotiated rulemaking. The
Department is proposing to reduce its own footprint while
providing accreditors with greater flexibility. And ultimately,
these proposed changes would allow low-quality schools to
flourish and leave accreditors with little to no responsibility
for accrediting bad actors.
So as we together consider ways to modernize the Higher
Education Act to meet the needs of our modern work force, we
must strengthen accountability and ensure our current problems
aren't exacerbated in the next reauthorization.
I look forward to working with my colleagues to find
solutions that ensure all students have access to a quality
postsecondary education that leads to a rewarding career.
I want to thank the witnesses for being with us today. I
look forward to your testimony and the discussion that will
follow.
I now yield to the ranking member, Mr. Smucker, for his
opening statement.
[The statement of Chairwoman Davis follows:]
Prepared Statement of Hon. Susan A. Davis, Chairwoman, Subcommittee on
Higher Education and Workforce Investment
Today, we are here to discuss the need to have stronger college
accountability, which is critical to ensuring students are accessing a
quality higher education.
Our higher education system maintains its integrity through three
unique entities: the Federal Government, States, and accreditors.
Together, these entities form the `accountability triad' charged with
protecting students and ensuring that they receive a quality education.
The accountability triad is intended to provide robust oversight of
colleges and universities. But the recent wave of for-profit college
closures raises serious questions about its effectiveness, and
unfortunately, students and taxpayers are paying the price.
While some say there are ``bad actors'' in every sector, history
clearly demonstrates that predatory behavior has only been rampant in
the for-profit sector. For-profit colleges have, by definition, a
fiduciary duty to its stakeholders to maximize profits, often at the
expense of students.
We can tell just by looking at the data.
As you can see on the slide, the data clearly show that for-profit
colleges have wreaked havoc on students and taxpayers. Students in for-
profit colleges borrow more often, take out larger loans, and default
at higher rates than students in similar programs at public and non-
profit colleges.
Even with these abysmal outcomes, students are still attending
these schools and we must ask ourselves why. Is it because students
don't have all the information in front of them? Maybe.
Or maybe it's because these for-profit institutions make it easier
for students to enroll due to their flexible schedules? Perhaps.
But the reality is that these companies spend a lot of money
aggressively marketing to and targeting students, particularly students
of color, low-income students, and veterans. And their budgets are much
larger than the local community college that is also open access and
charges students a lot less than the for-profit company.
So perhaps having better information would help students make a
more informed decision. However, improving consumer information is in
no way a substitute for accountability. Regardless of how much
information is available to students, most students are inherently
constrained by geography.
For-profit institutions tout their flexible schedules and online
education. But the truth is that for-profit institutions often spend a
big part of their budget on recruiting students
Over the last 4 years, we have seen several large for-profit
college companies collapse, leaving tens of thousands of students with
no degree and high debt loads. Although we have seen some small, non-
profit schools close, the closure impacts fewer students and are often
related to enrollment declines not predatory actions.
To maintain the integrity of our higher education system, we must
examine and strengthen each entity of the triad not as independent
members but as interdependent members actively coordinating to achieve
the goal of ensuring students receive a quality education.
Accreditors--traditionally the guardians of higher education
quality--must be more effective at upfront gatekeeping and ongoing
monitoring. That means setting standards that vary by institutional
mission, using data to hold schools accountable, and standardizing
procedures.
While I understand that an accreditor's role is to help
institutions improve, accreditors are also charged with ensuring
quality for students today. And if it takes 10 years before an
institution collapses due to its predatory practices, it means we are
failing today's students.
States also play an important role in the accountability triad. But
that role is not well defined. Some States have taken aggressive steps
to conduct proactive oversight, while others have done little to
protect students and taxpayers.
We must encourage States to enforce minimal standards related to
consumer protections. Reviewing marketing practices and enrollment
contracts when authorizing colleges are just a few areas where States
could take a more active role.
And when the State finds concerning patterns, the State should, at
the very least, bring those concerns to the attention of accreditors
and the Department of Education.
The Federal Government, as one of the three entities in the triad,
must also do more. The Department of Education must ensure that schools
receiving access to Federal student aid are financially stable and are
not defrauding students. And, in cases where students are cheated, the
Department must provide relief so that students can have a new start
without the burden of debt for an education that went nowhere.
Under this Administration, the Department has consistently failed
to fulfill the Federal Government's critical role in keeping colleges
accountable, particularly for-profit colleges.
Under Secretary DeVos, this Department has failed to implement
rules established to protect consumers from the worst performing
schools. It is then no surprise that three major college chains
abruptly collapsed without warning to students. Specifically, this
Department has:
* Neglected to intervene when schools are putting students and
taxpayers at risk;
* ReinStated the troubled Accrediting Council for Independent
Colleges and Schools or A-C-I-C-S;
* Failed to oversee low-quality, career programs;
* Decreased college transparency, making it harder for students to
make informed decisions; and
* Failed to quickly provide relief to defrauded students despite
being ordered to implement this protection by a Federal court judge.
The Department has not only abandoned its critical role in college
accountability but has actively worked to undermine the integrity of
the triad through negotiated rulemaking. The Department is proposing to
reduce the its own footprint while providing accreditors with greater
flexibility. Ultimately, these proposed changes would allow low-quality
schools to flourish and leave accreditors with little to no
responsibility for accrediting bad actors.
As we consider ways to modernize the Higher Education Act to meet
the needs of our modern work force, we must strengthen accountability
and ensure our current problems aren't exacerbated in the next
reauthorization.
I look forward to working with all my colleagues to find solutions
that ensure all students have access to a quality postsecondary
education that leads to a rewarding career.
I want to thank the witnesses for being here with us today. I look
forward to your testimony and the discussion that will follow.
I now yield to the Ranking Member, Mr. Smucker, for his opening
Statement.
______
Mr. SMUCKER. Thank you, Madam Chair, for yielding.
A postsecondary education has long been one of the surest
pathways to a good paying job and lifelong success. Attending
college is a dream for so many Americans and we have made great
strides in reducing barriers to making that dream a reality. It
is something we should all celebrate. But, unfortunately, as
student access has improved, program accountability and
completion of college by students have struggled to keep up. We
do have a completion problem, and students are paying the
price.
Even though we pour billions of taxpayer dollars into
postsecondary education, we have seen modest problems grow into
significant challenges. Easy access to tax payer funded student
loans has indeed driven up tuition and fees. Over the last 30
years the cost of attending a 4 year public education has
increased 213 percent. Meanwhile, completion rates have lagged
behind. Only 58 percent of full-time students at 4 year
colleges graduate within 60 years--only 58 percent.
And today aggregate student debt stands at more than $1.4
trillion, surpassing both national auto loan and credit card
debt.
The absence of downward pressure on rising costs, paired
with the fact that postsecondary institutions don't share in
the risk of students non completion has harmed students'
chances of future success.
Studies show that college is a worthwhile investment for
graduates, but for the students who don't complete their
education, their prospects are actually worse than if they
never attended college in the first place. College too often
has become a risk. Many ask themselves, will enrollment put me
on the path to success or strand me with thousands of dollars
in debt and no degree to show for my efforts.
It is clear that the Federal, State, and accreditors' roles
in postsecondary education must be reformed to protect
taxpayers and promote student success.
Accreditation agencies, independent bodies made up of
members from accredited colleges and universities, provide
quality control in the higher education space. Accreditors are
responsible for judging whether institutions are fulfilling
their duties and providing students with a high quality
education. Unfortunately, accreditors are often back on their
feet having to focus on bureaucratic compliance more than on
promoting innovation and academic integrity.
Committee Republicans believe the accreditation process
should be reformed to foster institutional innovation and
strong educational outcomes for students. Preserving the
current accreditation framework is important. The Federal
Government is not and should never be responsible for
prescribing academic standards for institutions, but there is
room to reform the system for greater accountability and
quality.
The Higher Education Act should be reformed to provide
prospective students and their families with better
information. Higher education is an investment and students
deserve access to metrics, like graduate rates, average debt
per pupil, and employment outcomes by university and by field
of study.
Choosing the right school and study area are decisions that
will have a lasting impact on a student's life. We should
empower students with the information they need to make a fully
informed decision.
Today's postsecondary education system looks a bit like a
tangled ball of yarn. From rising tuition, student debt, to
lagging innovation and low graduation rates, every problem is
interconnected. But if we strengthen our accountability in
higher education and reform accreditation to focus on quality
and results, we can begin to restore the balance of flexibility
for institutions to innovate and accountability for students
and taxpayers.
Thank you, Madam Chair.
[The statement of Mr. Smucker follows:]
Prepared Statement of Hon. Lloyd Smucker, Ranking Member, Subcommittee
on Higher Education and Workforce Investment
Thank you for yielding.
A postsecondary education has long been one of the surest pathways
to a good-paying job and lifelong success. Attending college is a dream
for so many Americans and we've made great strides in reducing barriers
to making that dream a reality. This is something we should celebrate
but unfortunately as student access has improved, program
accountability and completion of college have struggled to keep up.
We have a completion problem and students are paying the price.
Even though we've poured billions of taxpayer dollars into
postsecondary education, we've seen modest problems grow into
significant challenges. Easy access to taxpayer-funded student loans
has driven up tuition and fees.
Over the last 30 years, the cost of attending a 4-year public
institution has increased 213 percent.
Meanwhile, completion rates have lagged behind. Only 58 percent of
full-time students at 4-year colleges graduate within 6 years, and
today, aggregate student debt stands at more than $1.4 trillion,
surpassing both national auto loan and credit card debt.
The absence of downward pressure on rising costs paired with the
fact that postsecondary institutions don't share in the risk of
students' noncompletion has harmed students' chances at future success.
Studies show that college is a worthwhile investment for graduates; but
for the students who don't complete their education, their prospects
are worse than if they'd never attended college in the first place.
College has become a risk for many. Many students ask themselves:
``Will enrollment put me on the path to success, or strand me with
thousands of dollars in debt and no degree to show for my efforts?''
It's clear that the Federal, State, and accreditors roles in
postsecondary education must be reformed to protect taxpayers and
promote student success.
Accreditation agencies, independent bodies made up of members from
accredited colleges and universities, provide quality control in the
higher education space. Accreditors are responsible for judging whether
institutions are fulfilling their duties and providing students with a
high-quality education.
Unfortunately, accreditors are often on the back foot, having to
focus on bureaucratic compliance more than on promoting innovation and
academic integrity.
Committee Republicans believe the accreditation process should be
reformed to foster institutional innovation and strong educational
outcomes for students.
Preserving the current accreditation framework is important the
Federal Government is not and never should be responsible for
prescribing academic standards for institutions. But there is room to
reform the system for greater accountability and quality.
The Higher Education Act should be reformed to provide prospective
students and their families with better information. Higher education
is an investment, and students deserve access to metrics like graduate
rates, average debt per pupil, and employment outcomes by university
and field of study.
Choosing the right school and study area are decisions that will
have a lasting impact on a student's life. We should empower students
with the information they need to make a fully informed decision.
Today's postsecondary education system looks a bit like a tangled
ball of yarn. From rising tuition and student debt to lagging
innovation and low graduation rates, every problem is interconnected.
But if we strengthen our accountability in higher education and
reform accreditation to focus on quality and results, we can begin to
restore the balance of flexibility for institutions to innovate and
accountability for students and taxpayers.
______
Chairwoman DAVIS. Thank you, Mr. Smucker.
And, without objection, I just wanted to mention that all
members who wish to insert their written statements into the
record can do so by April 16.
I wanted to just correct the record here because I think we
want to be very clear that--we need to clarify that grant aid
and loans have been driven up, the price at college, but only
at for-profit institutions. So we haven't seen that. Research
has found time and time again that this is not true at public
institutions. So we want to just make sure that we are clear.
And we can go back and take a look at that record together if
you would like. No problem.
Okay. And I now want to introduce our witnesses. Dr.
Nicholas Hillman is an associate professor of education
leadership and policy analysis at the School of Education of
the University of Wisconsin-Madison. Dr. Hillman's research
examines how Federal student aid and state performance based
funding policies affect educational opportunity and outcomes.
Dr. Hillman earned his doctorate in educational leadership and
policy studies from Indiana University.
Welcome.
Ms. Melissa Emrey-Arras is the director of education, work
force, and income security issues at the U.S. Government
Accountability Office, that we know as GAO. Ms. Emrey-Arras has
been with the GAO for nearly 2 decades and oversees GAO's work
on higher education. Ms. Emrey-Arras received a master's degree
in public policy from Harvard and holds a bachelor's degree
from Swarthmore College.
Welcome, as well.
Mr. Noe Ortega is the commissioner of postsecondary and
higher education and is deputy secretary for the Office of
Postsecondary and Higher Education at the Pennsylvania
Department of Education. In this role Mr. Ortega oversees
higher education for the Commonwealth of Pennsylvania.
Mr. Ortega holds a master of science in education
psychology from Texas A&M University-Corpus Christi, and a
bachelor's degree from St. Edward's University.
Welcome.
And Dr. Barbara Brittingham is the president of the New
England Commission of Higher Education. Her commission
accredits 226 institutions of higher education, most of which
are private, nonprofit in the 6 New England states.
Dr. Brittingham received her doctorate from Iowa State
University.
We appreciate all of you being here today and look forward
to your testimony.
I wanted to just remind the witnesses that we have read
your written statements and they will appear in full in the
hearing record. Pursuant to committee rule 7d and committee
practice, each of you is asked to limit your oral presentation
to a 5 minute summary of your written statement.
I also want to remind the witnesses that pursuant to Title
18 in the U.S. Code, Section 1001, it is illegal to knowingly
and willfully falsify any statement, representation, writing
document, or material fact presented to Congress or otherwise
conceal or cover up a material fact.
Before you begin your testimony please remember to press
the button on the microphone in front of you so that it will
turn on and the members can all hear you. As you begin to speak
the light in front of you will turn green and, after 4 minutes
the light will turn yellow to signal that you have 1 minute
remaining. When the light turns red your 5 minutes have expired
and we ask that you please wrap up.
So after all that is said, we will certainly let the entire
panel make their presentations before we move to member
questions. And when answering a question, please remember to
once again turn your microphone on.
I will first recognize Dr. Hillman.
STATEMENT OF PROFESSOR NICHOLAS HILLMAN, PH.D., ASSOCIATE
PROFESSOR, UNIVERSITY OF WISCONSIN-MADISON
Mr. HILLMAN. Chairwoman Davis, Ranking Member Smucker, and
Members of the committee, thank you for inviting me to this
hearing on strengthening accountability in higher education. I
am honored to participate and I look forward to continuing
these conversations with the Committee and your staff.
Across our Nation's 4,300 degree-granting colleges and
universities and the 19 million students that they serve, there
is a wide range of educational missions, types of colleges, and
students' needs. There is also a high degree of inequality in
student access and outcomes that are driven by two main forces,
unequal educational opportunities outside of college, and
unequal resources among colleges.
So a challenge for any accountability system is to ensure
that it does not reinforce the very inequalities that it seeks
to resolve. So improving accountability should, in my opinion,
focus on improving outcomes for all students, especially those
who have been traditionally underserved and poorly served by
colleges and universities.
The accountability triad plays a central role here in
identifying the shared commitments among the Federal
Government, States, and accreditation agencies.
Each member of the triad has a role to play. For example,
accreditors conduct the in-depth peer review to ensure that
colleges and academic programs meet minimal quality standards
and that they have appropriate financial and human resources.
Neither the states nor the Federal Government conduct these
reviews. Instead, governmental agencies rely on accreditors'
expertise as a form of professional accountability.
For quality assurance at the Federal level, accountability
policies come in three main varieties. The first is consumer
information. So via tools such as the college score card and
the college navigator. The second is through regulatory action
where through negotiator rulemaking the U.S. Department of
Education implements program integrity rules, such as gainful
employment. And the third is the legislative action that
codifies accountability policies, such as the Cohort Default
Rate, the Financial Responsibility Standards, the ``90/10
rule'' into the Higher Education Act itself.
In states, accountability comes in different forms,
primarily around academic program review, state authorization,
and performance management. State higher education executive
agencies and governing boards ensure academic programs are not
unnecessarily duplicated. They also determine which
institutions are authorized to operate in their territorial
state boundaries. States have taken many actions to incorporate
performance management into their accountability systems, most
notably performance-based funding, which has been found to have
very mixed results in improving student outcomes.
And this is one of my research areas where the best
evidence to date finds that performance-based funding states do
not typically outperform other states and may even reinforce
inequality in some cases.
When well-coordinated, each of these three members of the
triad can leverage their shared commitments to create better
educational environments for students. The triad's differential
accountability system is designed to hold different
institutions, programs, and sectors accountable for different
outcomes. This is one of the system strengths and requires
ongoing coordination and maintenance.
More can be done to hold the poorest performing
institutions and their programs accountable that are fair,
effective, and that promote better student outcomes.
So, I will conclude with a few examples. First, few
accountability efforts adjust outcomes based on students'
inputs. States are trying to address this by incorporating
premiums and bonuses into their performance-based funding
models when colleges serve targeted populations like low-income
students, older students, or students of color, when they serve
them well. And well-designed input adjustment can paint a
fairer picture of the role that colleges play in promoting
student success.
Second, accountability efforts tend to focus on consumer
information and financial incentives that overlook capacity
building as a way to promote improvement. Ensuring that
colleges have adequate resources to improve outcomes may be an
effective complement to the triad's suite of accountability
policies.
And, finally, well designed accountability policies must
link policy and practice. In my work at the University of
Wisconsin-Madison we have developed an innovative research
practice partnership with our financial aid office where my
research team uses data and analysis to help improve the
administration of financial aid programs to support students'
success on campus. Our work connects policy and data with on
the ground practices to better support students and to provide
a feedback loop that is sometimes missing from accountability
conversations.
To conclude, I believe public policy problems concerning
unequal college completion rates, quality assurance,
affordability, and burdensome student loan debt would be worse
without the accountability triad's oversight. I also believe
these problems can be solved, or at least improved, via better
accountability that addresses the root problems, incorporates
promising design features, focuses on students, and keeps an
eye toward inequality.
I hope my testimony provides useful guidance for your
committee and I commend you for your service in addressing
these important accountability issues to promote better student
outcomes.
Please know it is my honor and privilege to be a resource
today and into the future.
Thank you.
[The statement of Mr. Hillman follows:]
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Chairwoman DAVIS. Thank you. And you stayed within your
time well.
Ms. Emrey-Arras, please.
STATEMENT OF MELISSA EMREY-ARRAS, DIRECTOR, EDUCATION,
WORKFORCE, AND INCOME SECURITY ISSUES, U.S. GOVERNMENT
ACCOUNTABILITY OFFICE
Ms. EMREY-ARRAS. Chairwoman Davis, Ranking Member Smucker,
and members of the subcommittee. I am pleased to be here today
to discuss the Federal Government's role in ensuring
accountability in higher education.
In Fiscal Year 2018 nearly 13 million students and their
families received over $122 billion to help them pursue higher
education through programs authorized under the Higher
Education Act. Education administers these programs and is
responsible, with the rest of the triad, for maintaining
accountability and protecting the Federal investment in higher
education.
Among Education's responsibilities are recognizing
accreditors to oversee educational equality, determining which
schools are financially responsible and can participate in
Federal student aid programs, and ensuring that schools comply
with laws and regulations. However, news reports about students
attending low quality schools, an increasing number of schools
closing due to financial difficulties, and the substantial
amount of student loans in default have raised questions as to
whether this existing accountability system is sufficient for
protecting students and taxpayers.
My remarks today focus on our prior GAO work and
Education's role in (1) recognizing accreditors, (2) overseeing
the financial condition of schools, and (3) overseeing school
student loan default rates.
To begin with Education's recognition of accreditors.
Accreditors are independent agencies responsible for ensuring
that schools provide a quality education and must be recognized
by the Department. Accreditors must have their recognition
renewed by Education at least every 5 years, and Education
reviews, among other things, whether the accreditor applies its
own standards when it accredits schools. The accreditors, in
turn, can issue sanctions, including terminations and
probations to schools that do not meet the accreditor's
standards.
However, we previously found that schools with weaker
student outcomes were on average no more likely to be
sanctioned by accreditors than schools with stronger student
outcomes. And Education does not make consistent use of
sanction data that could help it identify insufficient
accreditor oversight. In 2014 we recommended that Education use
accreditor data in its recognition process to determine whether
accreditors are consistently applying their standards to ensure
schools provide a quality education. The Department agreed with
the recommendation but has yet to implement it.
Now turning to financial accountability. Education uses a
financial composite score to measure the financial health of
schools and to enable it to increase its oversight of schools
and help protect against the risk of school closures. School
closures, although rare, can result in hundreds of millions of
dollars in unrepaid Federal student loans and the displacement
of thousands of students. However, the composite score has been
an imprecise risk measure, predicting only half of the school
closures we looked at. This is partly due to the fact that the
composite score does not reflect changes in accounting
practices, relies on outdated financial measures, and is
vulnerable to manipulation.
Despite these limitations, Education has not updated the
scores since it was created more than 20 years ago. In 2017 we
recommended that Education update the score. Education has
proposed some revisions, but changes have not yet been
implemented and they do not fully address the problems with the
composite score.
Now, turning to the issue of student loan defaults.
According to Federal law, schools may lose their eligibility to
receive Federal student aid if a significant percentage of
their borrowers default on their loans within the first 3 years
of repayment. However, we found that some schools manage these
default rates by hiring consultants that encourage borrowers
with past due payments to put their loans in forbearance, an
option that allows borrowers to temporarily postpone payments
and bring past due loans current. We found that this practice
can increase borrowers loan costs. For example, a typical
borrower with $30,000 in loans who spends the first 3 years of
repayment in forbearance would pay over $6,700 in additional
interest.
Pushing borrowers into forbearance also helps schools avoid
accountability because borrowers are then more likely to
default in the fourth year of repayment when schools are not
held accountable for defaults. This practice shows the weakness
of the Federal Cohort Default Rate to hold schools accountable.
In 2018 we suggested that Congress consider statutory
changes to strengthen schools' accountability for student loan
defaults. However, legislation has yet to be enacted.
We believe that fully implementing our recommendations will
improve Federal accountability and help students.
Thank you.
[The statement of Ms. Emrey-Arras follows:]
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Chairwoman DAVIS. Thank you very much. Right on the button.
Mr. Ortega.
STATEMENT OF NOE ORTEGA, DEPUTY SECRETARY, OFFICE OF
POSTSECONDARY AND HIGHER EDUCATION, PA DEPARTMENT OF EDUCATION
Mr. ORTEGA. Chairwoman Davis, Ranking Member Smucker, and
members of the committee, thank you for the opportunity to
provide remarks to the committee today on the importance of
strengthening accountability for the system of higher
education.
In some ways the centrality of higher education to the
wellbeing of our Nation has resulted in greater public interest
in the outcomes of higher education. When you consider new
entrants coming into the field every day, the commitment of
states to create postsecondary attainment goals has created,
and public investment as well, has generated a great deal of
interest in the public in higher education. Ultimately,
accountability represents a renewal of trust in the belief that
institutional performance and the value of postsecondary
credentials are worthy of the tax investments.
Let me talk a little bit about the role of the state in
accountability as it works now. States provide authorization
for all credential granting institutions. And the process for
providing authorization varies from state to state. In fact, I
could probably characterize it as pretty disparate in terms of
both the processes of doing it and the criteria being used.
The process may be as simple as successful submittal of an
application or it could involve a little more rigorous review
among some of the applicants to the state.
In Pennsylvania the authorization process is exclusively
done by the State Education Agency. We collect the
applications, we review it, provide a visit, and then prior
to--providing a final determination we do put the applications
out for public comment, and eventually the Secretary of
Education will sign off on authorization.
Once an institution is authorized the next step is clearly
the maintenance and renewal for state authorization for an
institution, which also varies from state to state. In some
cases, many cases, the variation in this is problematic in
terms of being able to ensure the quality of an institution.
While state authorization is necessary to operate in
states, I want to be clear to point out that state
authorization does not serve as a confirmation of educational
quality of an institution. This is something that is reserved
for the accreditation process, which is run by accreditors.
While the processes somewhat work together in that state
authorization and degree granting, credentialing granting
authority is provided before an institution can seek to get
approval. This is essentially how the relationship of the state
works with the other members of the triad, right.
So, in short, states authorize, accreditors provide
education quality, and, ultimately, the Federal Government is
responsible for overseeing the maintenance of the financial aid
program.
I want to talk a little bit about a concept that I have
been terming as ``accreditation bloat.'' Essentially it
suggests that over time, as more concerns have emerged in the
system of higher education, many of these concerns have sort of
been addressing these concerns has sort of become a role that
we bestowed on accreditors over time. Things like thinking
about student loan debt, thinking about quality and outcomes,
and even more recently, thinking about the impact on students
with closure, have become some of the things that have in some
ways been put on the accreditors today.
For this reason, I feel like it is important that we
rethink the roles of each of the members of the triad. More
specifically, the role that the state can play in enhancing and
sharing some of the accountability expectations around assuring
quality for institutions of higher education. We must be
intentional about creating these roles and we must understand
the benefits of being able to engage the state, particularly in
some of the upfront determinations that need to be made in
order to help institutions navigate and maintain quality
assurance.
So how do we accomplish this? I think there are already a
number of things that we can begin to build on. As I mentioned
before, states are putting together accountability state
attainment goals that are useful. Many of them are even going
as far as implementing strategies for how to hold these
institutions accountable for increasing postsecondary
attainment, particularly as it relates to high quality
educational opportunities for a number of students.
There is also the opportunity to build on some of the--
levers available to states as well, levers around financial aid
that is provided by various states. You can have additional
criteria that states can begin to use to hold institutions
accountable for some of the state investment that they are
receiving.
There are a number of levers that are already in place that
can be utilized for states, but most importantly, states are
positioned uniquely to understand the context, especially the
political, economic, and social context of institutions that
can be useful to make determinations of the long-term quality
assurance of the institutions.
New stakeholders are entering the field all the time. While
state investment has been declining, I think it is important to
begin to leverage some of the resources that are currently
available.
While there may be an infrastructure in place currently
that was created several years ago, that doesn't necessarily
apply to a number of things. I think that there are some things
that we can begin to do to create standards uniform across the
states on this accreditation process.
Thank you for the opportunity to provide comments. I look
forward to answering your questions.
[The statement of Mr. Ortega follows:]
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Chairwoman DAVIS. Thank you very much.
Dr. Brittingham?
STATEMENT OF BARBARA E. BRITTINGHAM, PH.D., PRESIDENT, NEW
ENGLAND COMMISSION OF HIGHER EDUCATION
Ms. BRITTINGHAM. Yes, thank you. Chairwoman Davis, Ranking
Member Smucker, members of the committee, thank you for the
opportunity to testify today.
I am president of the New England Commission of Higher
Education, one of seven regional accrediting agencies in the
U.S. Our Commission is keenly aware of its responsibility to
the public to ensure taxpayer dollars are going to support
students at institutions that provide them with a solid
education and degrees that have value.
Collectively, regional accreditors serve as a gatekeeper
for Federal financial aid to approximately 3,000 public,
independent, and for-profit colleges and universities. Other
institutional accreditors are known as national accreditors.
They accredit about 4,800 faith based and career related
institutions. Also, the Department of Education recognizes 40
programmatic accreditors in areas such as medicine, law, and
dance. All recognized accreditors serve as the gatekeepers for
Federal financial aid for students or other Federal funding.
Together with the states and the Department, accreditors
are members of the triad. We work regularly with the Federal
Government and individual states, we meet twice a year with our
state higher education executive officers to increase
communication and coordination. States can send observers on a
comprehensive evaluation visits and we also work with Federal
financial aid staff regarding institutional closure and program
confirmation.
Before an institution becomes accredited it must be found
eligible and become a candidate, which involves a self study
against our standards, validated by a team of peer evaluators
trained by our agency. Within 5 years the institution must
repeat that process to become accredited.
Accreditation decisions are made by our Commission, a group
of 27 volunteers, including institutional members, presidents,
academic officers, finance officers, and trustees, and members
of the public. By Federal regulation, at least one of every
seven members is a public member.
Our relationship with each institution is ongoing. Every
institution has a comprehensive evaluation every 10 years and a
significant interim report at the midpoint. To monitor
institutions between these points the Commission uses a variety
of special purpose--reviews and visits to assist in the
institutional improvement and to ensure quality of the
institution. Annually every institution submits a report,
including information on enrollment, finances, and student
debt. This information can determine whether the institution
requires additional monitoring, which happened about 15 times
last year.
When the Commission has reason to believe that an
institution is no longer meeting one or more of the nine
standards it will ask the institution to show cause why it
should not be placed on probation or have its accreditation
withdrawn. Probation and withdrawal decisions can be appealed
on procedural grounds, and there is a provision for new
evidence which can lead the Commission to reconsider its
decision.
When the Commission does when appropriate withdraw
accreditation, our job is not to shut down every institution
that encounters a problem. Our role is to monitor and assist
institutions, ensure they are making necessary changes in a
timely fashion, while at the same time being prepared to
withdraw accreditation if the institution can no longer provide
a solid education to its students.
When an institution has its accreditation withdrawn or
decides to close, we work with them to make sure they have
signed teach-out agreements with other institutions, so
students continue their education with minimal disruption.
Regional accreditation focuses on student outcomes,
retention and graduation rates, loan default, and repayment
rates, and whether students are achieving the learning goals of
their programs. Licensure passage rates, going onto the higher
degree, and employment rates are also important.
Institutions also look at outcomes central to their
mission. For public institutions the percent of graduates who
are employed in the state, for an arts institution, the percent
of students who make their living from their art, for a faith-
based institution, the percent of its graduates who report
attending church regularly. As with K-12 education, there is no
single measure of success and no bright line that can assure
quality.
With respect to reauthorization, we have been following the
congressional efforts, including the PROSPER Act and Aim
Higher, and hope you are able to achieve your goal of
bipartisan agreement this year.
In so doing, we urge you to continue to maintain the
centrality of peer review. The 30,000 volunteers who
participate in accreditation each year provide a level of
expertise and reasonable cost structure that could not be
otherwise duplicated in any other system.
We hope that the reauthorized HEA regional accreditation
can continue to fulfill its dual responsibilities of quality
assurance for the public and quality improvement for
institutions. We also believe in allowing for more flexibility
and innovations so institutions can focus on outcomes that
matter most.
Finally, we hope that the reauthorization includes
provision for accreditors to innovate and experiment to ensure
it remains a robust and responsive member of the triad dealing
with issues and challenges that may not yet be before us.
I look forward to our conversation.
Thank you.
[The statement of Ms. Brittingham follows:]
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Chairwoman DAVIS. Thank you very much, Dr. Brittingham, and
all of you for your testimony.
And we are going to turn to our question and answer session
now where all members have a chance to really engage in these
issues. And, as I was saying to our witnesses earlier, kind of
a dry subject and yet, you know, we know how critical, how
important it is, and all of us--you know, we don't live in that
world, and so trying to really understand the complexity, where
the problems lie and where we can really have an effect.
So I wanted to begin that under the 5 minute rule of
course. I will start, followed by the ranking member.
And I will recognize myself for 5 minutes.
Mr. Ortega, I am going turn to you first. It is my
understanding, and I think you have mentioned this in your
testimony as well, that state approval can vary by sector. We
understand that. But also, some states make public institutions
meet a higher bar than for-profit colleges. Why is that?
Mr. ORTEGA. So one thing to keep in mind is when you move
toward--oh, I think I--no problem--one thing to keep in mind is
when we think about the state authorization process,
particularly when it relates to the traditional sector of
higher education, versus the for-profit emerging sector, one of
them has been around for a longer time. So you have been able
to sort of develop processes that are tied to a number of
things that create legitimacy at the institution.
Within the for-profit sector you have got new processes
that are emerging all the time, new lessons that we are
learning with regard to behaviors and practices at the
institutions. And so one of them is not as fully developed.
If you think about it that way, I think the process is more
rigorous as it stands now, but it is becoming in some places,
you are developing some standards for how you could be more
effective. But I would say the process is different. In some
ways it is inhibited by the prescribed roles of how we work
with regards to quality assurance and accountability. But I
would be remiss if I didn't say that in some cases states have
sort of punted on quality assurance and determinations of
quality and accountability for institutions, to folks like the
accreditors. And I think that is something that needs to be
improved.
Chairwoman DAVIS. Yes, and looked at. Thank you. I
appreciate that. I mean given that they actually do engage
more, have more oversight over public and nonprofit
institutions, the Federal Government then, perhaps--and I guess
in our discussion--needs to step in with additional oversight
of the for-profit institutions, because otherwise, as you said,
it is not happening, or it is not happening soon enough.
I wanted to ask unanimous consent right now to just enter
into the record a letter from the Century Foundation explaining
the need to have different accountability standards for
institutions seeking to profit off of our students. And, if
there is no objection, I will submit that for the record.
So ordered.
So despite the need for increased oversight of for-profit
institutions, the Department, under this Administration, has
actually stepped away from implementing regulations such as
gainful employment and ensuring that risky institutions provide
sufficient financial surety to protect taxpayers.
Given the void that has been left by the Department of
Oversight, State attorneys general in some cases have actually
stepped in to fill this role.
So if I could turn to you again, Mr. Ortega, just, you
know, can you tell us about how your state AG supports
oversight and enforcement in the higher ed space.
Mr. ORTEGA. Sure. Consumer protections have become
extremely important at the state level. Credit recovery is one
of the areas that has grown increasingly important in our
state. This is making sure that the credits that students have
earned are in some way protected and held on to. You would be
surprised how many of those documents over time have just gone
missing in some cases.
And so moving in that direction is something that we have
been thinking about significantly. Tuition recovery is another
effort in Pennsylvania that we have been looking at closely,
working with members of the general assembly, the State
Attorney General, other folks who are vested in making sure
that students are protected, and whatever behaviors are
happening out in the system, they don't put the students and
their families at risk.
Chairwoman DAVIS. And the authorizers working hand in hand
with State AGs, is that something as well? I mean that is where
that need has to come in.
Mr. ORTEGA. In many cases that is where it--because of the
pressure coming into the Attorney General as folks raise more
lawsuits--but I think truly it is emanating from a number of
areas, including really good partnerships that currently exist
between states and new emerging players, especially as they are
trying to get better organized to ensure the quality of the
entire system of higher education. You have folks who are
stepping up thinking that these are things that should be
prioritized.
Chairwoman DAVIS. And what about working with accreditors
as well? The state role in that? You had mentioned that they
can't be the sole arbiters of quality, but--my time is going to
run out in about 2 seconds. I want to just have a few issues
that you could address there.
What do you think the minimum standards that we should be
requiring states to adopt and what about the collaboration, can
it be improved?
Mr. ORTEGA. Sure, sure. And the state higher education
association for executive officers has done a really good job
in bridging those conversations. I think more players have to
come into the table in those discussions. I think there is an
understanding of sharing that responsibility of accountability
and I think we are beginning to see more movement in that area.
If I may, I think the Federal Government does play a
significant role in nudging that along further.
Chairwoman DAVIS. And why doesn't it happen more?
Mr. ORTEGA. It is a good question. I am not exactly sure. I
think it is just the newness, maybe sometimes the aversion to
taking on a little bit of risk, but I see some movement that
maybe--
Chairwoman DAVIS. Thank you. Thank you. We can perhaps get
at a little bit more of that as we go on.
And I want to now recognize the ranking member for his
questions.
Mr. SMUCKER. Thank you. I would like to thank all the
witnesses for their testimony.
Secretary Ortega, good to have you here. Always a pleasure
to have an expert from Pennsylvania to highlight the great
system of higher education that we have in the state--
Mr. ORTEGA. I appreciate it--
Mr. SMUCKER. So I appreciate the strides that we are making
in the state to hold institutions accountable and to set
students up for success. So thank you--
Mr. ORTEGA. You are welcome--
Mr. SMUCKER. I do have a question. Postsecondary education
is changing--
Mr. ORTEGA. Sure--
Mr. SMUCKER. People are learning throughout their entire
lifetime. So I would like to have you discuss how we think
about that, the lifelong nature of postsecondary education, and
also how Pennsylvania is relying on our institution of higher
education to promote career readiness and success.
Mr. ORTEGA. Sure, sure. And so I think it is important, and
we have seen this movement across a number of states, for folks
to buy into the fact that the economic vitality, the social
vitality, all the outcomes associated with postsecondary
educational attainment are really important in terms of
ensuring that folks are productive citizens in the state. So
Pennsylvania has really doubled down on its investments in
education in general, including post-secondary education, which
is a really, really great thing to hear from me as the Deputy
Secretary in Higher Education.
It is important that we also understand that in terms of
being able to both attract new folks, especially business and
industry, to come into the state, lots of the frameworks around
how this could be done is focused on emphasizing the importance
of postsecondary education. So in many ways that has happened.
It has moved even further along. I think that in Pennsylvania
they have demonstrated, as have other states, the importance of
sort of cradle to the grave strategies. Putting postsecondary
or career pathways in place early on to make sure that more
folks go into some sort of postsecondary opportunity. All these
efforts in some way elevate the importance of making sure that
when folks do enter the postsecondary pathway of their choice,
that they enter something that is emphasizing high quality and
rigor in the postsecondary opportunities to make sure that
folks who exit have the skills needed to do well in particular
areas, but also continue to promote sort of the wellbeing and
vitality of the postsecondary structure--
Mr. SMUCKER. Thank you--
Mr. ORTEGA. Thank you--
Mr. SMUCKER. Dr. Brittingham, I believe that innovation,
for instance, competency-based education, can be a factor in
driving down the cost of college for today's students.
Do you believe that the Federal Government constricts your
ability to allow your member institutions to test new methods
of delivering education? Do you think we constrict that?
Ms. BRITTINGHAM. I think it is important to have some
safeguards there, but I think speaking for New England at
least, our institutions are continuously innovating and we look
forward to that. The largest institution in New England,
Southern New Hampshire University, has a very large online
program and a significant direct assessment competency-based
program that is a very important and fascinating innovation
that came along. Our commission met together with the president
of Southern New Hampshire to learn about what they were doing.
They prepared an excellent substantive change in term of our
report for approval of that. And Southern New Hampshire
recently had its comprehensive evaluation, and the team and the
commission were impressed with the success there.
Mr. SMUCKER. Is there anything we should be considering as
we are looking at reauthorization to allow more innovation by
institutions?
Ms. BRITTINGHAM. I think that is a great question. And part
of the problem is that often times I think we try to solve the
problems that are in front of us and it is hard to anticipate
what is going to be coming down the line. So I am hoping that
the Higher Education Act has room for institutions and
accreditors to experiment, again, with some safeguards there to
make sure that those experiments are looked at. I think often
the experimental programs at the Department are good efforts,
but there hasn't always been an effort to go back and look and
see what have we learned there, what has worked, what hasn't
worked. So I think we need it on both ends.
Mr. SMUCKER. Thank you. I will try one more question.
Ms. Emrey-Arras, I am concerned about the extent to which
the current financial composite score fails to capture an
institution's true fiscal capacity, but I am equally concerned
about mandating a fix within the HEA.
What can Congress or the Department do to update the
financial composite score measurement to account for future
accounting practices while still protecting taxpayer funds?
Ms. EMREY-ARRAS. We also believe that the Department needs
some discretion in how to set the composite scores. So we were
purposely not prescriptive when we recommended that they update
the scores. So we didn't say you need to do A, B, C, D, E, F,
G, we said you just need to make sure that you update it so it
can more accurately reflect the financial health of schools. So
we would leave that to the Department.
Mr. SMUCKER. Thank you.
Chairwoman DAVIS. Thank you very much.
And we are pleased that both the chairman of Ed & Labor and
the ranking member are both here to ask questions. I am going
to start with Mr. Scott and then we will turn to the ranking
member.
Mr. SCOTT. Thank you, Madam Chair.
Dr. Brittingham, who in the triad should review the costs
of education? Some of the schools are charging tuitions that I
think by any measure are unreasonably high.
Ms. BRITTINGHAM. I think we all have some responsibility in
that regard. And I think part of what we need to look at is the
published cost and the actual cost that students pay and see
the extent to which our colleges and universities are able to
enroll students along the economic spectrum and have costs that
leave them with debt that is manageable after they graduate.
Mr. SCOTT. Is that something the accreditors are looking
at?
Ms. BRITTINGHAM. I will speak for New England, we do not
look directly at costs, but we do look--we look every year at
loan default, and this past year we have also started looking
at loan repayment rates. And we have set cut scores for
institutions to submit reports if their loan repayment rates
are below a certain level. So it is something that we have been
doing. We have looked at loan default rates for 6 or 7 years
and ask institutions to report on what they are doing to lower
the loan default rate.
Mr. SCOTT. Thank you. And can you say a word about the--
importance of using the credit hour as a measure for student
aid and also how that would affect someone taking remedial
courses?
Ms. BRITTINGHAM. Yes, thank you. I think the credit hour
is, it is certainly an imperfect measure, but it is the only
currency we have right now. We know that three credits should
represent more learning than one credit, and we know that a
course offered at the 400 level should be more advanced than a
course offered at the 100 level. I think someone else would
probably be better than I am to talk about credits and
remedial, but I know a lot of our institutions are looking at
having experiences that happen alongside credit bearing courses
so that students don't get stuck in remedial courses where they
get discouraged and use up their Federal financial aid too
quickly.
Mr. SCOTT. Thank you.
Ms. Emrey-Arras, you mentioned Cohort Default Rate reform.
What does that look like?
Ms. EMREY-ARRAS. We would recommend that the Congress
consider a legislative fix to the metric. We think that the
metric is currently being gamed by schools and the consultants
that they hire, and that it needs to change.
Mr. SCOTT. Change to what?
Ms. EMREY-ARRAS. Change to something that doesn't allow
schools and their consultants to put borrowers into long-term
forbearance, which means that they are racking up interest
while not making any payments and then defaulting often in the
fourth year after schools are no longer held accountable.
Mr. SCOTT. Do you mean that if they are in forbearance that
wouldn't count as the 3-years?
Ms. EMREY-ARRAS. There are a variety of ways of fixing it,
but I think one proposal is to think about not allowing schools
to exempt these students during that time period.
Mr. SCOTT. Thank you.
Professor Hillman, on distant learning, why is it important
to have regular and substantive interaction with instructors
and what would happen if you got rid of those regulations?
Mr. HILLMAN. For distance education, the work that I am
familiar with consistently shows--let me preface it by saying
the research takes a while to produce and the innovation in
this space happens a lot more quickly than the research, so we
have sort of a lag there. But the research I am familiar with,
that is the higher standards that I would say, consistently
finds that distance education works well for students who are
really well prepared, like Georgia Tech students who are doing
master's degrees in computer science. There is a study showing
it works well for them, and you would think that is probably
right, that is the student who it works well for.
The other end of the spectrum, commuter students and
students of color, generally tend to struggle when it is just
an online presence of a course. And so when there is the face
to face contact, there is a little bump there. I think there is
a lot of research still to go to really disentangle all of
this.
But I would say though, to answer the--so what here is--is
that it is incredibly important to have that contact with the
faculty member, a professor. To have faculty members and
students interacting and learning together is critical.
Mr. SCOTT. And if you got rid of that regulation, what do
you think would happen?
Mr. HILLMAN. Well, I could speculate, but I don't see a lot
of upside. I think it would probably disproportionately have
negative effects on a lot of our most marginalized students in
the first place.
Mr. SCOTT. Thank you.
I yield back.
Chairwoman DAVIS. Thank you.
Now I turn to Ms. Stefanik.
Ms. STEFANIK. Thank you, Chairwoman Davis.
Mr. Ortega, as we know, the student bodies on our campuses
have changed dramatically over the last decade. The traditional
first time, full-time student is now the minority on campus.
Increasingly in my district, we are seeing students come
back to college or career and technical training to retool and
change their careers in response to the changing needs of their
families and also in response to the jobs available in their
local economy. One of the reasons this is happening is because
our regional economies are becoming more diverse and
specialized. Many states, including New York, where I am from,
are looking to increase job placement in key areas of growth
and need.
You discussed in your testimony how states are looking to
hold institutions accountable for the performance of specific
student subgroups in meeting the state's postsecondary
education or career goals. What do some of these efforts look
like in practice, and how are states taking into account the
unique mission and capacity of each institution and the local
community?
Mr. ORTEGA. Sure. And so I think that is one of the
situations where states are positioned advantageously with
regard to being able to make those determinations. In
Pennsylvania, specifically, it begins by the way that we go
about making meaning of the data that is presented to us. So
making sure that when something is put up front in terms of a
postsecondary educational attainment goal, what does that mean
for all the subgroups involved, new and emerging, some of them,
many of them that we have yet to even move to discover, what
does that mean for each one of those groups in relation to the
overarching goal. Which is something that we are seeing move at
a number of different states.
With regard to the system, we are really taking a step back
to say what was the system's original mission and who was it
set up to serve. So the whole idea that you have some
institutions that serve a particular group of students, in some
cases, I am going to use the example the University of
Pennsylvania and the students who enroll there, but we all have
a comprehensive state system that is supposed to serve a lot of
the underserved communities and making sure that mission
continues to be elevated and not conflated with sort of
aspirational tendencies that we have to make sure that we treat
the system all as one.
And so those are some of the things that are happening.
Also, understanding that when we talk about postsecondary
attainment that it should be inclusive of all the pathways that
are available for students at the moment when they need them.
And these are the ways that we have begun to sort of
reframe the narrative, so--that way it captures a wider group
of folks who have aspirations for postsecondary success as
well.
Ms. STEFANIK. Thank you very much.
I yield back.
Chairwoman DAVIS. Thank you.
Mr. Courtney.
Mr. COURTNEY. Thank you, Madam Chairwoman, for holding this
hearing and, again, one of the important steps toward getting a
new higher education reauthorization.
The issue regarding transparency and accountability for
for-profit institutions in particular, again, is critical for
one population--that I think a lot of us have heard about your
work on the personnel subcommittee and the House Armed Services
Committee, my friend, Mr. Takano, chairs the veterans
committee--is the veterans population. Holly Petraeus, the wife
of four-star General David Petraeus, testified before the
Consumer Financial Protection Bureau back in 2012, where she
said that for-profit institutions ``see service members as
nothing more than dollar signs in uniform.'' This morning we
have a letter from the Veterans Education Success and Student
Veterans of America, which again I would ask to be submitted to
the record, again saying how important some of the issues that
we are talking about this morning in terms of a new higher
education bill is critical to veterans so that their post-9/11
GI Bill benefits are not going to be squandered. I ask that it
be entered into the record.
Chairwoman DAVIS. Without objection.
Mr. COURTNEY. As well as two letters, comments that were
submitted to the Department of Education and the Department of
Veterans Affairs back in 2017 regarding the weakening of the
Borrower Defense Rule in the Gainful Employment Standards,
again, signed by over 30 veteran services organizations, as
well as a letter to the VA regarding the inspector general's
report at the VA that showed that the lack of enforcement on
deceptive advertising and recruiting by for-profit colleges
would squander about $2.3 billion over the next 5 years.
And again I would ask that those be submitted for the
record.
Chairwoman DAVIS. Without objection.
Mr. COURTNEY. So, obviously, an issue that we struggled
with back in 2008, the last time the higher ed bill was
authorized, was the 90-10 rule, which again basically says that
at least 10 percent of the revenue going into for-profits has
to be non Title IV moneys, Stafford loans, Pell Grant loans.
However, the GI Bill benefits were not treated as government
funds under that 90-10 rule, which is again one of the reasons
why I think Mrs. Petraeus, you know, noted that the GI Bill is
like a magnet for for-profit institutions because that counts
toward the 10 percent in the 90-10 rule.
I just would ask the witnesses to go down the desk here,
just about whether it is time to treat those government funds
in the post 9/11 GI Bill as in fact part of the government
funding that the 90-10 rule was intended so that there would be
actually real private dollars and market-based investment in
the for-profit institutions.
And I would start with you, Professor Hillman.
Mr. HILLMAN. It makes me think of two things in response.
One would be the origins of this discussion. It happened in the
1940's with the GI Bill originally and how colleges would take
advantage of students then and there were then lessons learned
through time that got incorporated into the Higher Education
Act. So this history is repeating in many ways.
But I think though the second point is that the 90-10 rule
as I understand it ensures that colleges have a diverse array
of revenue streams, and I think this differential
accountability is really important because, for example, the
state public universities have the full backing of the state,
and so to have a diverse revenue stream especially important in
this particular sector.
Ms. EMREY-ARRAS. Although we haven't done work specific to
this issue that you raise, I would point out that we have done
work looking at the experience of veterans using their GI Bill
benefits. And we did a representative sample a number of years
ago that found that many of them felt pressured, harassed, by
school recruiters and felt that they were given misleading
information.
Mr. ORTEGA. More closely that we can tie funding to
ensuring that we have consumer protections in place to protect
vulnerable populations to me is a very important step to take
in any of the recommendations that we put forward. I do feel
that in large part it is necessary for institutions who are
operating in the states to look for ways to be able to recruit
and offset costs for students. And so I feel like more and
more, as more players enter the field, the more we have to
think about putting things in place, a protection. And if that
means coupling things in policy, then I think it is something
that we should certainly consider.
Ms. EMREY-ARRAS. This is not something that our commission
has dealt with directly, but I will say that the ability of any
institution or enterprise to attract people who will pay some
of their own money to attend I think is an important indicator
of quality.
Mr. COURTNEY. Great. Well, thank you. Again, this was a
struggle in `08 and your testimony this morning I think will
help us make sure that we really have to rebalance that formula
so that it achieves the goal that, again, that Professor
Hillman described back in the origins of the GI Bill.
I yield back.
Chairwoman DAVIS. Thank you.
Mr. Timmons.
Mr. TIMMONS. Thank you, Ms. Chairwoman, and thank you to
the distinguished panel for taking the time to come before the
committee.
First question is for Dr. Hillman. Your testimony notes the
shocking number of borrowers who default within the first 5
years of entering repayment. And one correlation of high
default rates is low graduation rates.
How much emphasis should each member of the triad put on
considering college completion rates in order to improve
accountability to students and taxpayers?
Mr. HILLMAN. That is a great question. I mean college
completion is central to not just the ability to repay a loan,
but also for students to take full advantage of their full
education and thrive. So I think completion certainly plays an
important role here.
I think to me, from the research perspective, I really want
to disentangle the sort of causes of default. Like we don't
know enough about sort of the mechanisms that cause a student
to default in the first place. In the `80's there is some
research saying that default was a preexisting condition that
institutions weren't responsible whatsoever, that students were
just going to default anyway. And I think that the consensus
now is that is not the case, that there are mechanisms along
the way that can help students know how to manage their debts
better, but also be well prepared for a career that can also
pay off.
So all of those are entangled. I think part of it is
financial literacy, part of it is resources of campuses to be
able to deliver high quality education, and part of it is the
local context of labor markets. Labor market discriminations
that sometimes are outside the control of institutions. So it
is tricky.
Mr. TIMMONS. Thank you, thank you.
Mr. Ortega, it is my understanding that Pennsylvania is
currently implementing performance-based funding for new
dollars invested into the system. What outcomes are you
measuring and what was the reason the general assembly moved to
this funding model? And how are institutions reacting to the
new policy? And what will the ultimate impact be on students?
Mr. ORTEGA. Sure. So as I move into the answer, I just want
to preface it by saying that there has been some changeover in
the state system from time to time with regard to leadership,
which I think influences some of the direction that this takes.
But in terms of what outcomes are being looked at more
closely, in exchange for flexibility for institutions to be
able to implement enrollment strategies, there is a need to
make sure that in doing so, particularly when they are making
changes around tuition, et cetera, that they are held
accountable for student success goals. And in some ways this is
a way to privilege and make sure that institutions think about
this more effectively.
If I can sort of circle back to the question that you asked
to Dr. Hillman before, it seems that as we go through the
different phases of postsecondary access, we are in a phase now
that is sort of responding to an increase of influx of new
students coming into the system. And so in some ways we are now
moving to better understanding the completion agenda. This is
not to suggest that it was not something that was handled
before, but this is becoming extremely important and something
that most institutions need to move more toward prioritizing.
In some ways the diminished pool of students available to go
into postsecondary education, high default rates, rising
tuition costs, means that folks who come in and express some
motivation and interest need to be pushed to completion.
So the performance funding really privileged that aspect of
it, including how institutions are tying strategies on how they
are spending their money to the mission that has been stated
for the system at large.
So those are two examples of some of the things that come
out of this.
Mr. TIMMONS. Thank you.
And my last question is for Dr. Brittingham. One of the
complaints Members of Congress often hear from their
institutions is that accreditation takes a lot of time and is
unnecessarily costly. How do you respond to that?
Ms. BRITTINGHAM. I think a lot of what accreditation asks
institutions to do is to compile and analyze things that they
should be doing along the way. So I think some of the cost
studies that I have seen, it is not clear that they represent
the actual cost of preparing for accreditation as they do also
representing the cost of things that feed into accreditation.
And I will use the institutional research office as an example.
That is something that every institution should have good
capacity for.
I think also the volunteer structure of accreditation keeps
the overall cost much lower than it would be any other way. An
inspection system, like is run in some other countries, where
the people who do the actual visits and looking are paid civil
servants, is inherently going to be much more expensive than a
volunteer system of peer review.
Mr. TIMMONS. Sure. Thank you.
I yield back, Ms. Chairwoman.
Chairwoman DAVIS. Thank you.
Mr. TAKANO.
Mr. TAKANO. Thank you, Madam Chair.
In August 2017 the GAO released a report examining how the
Department of Education assesses the financial health of for-
profit and private nonprofit institutions in the wake of
multiple abrupt closures of larger for-profit chains.
In 2015 Corinthian Colleges, Inc. abruptly shut down
leaving about 16,000 students without many options to finish
their degrees and with large amounts of debt. Many of those
students, I would like to add, are still waiting for the loan
relief that they are entitled to under the borrower defense
rule, which this Administration was ordered to implement by a
Federal Judge in October 2018. And yet we have seen virtually
no progress.
Ms. Emrey-Arras, how did Corinthian Colleges, Inc.
manipulate its composite score to avoid sanctions from the
Department of Education?
Ms. EMREY-ARRAS. So what they did was they took out
millions of dollars in short-term loans at the end of the
fiscal year, in one case it was the last day of the fiscal
year, and then repaid it shortly thereafter at the beginning of
the next fiscal year. But the beauty of it was that they
classified this as long-term debt on their materials to
education and that enabled them to boost their composite score
and therefore avoid having to get a bank to issue them a letter
of credit, which would have given the Department money to help
pay for some of the costs associated with those student loans.
Mr. TAKANO. Oh, my goodness. Could the Department of
Education improve the composite score to avoid this type of
manipulation? And, if so, how?
Ms. EMREY-ARRAS. Yes. We think that it can definitely do
things to improve it. And I think dealing with a long-term debt
issue is a significant way to do that. There are other issues
with the score that are also faulty. I mean I think
fundamentally this is an archaic composite score. It was
created more than 20 years ago. Times have changed and the
score has not kept up with, like bad actors, it has not kept up
with changes in the financial industry, and the Department
needs to update it.
Mr. TAKANO. So is the Department open to these changes?
Ms. EMREY-ARRAS. They have--they initially were not as
open. Since we issued the recommendation, they have made some
progress in trying to implement some changes, however they
missed the regulatory deadline to create those changes and
things are still as they were. There has been no fundamental
shift in the score as of today.
Mr. TAKANO. I am disappointed to hear that.
Last year Representative Rosa DeLauro and I requested a GAO
report investigating how institutions use consultants to manage
the Cohort Default Rate, or CDR. The CDR is an important metric
that ensures institutions do not have too many students
defaulting on their student loans. And, as we know, student
loan default has a disastrous consequence for a borrower,
including damaging their credit, and in some cases leading to
wage garnishment.
Ms. Emrey-Arras, what did your report find about these
consultants encouraging borrowers to enter into forbearance?
Ms. EMREY-ARRAS. We found that for five of the nine
consultants which served 800 schools, they were really focusing
on pressuring the borrowers to pick forbearance over other
options that could have been better for them, like income
driven repayment. And some of them did that in ways where they
provided incomplete information to borrowers.
So they might, for example, send an unsolicited letter to a
borrower who is behind with only a forbearance application,
nothing else. So it was clear that they were pushing one
option. So it made it so that borrowers thought that they had
only perhaps one choice to reconcile things.
Mr. TAKANO. Why would consultants do this?
Ms. EMREY-ARRAS. They had a financial incentive. They
were--some of them were paid based on each account that they
brought current, and doing a forbearance is very quick. They
can do it in some cases in like 5 minutes over the phone, no
documentation, no application.
Mr. TAKANO. This sounds incredibly, a terrible system that
really takes advantage of students to profit for the sake of
profit.
Why are some of the tactics these consultants use to
encourage borrowers into forbearance?
Ms. EMREY-ARRAS. Well, in addition to, you know, putting
forth only a forbearance application, we found in one situation
that a consultant was out and out, lying to borrowers. The
consultant was telling them that they would lose their access
to food stamps if they defaulted on their Federal student loan,
which is just--it is not true. So that was a concern of ours.
Mr. TAKANO. So, in 2017 the Dream Center purchased Argosy
and a few other institutions from Education Management
Corporation. This required approval from accreditors and the
Department of Education.
Ms. Brittingham, why would accreditors approve this?
Ms. BRITTINGHAM. I can't speak to the specifics of that
because that happened in a different region. So I really don't
have a lot of information about that. I apologize.
Mr. TAKANO. Okay. I yield back, Madam Chair.
Chairwoman DAVIS. Thank you.
Mr. Guthrie.
Mr. GUTHRIE. Thank you very much, Madam Chair. Thank you
all for being here. Sorry I am in another hearing as well, so
going back and forth.
My first question is for Professor Hillman. Dr. Hillman, I
want to ensure students and families make informed decisions
about their education. Student loan debt has surged to more
than $1.4 trillion, surpassing both auto loan and credit card.
Unfortunately, many students enter into binding loan contracts
without fully appreciating the gravity of the financial
decision they are making and the consequences it will have on
their futures.
Last week, working with Chairman Elijah Cummings, I
introduced the Net Price Calculator Improvement Act. And I
plan--re-introducing the Empowering Students Through Enhanced
Financial Counseling Act.
So in your experience at the University of Wisconsin-
Madison's financial aid office, which financial aid practices
have been the most helpful for students in improving their
financial decisionmaking?
Mr. HILLMAN. Great question. I think two things come
immediately to mind. The first is simplicity, focusing on
simplicity. And so one thing that we did at the University of
Wisconsin-Madison was we developed what we call Bucky's tuition
promise--Bucky is our mascot. Bucky's tuition promise to assure
the students from Wisconsin whose family income is less than a
threshold--$56,000 in this case--could be assured in a very
simple way--you just have to meet that measure and get
admitted--that you could have your tuition and fees covered by
the University. And so that kind of commitment I think helps
give students some degree of assurance that they need to know
how much it is going to pay, at least on the tuition side of
the house.
A lot of non-tuition expenses, room, board, a number of
other factors here, that are hard to calculate and hard to
know. So this information--so the point here is this better
information is important to sort of get the full scope of what
else it takes to stay enrolled in college and succeed.
But I would say though that the sort of complement to this,
and the second point here, is that it is not enough to just
provide that information, you have to also let people know
about it, know how to navigate the system, and do so in a way
that is extremely supportive and takes a proactive approach.
And so just putting information out there is a necessary
but insufficient condition here.
Mr. GUTHRIE. Do you see students come in with like sticker
shock? Not that you haven't explained or let them know what,
but they show up and when they are ready to go, we didn't
realize it was going to be this expensive. I mean, as they show
up--I know they get all the information that you provide, how
much you are going to--tuition, what the family is responsible
for, those types of things, but then they show up and they
still can seem to be kind of shocked, one, that it is a loan
not a grant, after you have told--I mean after you have
explained that. Do you see that? And how can we better explain
that information?
Mr. HILLMAN. You know, I think this is a fundamental
challenge of our sort of awkward economics of higher ed finance
where you don't often times know what you pay until you are
through the system, and the longer you stay in school you got
to do these sort of exchanges every year. So there is some
volatility here that matters. But at the same time I am not
sure if I would say it was a shocker, just sort of, you know,
sort of inconsistency with respect to how expensive it really
is going to be.
I guess the point here is that across the spectrum, folks
are going to be wrong when they guess how much it costs,
because you can't always be precise. Your family situation
changes, you have health emergencies, and whatever it might be,
that could throw things off for you.
And so I think there is going to be a degree of volatility
here that is sort of baked into the system.
Mr. GUTHRIE. Okay. Thanks.
And so this is for Mr. Ortega. Following along the same
lines as Dr. Hillman, what is Pennsylvania doing to help
counsel students about Federal and state based opportunities
and obligations?
Mr. ORTEGA. Sure, sure. And so Pennsylvania is really
investing in making sure that, first of all, students are
really financially literate in terms of being able to
understand what it means to borrow student loans, but also
being able to distinguish early on the difference between need
based aid that are grants, but also the difference between
scholarships, making sure that they are equipped responsibly.
One of the interesting strategies is you move into support
staff in the educator work force, who normally folks don't
think about. Counselors are a perfect example of how you could
really begin intervening early on to provide students with this
sort of foundational knowledge when they move to decisions. But
also they are now looking into trying to create mandatory
requirements around courses that students take at the secondary
level, or the way that it is infused into the first year
experience at institutions. And so they are really trying to
make sure that information is up front.
We recently, like many states, passed what essentially is
called a loan summary notification that is given to students
every year informing them of the amount of debt that they have
accumulated up until that point. Interested in figuring out
when it goes in place how we can evaluate it to make sure it is
achieving the outcomes. But the whole idea is how much how you
can get to students, to them, that is not the technical
language that you often receive when you go to borrow your
first student loan. Something that is a lot simpler to
understand.
So, like Dr. Hillman, simplification as well.
Mr. GUTHRIE. Okay. Thank you--
Mr. ORTEGA. You are welcome--
Mr. GUTHRIE. And I have used my time, so I yield back.
Chairwoman DAVIS. Thank you.
Mr. Sablan.
Mr. SABLAN. Thank you, Madam Chair, for holding today's
hearing. Good morning, everyone.
I come from a district where we have a 2-year college and
they do offer 2, 4-year degrees in education, and business
administration. But for the most part, many people in the work
force already are taking online courses from--and I haven't yet
figured out how many are affected by the recent closing of
Argosy.
But, Dr. Hillman, thank you very much for your statement
about the correlation of--where 29 states have data systems
linking postsecondary education with K-12 in the work force--so
making it difficult for states to identify problems and
solutions for their educational needs. I am going to ask that
question of our school system, if they have that.
But, Ms. Emrey-Arras, if I have that correct. Do I have
that correct?--
Ms. EMREY-ARRAS. Yes--
Mr. SABLAN [continuing]. Let me ask you, because, you know,
the use of consultants to game the system for many nonprofits,
if that system, that game, is not available, how much worse do
you think the problem is with for-profit colleges?
Ms. EMREY-ARRAS. Well, default rates have been
traditionally higher for for-profits. I would like to say
though that we did find that it wasn't just for profits that
were hiring consultants. There were other sectors represented
as well. And we think that the metric, the Cohort Default Rate,
which is one of the government's fundamental ways of keeping
the schools accountable and having them have skin in the game,
is flawed, as demonstrated by our work. And we think it needs
to change.
Mr. SABLAN. Yes. Because, you know, as you stated in your
testimony, although a relatively small number of schools close
each year, these closures can affect tens of thousands of
students and result in hundreds of millions of dollars in
financial losses for the Federal Government and taxpayers from
unrepaid student loans.
So say the consultants, the game consultants reform in--is
taken out of the--how much more in disclosures and in terms
of--if you could answer that, I would appreciate it.
Ms. EMREY-ARRAS. I would say that there would be more
accountability and more financial controls for the Federal
Government if the financial composite score was updated as we
recommended. Because right now, one of the key tools to help
deal with closures is this bank letter of credit that schools
need to provide when they fail their composite score. And so if
the composite score is being manipulated and schools are
avoiding posting those letters of credit, then Education
doesn't have that sort of check to cash when a school goes
under and, you know, then does not have like coverage for like
potentially millions of dollars in student loan discharges--
Mr. SABLAN. Yes--
Ms. EMREY-ARRAS [continuing]. So I think one of the things
that can be done is to really shore up that metric to make sure
that the Department is able to accurately gauge the financial
health of schools and then demand that schools who are failing
the financial composite score post that letter of credit. And
they have to post a minimum of 10 percent of their Federal
student aid funds, but they can require more, depending on the
circumstances. And that can be financially helpful for the
Department to cover the cost of the closures.
Mr. SABLAN. Right. And I am actually--you know, I took note
of your conversation with Mr. Takano in saying that it takes 5
minutes sometimes for a consultant to get a letter of
forbearance or that an institution would go to a bank and get a
short-term note, loan and represent that in their balance sheet
as a long-term debt. I mean that accountant's license should be
taken.
My time is up. I do have questions that I will submit for
the record.
Thank you, everyone. Have a good morning.
Chairwoman DAVIS. Thank you.
Mr. Grothman.
Mr. GROTHMAN. Yes, first of all a question for Mr. Hillman.
You talked about that Bucky's promise and how you are making a
promise depending upon the child's family income, correct? How
do they compute that family income?
Mr. HILLMAN. I am sorry, I didn't catch the--
Mr. GROTHMAN. How do they compute the family income?
Mr. HILLMAN. This is based off of adjusted gross income
from the--off the tax forms.
Mr. GROTHMAN. Okay. If a child's parents are living
together at home then you combine the income of mom and dad and
they both count towards the income?
Mr. HILLMAN. I could confirm, but so far as I understand, I
think the answer is yes, but I can followup.
Mr. GROTHMAN. Okay. And if the parents aren't living
together, do you combine the family income?
Mr. HILLMAN. That is a good question. Yes, I don't know
those--I can followup for sure and answer.
Mr. GROTHMAN. Why don't you find out? I would like to know.
I just want to make sure we are not penalizing parents for
staying together. So can you get back to me on that?--
Mr. HILLMAN. Okay--
Okay. Now, Dr. Brittingham, as you know, dual enrollment
classes are becoming a bigger bigger thing in Wisconsin and
nationwide. And one of the problems we have over time is
credentialism for people who are teaching these students,
correct? Are you aware of that problem?
Ms. BRITTINGHAM. It's something that we look at, that is
right.
Mr. GROTHMAN. Right. And dual enrollment is a tremendous
thing. It allows people to get through college quicker, right?
Kids who participate in dual enrollment classes have a tendency
to do better, but there is a concern among both high schools
and colleges affiliated with them, as you put more and more
credentialism on some of these teachers, you begin to find a
hard time finding the teachers to teach these classes.
And I wondered if you could comment on that, or whether
there is anything you think we can do about this. I mean, in my
opinion, sometimes credentialism is meaningless, right, and it
is a shame that people are dissuaded or they find it impossible
to participate in these dual enrollment classes because of
credentialism. It might not show a teacher is better.
Do you have any comments on that or can you think of
anything we can do about it?
Ms. BRITTINGHAM. I am not sure what the long-term solution
is. It is something that our commission looks at. I think there
are variations in dual enrollment. And I think one of the
things that is greatly needed is some kind of empirical study
that follows up on these students. We have got sporadic
studies, but we really don't have a lot of information about
where the students go, how many of the credits transfer, and
can the dual enrollment be validated by the student's success
in subsequent courses. So I think there is much more to do.
That said, I think that students do benefit by having well
qualified teachers and faculty members. And I think distance
education offers us an opportunity to make sure that anybody
who is teaching a college level class is prepared to do that.
Mr. GROTHMAN. Will you agree that sometimes a master's
degree does not make you at all a better teacher?
Ms. BRITTINGHAM. Yes, alas, I would agree with that.
Mr. GROTHMAN. Yes. So do you think there is some way we can
find alternative means of accreditation to make sure these kids
are able to get into dual enrollment classes?
Ms. BRITTINGHAM. Again, I think distance education offers
us some great opportunities, both for students in high schools
to take courses offered through distance education by the
colleges in their community, and have teachers in the high
schools work alongside them perhaps. It is a problem.
Mr. GROTHMAN. Okay. Do you think it can be solved to a
certain extent by finding alternative credentialism for some of
these teachers?
Ms. BRITTINGHAM. I am not sure what you mean by alternative
credentials.
Mr. GROTHMAN. Well, maybe credentials--I mean alternative
accreditation. You know, if you could find a teacher being
accredited. Maybe right now you are requiring a masters degree,
but finding some other way to say this is a good teacher even
though they don't have a master's degree.
Ms. BRITTINGHAM. There may be. I am not aware of anybody
doing that right now.
Mr. GROTHMAN. Do you think it would be a good thing to look
into?
Ms. BRITTINGHAM. Sure.
Mr. GROTHMAN. Good. And I guess I will yield the remainder
of my time. And I will look forward, Professor Hillman, to make
sure that we are not discriminating against parents that stay
together.
Chairwoman DAVIS. Okay. Thank you.
Our next speaker is Ms. Bonamici. And after that we are
going to take a break and come back probably around 12?--after
the speech in the joint meeting with the Senate this afternoon.
So if you could just--we will try and contact you. Be sure and
have your contact numbers, Okay? Thank you so much. If you are
able to stay with us, we appreciate that.
Ms. Adams will be conducting the hearing at that time.
Thank you.
Ms. Bonamici?
Ms. BONAMICI. Thank you. Thank you to the Chair and the
ranking member and to all of our witnesses.
I am glad we are discussing this important issue. I come to
it with a consumer protection lens. I spent some time at the
Federal Trade Commission and appreciate the role of consumer
protection laws.
The triad we talked about today, I want to focus on the
role of the accreditors. Last year I expressed concern to the
Department of Education following their decision to fully
reinstate Federal recognition of ACICS, the controversial
accreditor that has now overseen several of the largest
collapses, including Corinthians, ITT Tech, ECA, the Education
Corporation of America, and just last week Virginia
International University, where they found unqualified
teachers, which they had also found in 2010 and 2014, rampant
plagiarism, and patently deficient online classes.
So these unscrupulous and unsound institutions take
advantage of too many people here in our country who are trying
to get ahead. And my concern, they have been allowed to operate
as accredited schools for too long. Some of them shuttered
without providing sufficient guidance to students who want to
continue their education. In some cases the teach-out plan was
a link to a website to another predatory for-profit college.
So given the ability of ACICS to inflict so much harm on
students I am concerned about the Department of Education's
attempt to provide more flexibility to accreditors and even
less Federal oversight through the negotiated rulemaking
process.
Dr. Hillman, accreditors have consistently missed warning
signs from for-profit colleges. I just mentioned a few,
including financial issues, lawsuits, poor outcomes. Would you
agree that accreditors need to take these warning signs more
seriously during the process and our students equipped to judge
the quality of institutions based on accreditation alone? What
else should they be looking at?
Mr. HILLMAN. Yes. To respond to the question, and what else
could they look at, I think there are examples of including
those long-term loan repayment outcomes that also seem to be of
interest to many accreditors.
Ms. BONAMICI. Thank you.
And also, Dr. Hillman, I noticed you recently published a
book, ``Accountability and Opportunity in Higher Education: the
Civil Rights Dimension.'' I chair the civil rights and human
services subcommittee here in the Education & Labor Committee.
So can you talk a little bit about--I haven't had an
opportunity to read your book--can you talk about what is the
civil rights dimension and accountability and opportunity in
higher education?
Mr. HILLMAN. This book was co-edited with Gary Orfield, the
director of the civil rights project at UCLA. And we convened a
number of authors to write about, from different angles, how
civil rights might be strengthened or eroded by our
accountability policies in higher education. And some of the
examples that we illustrate throughout the book is when we have
accountability measures that are poor measures of any sort of
performance or any accountability that can sometimes
disproportionately have negative effects for minority serving
institutions and for students--serving low income students in
some colleges.
Ms. BONAMICI. And to followup, what have you found in the
research--again on for-profit colleges there are some students
who might enter one of these institutions and then actually be
worse off after attending. What have you found about that in
your research?
Mr. HILLMAN. My review of the research is that there is
good evidence that students who participate in certificate
programs at for-profit colleges end up defaulting at extremely
high rates, half I think are some of the estimates right now.
But also that these effects last in many cases years and years
and years into their life course.
Ms. BONAMICI. So they have the debt but they don't have the
certificate or diploma.
I want to move to Dr. Brittingham. Did I say that
correctly? Something in your written testimony caught my
attention and I want to followup on it, because I found it a
bit concerning. You said in arts institution reports what
percent of students make their living from their art. As
someone who is a strong supporter of arts education, I know
that many people who study in the arts don't traditionally work
in the arts, but they may use what they learned from studying
in the arts, for example, to work for a tech company. Or around
the corner there is today there's an exhibit about innovation
in footwear design. If somebody goes to work for a footwear
company or a tech company, does that mean they didn't get a
good education at an art school?
Ms. BRITTINGHAM. No, not at all. But I think because the
mission of the art school is to prepare students in art, it is
one of the measures that they want to use.
Art schools also do other interesting things. For example,
we have one that has a relationship with a coding boot camp, so
that students who want to pursue their art on something that
may not necessarily pay very well, can have another way to make
a living to supplement that.
So we see a lot of creativity there.
Ms. BONAMICI. Terrific. Thank you.
And I see my time is about to expire. I yield back.
Thank you, Madam Chair.
Chairwoman DAVIS. Thank you very much. I want to thank all
of you for your presentations. There is a lot there for us to
work on and you have provided some very valuable suggestions
about ways to make some fixes, and on the other hand, maybe
restructure entirely to try and come up with something that is
going to work better throughout. And particularly, I think, as
you have heard, you know, the concern really is because of the
numbers, because of the data, that we want to be sure that
students who are attending for-profit colleges are getting
their money's worth and the taxpayers are as well.
So, thank you so much.
As I said, after the joint session we will convene again
and it should be, you know, in the neighborhood I think of
around 12:15 pm, so.
Thank you very much.
[Recess]
Ms. ADAMS.
[Presiding] I want to welcome everyone back to our hearing
on strengthening accountability in higher education. Thank you
all very much for joining us again.
I want to now recognize Ranking Member Foxx.
Ms. FOXX. Thank you, Madam Chairman. And I want to thank
our witnesses for being here today. This is an issue that we
are all very much concerned about and it is an issue that is
getting a lot of attention.
But I have to be honest, I have been very disappointed in
what I have heard from my colleagues in what was supposed to be
a bipartisan hearing. So I would like to take a step back from
all this partisan dialog here and remind my colleagues why we
are here and why we are holding this hearing--at least why I
thought we are having this hearing.
I thought we were here for students. We want to make sure
there is accountability in how institutions are serving
students. It is too easy to group bunches of institutions
together and say these schools aren't serving students. But in
reality, we are talking about people's lives. Every student
that isn't served well is a life that is losing time, losing
potential, losing its impact. That is why we are here. These
individuals are the reason we should be here. And to sit here
and grind a tired old ax against certain types of institutions
you don't like is just disgraceful. This should be a
conversation about all students, all institutions, all taxpayer
dollars.
We need to look at some stats. College X has a graduation
rate of 44 percent and its graduates make an average of $34,600
after they graduate. College Y has a graduation rate of 10
percent and its graduates make an average of $28,700 after
graduation. College Z has a graduation rate of 27 percent and
its graduates make an average of $31,300 after graduation. In
my examples, ECPI, a 2 year for-profit is College X. Hudson
Community College is a 2 year public school and that is College
Y. And Savannah State University is a 4 year public. And if my
colleagues on the other side of the aisle want to talk about
protecting taxpayer dollars, we should be talking about
protecting all taxpayer dollars, which includes the
approximately $50 billion a year public--public institutions
across the country get from the hardworking taxpayers in their
states in addition to the $76 billion taxpayer dollars at the
Federal level. Approximately 20 million lives are at stake
here. And for a majority of this population, if they fail, the
chances are small that they will ever try again.
Therefore, it is really disappointing that my colleagues
have spent the entire hearing talking about a sector that
enrolls only approximately 10 percent of the total population.
I have said from the beginning of our process that
postsecondary education systems are not serving students well.
And that is what we need to be talking about in these hearings.
And that is why we need comprehensive reform.
I thought there was bipartisan agreement around the idea of
wholesale reform, but I am now seeing that really that isn't
the case and that is a true shame.
Dr. Brittingham, I would like to ask you a question. Can
you provide the committee with more information about how
graduation, retention, loan default, and loan repayment rates
will be used as part of your organization's review process? Why
did your agency decide to undertake this effort and what
successes have you seen from it so far? To what extent are
other crediting bodies beginning to use the student outcome
metrics in their respective processes?
Ms. BRITTINGHAM. Thank you. I think first of all, all of
the regional accreditors use them but probably in somewhat
different ways. Our commission has looked at financial
information on loan defaults for probably 7 or 8 years now. We
write institutions that meet a trigger that we have set that is
far more conservative than the ones set by the Department and
ask them to explain what they are doing to help lower the
student default rate.
The last couple of years we have started looking at student
repayment rates. You have heard before that student loan
default rates can be ``jiggered'' shall we say, although I have
no evidence that has happened at our institutions, but the loan
repayment rate is cast in a more positive way because it means
students are making at least minimum progress on repaying their
loans.
I see I have run out of time. Okay. And the rest was on
retention and graduation rates. A couple of years ago the
regional accreditors together decided to look at institutions
with low graduation rates. So we looked at 2 year institutions
that had 3 year graduation rates at or below 15 percent and 4
year institutions that had 6 year graduation rates at or below
25 percent. We each did it a little bit differently, which lets
the approaches converge. You can find the report on our
website, which is C-RAC.org, C-RAC.org. In New England we wrote
each of those institutions, there were 28 of them, and we asked
them to each write a short report explaining were the data
correct, what else did they know about student retention and
graduate rates, what were they doing to help improve those
rates, what did they know about how effective that was, and
what else were they planning to do. I think those were all very
informative. Almost all of them were community colleges and
adult serving public institutions. We had some followup with a
couple of them. We learned some things, including I would say
the great importance of local institutional research capacity
to help institutions understand where the students are having
problems.
Ms. FOXX. Thank you. And thank you, Madam Chairman, for
your indulgence.
Ms. ADAMS. Thank you very much.
Let me just respond real quickly. Due in part to these
differences in structure and incentives, for-profit colleges
and institutions have consistently worse outcomes. For example,
only about a quarter of students enrolled at for-profit
colleges complete a bachelor's degree within 6 years compared
to 59 percent at public and 66 percent at nonprofits. Among
students enrolled in 2 year programs, those attending for-
profits are nearly 4 times as likely to default on their loans
compared to their counterparts at community colleges.
Let me now recognize Representative Jayapal.
Ms. JAYAPAL. Thank you, Madam Chair.
Last month I met with students from a for-profit college in
my district called the Art Institute of Seattle. After 73 years
in operation, the school shut down just 2 weeks before the end
of the quarter because Wall Street investors who had taken over
its management had suddenly decided it was no longer
profitable. And I heard heartbreaking stories from multiple
students who didn't even know whether their credits would
transfer. In most cases it sounded like they wouldn't transfer,
including one who was just seven credits short of a degree and
had actually transferred from another investor owned school
that also shut down abruptly. All of them are getting zero
support from this Administration as they face the difficult
decision between attempting to transfer or applying for a loan
discharge for, in some cases, tens of thousands of dollars. In
this case, and unfortunately in so many others, Federal student
aid dollars have benefited the rich and the powerful more than
they have helped students.
So let me start, Dr. Hillman, with you. Nonprofit and
public schools are required to spend all of their money towards
education. Are for-profit schools different?
Mr. HILLMAN. Yes, for two reasons. The first is the
economics of nonprofit organizations have a non distribution
constraint, so all the money has to go to the mission, not the
shareholders. That is one. I think the second is more of an
empirical one. When colleges spend more money on students, on
student support services, they see positive outcomes.
Ms. JAYAPAL. So in the case of for-profit entities, the
interests of the shareholders are coming before the interests
of the students. Would you agree with that?
Mr. HILLMAN. I don't think I would agree wholesale. I think
that there is truth to that.
Ms. JAYAPAL. Great. Thank you. And when profits--in my
view, that is what I see happening, and I accept your answer--
when profits come before students my concern is that the result
is lower completion rates, higher default rates, and higher
costs for comparable public programs. So nationwide, just 9
percent of students attend a for-profit program, but the
schools account for 34 percent of the students that default on
student loans.
And what is more, data from the Federal Reserve Bank of New
York's research and statistics group and the National Bureau of
Economic Research suggests that on average students attending
for-profit programs earn no more than if they had attended no
school at all.
So given the very clear differences in cost outcomes and
default rates between for-profit and public and nonprofit
schools, does it make sense, Dr. Hillman, to have a one size
fits all accountability system? Or does it make more sense for
for-profits to undergo a higher level of scrutiny?
Mr. HILLMAN. I think an answer to that would be it is going
to depend on policy goals, first of all. But I would say that
differential accountability is a strength of the current
system. I think that my understanding of a rationale for
differential accountability is that in the public sector public
colleges have the full faith and credit of their state. For
example, they have oversight coming from other places and other
governance agencies that are accountable to public and elected
officials. And I don't see the same governance structure in the
for-profit sector. And I say that reason alone would warrant
differential accountability.
Ms. JAYAPAL. Thank you. I am particularly concerned about
how the lack of accountability for for-profit colleges
disproportionately affects people of color. So while black and
Latino students make up 36 percent of all students enrolled in
college, they actually make up more than half of undergraduates
at for-profit colleges. So black and Latino students at for-
profit colleges pay more than twice as much as they would to
attend a public 2 year college and leave with $10,000 more debt
on average.
Dr. Hillman, how does the overrepresentation of students of
color at for-profit institutions contribute to racial
inequality and the wealth gap?
Mr. HILLMAN. It certainly contributes. I think that those
proportions that you just referenced are very important to keep
in mind, both on the front end of the wealth inequality that
requires particularly black families to borrow at higher rates
than any other groups. And then it has downstream effects as
well in terms of the fragility of the black middle class, as
some of my colleagues, Fennaba Addo and Jason Houle, would say.
So I would be happy to connect you with some folks who are
doing really good research in this area.
Ms. JAYAPAL. That would be great.
And maybe in my last 40 seconds or so, if you could give me
some sense of how we ensure that we are protecting all students
that go to for-profit colleges that receive Federal aid, and
particularly students of color, do you have suggestions for
this committee around that?
Mr. HILLMAN. I do. And I am happy to continue the
conversation. I think that two important ones I think are core
here. One is thinking about the capacity and the sort of
operations that happen at a college. I think that different
processes have different outcomes for students. And so caring
about that matters. But I also think that getting measurements
right, accountability measures right is also going to matter
here.
Ms. JAYAPAL. Thank you. I so appreciate that. And, Madam
Chair, I think we should be looking at whether this predatory
industry is deserving of Federal aid at all.
Thank you. I yield back.
Ms. ADAMS. Thank you. I went to recognize Representative
Omar at this time.
Ms. OMAR. Thank you, Chairwoman.
So I just kind of wanted to follow with what my colleague
sort of was reviving here. Dr. Hillman, you mentioned in your
testimony that some colleges and universities conserve to
reproduce and reinforce inequality. As my colleague alluded to,
black students are three times more likely to complete a
college degree program within 6 years at a public college
compared to black students attending a nonprofit--for-profit
college. Latino students 6 year graduation rates at public
colleges are twice that of their peers at a for-profit college.
Student debt outcomes for students attending these schools are
worse as well. For-profit colleges account for more than one-
third of all student loan defaults, which is 34 percent, even
though students attending these schools make up only 9 percent
of the total postsecondary enrollment.
So I wanted to know, do you not agree that the Department
of Education has a duty to protect the students and taxpayers
from bad actors in higher education and that we should be
holding some of these for-profit colleges accountable for their
student success?
Mr. HILLMAN. Yes. I think, to also qualify this, I think
that even in the public and nonprofit sectors I would imagine
they would say we would welcome accountability as well. So that
context I hope is helpful.
Ms. OMAR. It is. And I am just wondering what kind of
accountability measures do you think would be useful in holding
some of these bad actors accountable?
Mr. HILLMAN. That is a great question. I think that is one
that is certainly on the table and I would love to explore
options. I feel like there must be some things that are working
well now that could maybe be enforced and maybe there are ideas
that are happening at the state level or in other places that
could be incorporated into some of the Federal responses.
Ms. OMAR. Do you not agree that for-profit colleges
disproportionately prey on low income students and students of
color?
Mr. HILLMAN. I think there is good evidence that has
happened. And, again, I don't think that wholesale I wouldn't
say that is the case across the board, but I would say there is
certainly evidence to support that and I think that is a
priority for students of color in particular and for consumer
protection in general.
Ms. OMAR. And do you not agree that Congress should ban all
Federal funding to for-profit colleges or institutions where
the governance and structure allows for a profit motive to
affect institutional decisionmaking?
Mr. HILLMAN. That is a great question. I think, again, you
have got the policy goals of your committee to prioritize, but
I would say there is a case to be made.
Ms. OMAR. Students that enrolled in for-profit colleges
that closed experienced falsified job placements statistics,
low quality programs, and predatory lending practices. And so I
would ask do you not agree that these students should be
awarded full and immediate student debt relief?
Mr. HILLMAN. I think situations--it is going to be
situational. But I think the spirit of that, yes, I would agree
that is fair.
Ms. OMAR. I appreciate that. We heard at the last hearing
on college affordability that college degrees continue to be a
great investment for most students. However, there are
distressing signs that some institutions and programs leave
students with debt they can't repay. The Obama Administration
sought to protect consumers from such programs with its gainful
employment regulations, which was finalized in 2014. That
regulation set debt to earnings threshold that institutions had
to meet and required disclosures to ensure that prospective
students know what they are getting for their money.
Although the rule is still in effect this Education
Department is no longer implementing that rule because it
served a working relationship with the Social Security
Administration, the agency that provided the data after DeVos
violated the Privacy Act last year.
What can you tell us about these programs that leave
students with unmanageable debt?
Mr. HILLMAN. I think there are at least two ways to think
about unmanageable debt. It is sometimes low levels of debt
that really matter for students. And we might not think that
$5,000 is a lot of debt, but it could be very unmanageable for
families or individuals. And just on the opposite end, it could
be loads of debt that also is unmanageable. I think that in
both cases there are concerns about downstream effects of this
financing model that we have chosen to use in our higher ed
system of having to be based on loans and credit.
Ms. OMAR. Yes. So 98 percent of the failing programs were
offered by for-profit colleges. And so when we are talking
about predatory practices it is one that is concerning. And I
hope that we will spend a little bit more time on this
committee exploring that and figuring out how we hold these bad
actors accountable and assure that students have access to the
kind of education that they deserve.
Thank you and I yield back.
Ms. ADAMS. Thank you. Thank you very much.
I want to recognize Mrs. Lee now.
Ms. LEE. Thank you, Madam Chair, and thank all of the
witnesses for being here.
As you know, we have this very pressing issue with for-
profit colleges that aggressively target veterans and their GI
benefits, as was explained here earlier today with the 90-10
rule loophole. And this issue hits particularly close to home
for me and my district and my state of Nevada. In fact, when I
first came to Congress I had the unique privilege of bringing
Sergeant Isaac Salvadar as my guest to the State of the Union.
Sergeant Salvadar had served in the Marine Corps, he was
deployed to both Afghanistan and Iraq, and now he helps other
veterans stay active as a coordinator for Merging Vets program.
But right after his military service he had returned to
Vegas and enrolled in a for-profit college. When he was just
three classes away from graduating the institution closed,
causing him to lose those 2 years of GI benefits. Very
devastating.
Dr. Hillman, I wanted to ask you, if we were to close this
loophole, how would this impact institutions, but also how
would it potentially help students, veterans like Isaac?
Mr. HILLMAN. So good question. And I am not sure I have a
full answer and I would be happy to followup.
It seems though, my intuition would be that it would be
beneficial in the long run for students to be at institutions
that have a diversified revenue stream because I think that
institutions might have incentives to serve students better
when they have a wider range of revenue streams and people are
accountable to.
Ms. LEE. Thank you. So help me understand this. If these
for-profit institutions, they have a fiduciary responsibility
to their shareholders, not necessarily to the public. They are
overwhelmingly reliant on Federal funds. So why would we let
them continue on with business as usual? And then do you think
there is any drawback for students in closing this loophole?
Mr. HILLMAN. I would be happy to followup on that one as
well. My instinct is to say that if the outcomes are desirable,
and if they are getting good outcomes with that situation, then
I would say maybe it would be less of a concern.
Ms. LEE. As, you know, we have this conversation today
about strengthening accountability, I think it is imperative
that we emphasize and highlight student outcomes and whether or
not we are positioning our students for success. And along
these lines, when we think of promoting students' best interest
in terms of trying to reduce higher debt burdens and default
rates, I believe we have to assess the personal profit
incentive of some of these privately held for-profit
institutions.
I mean, just as an example, the CEO of ITT Tech, now the
defunct for-profit chain, earned nine times the salary of the
president of Harvard University while relying on 100 percent of
Federal aid programs for revenue. What are your recommendations
or thoughts on requiring for-profit colleges to disclose salary
incentives and other bonuses for leadership members at these
companies?
Mr. HILLMAN. This is not something I have put much thought
into. I don't feel totally prepared to respond to that.
Ms. LEE. Is there any other witness who would like to
respond?
No? Okay. Dr. Brittingham, in the past 6 months colleges
owned be ECA, Vatterott Colleges, and the Dream Center closed
leaving over 140,000 students stranded. In most cases the
creditors overseeing the institutions failed to secure teach-
out agreements that would have provided these students options
to transfer despite many of the warning signs.
During the midst of the Dream Center closure I was deeply
concerned regarding the status of the Las Vegas Art Institute,
which affects many students in my district. Specifically, in
the case of the Institute, that if it did close, where would
these students go to resume their course of study. Many of
these students have families and the question I keep thinking
about is whether they would be able to find local institutions.
Some accreditors have sought teach-out plans which do not
translate into anything meaningful for students without this
agreement in place.
Can you tell us what the appropriate point for an
accreditor to request colleges to submit teach-out agreements
is?
Ms. BRITTINGHAM. I can tell you what we do. And I do want
to take the opportunity to say that my colleagues and I are
available to any members of the committee and their staff if it
would be helpful for us to come in and talk with you when we
are in Washington.
We were not directly involved in the Dream Center. We had
one previous institution that was owned by EDMC and they
decided to close it and taught it out all the way in the Boston
area before. So I really can't respond to that.
I will respond when we have institutions that--if the
commission has to ask them to show cause for probation or
termination we will ask them to submit a teach-out plan, which
is what would you do. And as things get worse we ask them for
teach-out agreements. A good teach-out agreement takes some
while to do. And so as your question suggests, you can't wait
until the minute to ask for the teach-out agreement.
Ms. LEE. Great. Thank you.
I yield.
Ms. ADAMS. Thank you very much.
I want to yield at this time to Representative Levin. You
have 5 minutes, sir.
Mr. LEVIN. Thank you so much, Madam Chairwoman. And I thank
all four of you for sticking with us. In retrospect maybe we
should have invited you to get to watch the speech of Jens
Stoltenberg, the Secretary General of NATO. That is why we
left. And it was an inspiring shot of bipartisanship and we had
a great time cheering for him. He gave a great speech.
The Education Department, I think we all agree, has a duty
to protect students and taxpayers from bad actors in higher
education by holding institutions accountable for their
students' success.
Under Secretary DeVos the Department has proposed several
versions of regulations that would allow colleges to outsource
huge swaths of programs to unaccredited, unaccountable
providers. Although the Department's most recent proposed
changes set some sort of a threshold for the amount of
instruction that can be outsourced to other entities, students
could be paying to attend a university without even knowing
that significant parts of their programs are being provided by
an unaccredited, unaccountable entity without any experience or
expertise in teaching and learning.
These unaccredited providers would not be subject to the
few laws and rules that we do have to protect consumers. They
could operate completely in the shadows without any of the
transparency or accountability required of colleges and still
access taxpayer dollars.
This proposal sounds like a shell game, at least to me.
Dr. Hillman, do you think this type of outsourcing might
weaken or undermine the rules and framework Congress has put in
place through the program integrity triad?
Mr. HILLMAN. Yes.
Mr. LEVIN. Are you aware of this and, you know, what is
your thought?
Mr. HILLMAN. Yes. My understanding is that a key part of
the triad is the accreditation process. And if that is--
Mr. LEVIN. Right.
Mr. HILLMAN. If that is taken off the table then, yes,
there would be concerns about that as a professor.
Mr. LEVIN. Accreditation decisions have significant
consequences as to whether a school can continue to get Federal
financial aid. I worry that too often accreditors identify
problems and raise concerns about institutions internally, only
to leave students in the dark.
In a distressing number of recent cases, some of which have
been referenced by my colleagues here this morning and early
this afternoon, it seems that accreditors and colleges know
about dire financial problems well before students do.
So I wanted to ask you, Ms. Emrey-Arras, about this 2014
GAO report that looked at accreditors' use of adverse actions.
Do you find that accreditors commonly take action when a school
has poor student outcomes?
Ms. EMREY-ARRAS. No. We found no relationship actually
between the student outcomes and the sanctions, like
terminations or probations, that accreditors took. So in
contrast to the financial side of the house, where if a school
had poor financial metrics, the accreditors were more likely to
be on them with sanctions. There was no relationship when it
came to the quality side of the house with student outcomes.
Mr. LEVIN. So do you have recommendations for us on this?
Ms. EMREY-ARRAS. We did have multiple recommendations in
that report. I think one of the ones that remains open that the
Department has not implemented is to actually look at that
sanction data when it is in the process of recognizing
accreditors, because that is valuable information that they can
use to assess are accreditors doing their jobs.
So if you have, for example, an accreditor that is only
sanctioning, I don't know, maybe 2 percent of their schools, it
could raise questions about whether or not they are
appropriately holding schools accountable.
So it is not the only piece of information to look at, but
it is something definitely to be mindful of.
Mr. LEVIN. Thank you.
More than 30 states currently use some kind of performance
based funding. These funding systems are designed to reward
colleges for achieving desired outcomes, like increasing the
number of degrees awarded or achieving a high graduation rate.
But they often fail to address underlying differences in
resources, missions, and student bodies.
Now, congressional Republicans in the Trump Administration
are pushing a similar model at the Federal level through
various risk sharing proposals.
Dr. Hillman, I understand you have done a lot of research
in this area. Can you tell us about the impact that performance
based funding models have had on equity in higher education?
Mr. HILLMAN. Yes. On equity there are two things that come
to mind. But I would preface all of this by saying there are 30
different models, 30 different designs. It is going to vary
from state to state and within state.
Mr. LEVIN. Right.
Mr. HILLMAN. But there are a couple of new very recent
studies showing that colleges that have the most resources tend
to be the colleges that get the most money from its funding
model. So I am worried about sort of the rich getting richer in
a sense in that space.
And I am also concerned about some of the metrics that are
used and whether or not they paint a fair picture of what
happens in a lot of minority serving institutions and broad
access colleges.
Mr. LEVIN. Okay. Well, we would be very concerned if HBCs
and others and community colleges and other schools that serve
poor communities were--you know, lost out in this.
So, all right. Well, I guess my time is up.
Madam Chairwoman, thank you very much. I yield back.
Ms. ADAMS. Thank you very much.
I want to recognize Representative Trahan.
Ms. TRAHAN. thank you, Madam Chair.
Good afternoon. As students and their families prepare to
enroll in college they face mounting costs without any
guarantee on their return on investment. They are making one of
the most expensive important decisions of their lives, but they
have very little information to make an informed decision.
Federal websites, like the College Scorecard, provide data
for Federal financial aid recipients, but leave out students
who go to college without debt. And Federal graduation rates
consider only first time, full-time students, a measure of
traditional students who represent a shrinking share of the
student population.
Mr. Hillman, how can the Federal Government provide better
information to students and their families so that they know
what they can expect out of college before taking on tens of
thousands of dollars in student debt?
Mr. HILLMAN. One would be measures of not just averages but
distributions I think is incredibly important when sharing
information with students to say that it is--you know, your
average income might be $30,000 but that distribution around it
also really matters. So I think that putting information out
there that helps paint a very full picture is important, and
especially when that information is disaggregated by race,
class, gender, for example.
I think that putting information out there alone serves an
incredible value, but it also passively doesn't do as much as
it could when there is a proactive connection between a human
and an advisor or a coach or something helping students make
sense of that data or that information.
Ms. TRAHAN. Does anybody else want to add anything to that?
I know that--well, just in general, additional data that could
be useful for students who are making decisions, you know, on
where to go to college or what to study.
Mr. ORTEGA. I am happy to provide a little bit more
context, sort of from a state college access campaign
perspective.
I think we have gotten really good at explaining to
students what the transactional outcomes are from postsecondary
education and often fail to take a step back to begin to think
about how you can help them cultivate a successful
postsecondary guidance plan as they move through K-12 and exit
into postsecondary. We tend to elevate important careers in
front of them, but we forget to explain all the details around
becoming informed about all the necessary steps to take.
And I think when we think about comprehensive guidance
planning in that way, from the state level, I think it puts
students and family in a position to make better decisions.
But I say that not wanting to put all the onus in educator
professionals in the K-12 space. I feel like gatekeeper folks
from higher ed institutions need to play a very similar role
and not just see their task as recruitment, application, yield,
and enrollment, but more of a guidance, a counseling sort of
role as they begin to recruit students, and particularly those
that serve some of the historically underrepresented students
as well.
Ms. TRAHAN. Great. Thank you.
One of my colleagues had mentioned that, you know, the
education path has changed dramatically. Not everyone is going
to a 4 year college and signing up for this college experience.
And so given that postsecondary students are changing, millions
of college students are low income, students of color, working
adults, caregivers, immigrants, et cetera, they don't fit this
traditional student mold, which is full-time, transitioning
directly from high school to a 4 year university. It concerns
me that states and accreditors are not held more accountable or
doing enough to provide these types of students with their
return on investment.
And so I am wondering, Ms. Emrey-Arras, given these
demographic trends, what can the Federal Government do to
clarify data measures, that are used as accountability measures
for institutions of higher ed, and to be more inclusive of
those who don't fit this traditional mold?
Ms. EMREY-ARRAS. We have not done work specific to the
measures. And I understand, you know, the concern about, for
example, graduation rates being first time, full-time, and the
like. I would say that our work at GAO is now focusing a lot on
these populations of older students.
We recently did some work around food insecurity for
college students and the fact that many students on campus go
hungry, and the ways that they could access food support
through the help of the Federal Government. And we also have
some ongoing work looking at student parents and their access
to Federal student aid.
So we are definitely focused on this population.
Ms. TRAHAN. Great. Thank you.
Madam Chairwoman, I ask for unanimous consent to enter a
letter from the Project on Predatory Student Lending, which is
an organization that defends and represents students against
the predatory for-profit industry, into the record.
Thank you.
Ms. ADAMS. Without objection, so ordered.
Ms. TRAHAN. Great. I yield back.
Ms. ADAMS. Thank you.
I now recognize myself for the purpose of asking some
questions. And thank you again to all of the witnesses.
A report by the Center for American Progress found that
while regional accreditors collect a lot of data on student
outcomes, they rarely use it in a review to--or final decision
to accredit an institution. Too many institutions have
performance gaps by race and income.
Dr. Hillman, should members of the triad be concerned with
outcomes by race, ethnicity, income, and gender?
Mr. HILLMAN. Yes, in general. And specifically, when it
comes to the sort of value added of a college, it is really
important to be able to look at a wide range of outcomes and
increasingly that matters on the lines of race and class.
Ms. ADAMS. Thank you.
Dr. Brittingham, your agency is one of the only agencies to
collect data on student loan repayment rates from the college
scorecard. Can you explain how your agency uses this
information along with other metrics in reviews?
Ms. BRITTINGHAM. Thank you. This is the first year that we
tried this on an experimental basis, because we have been
looking at loan defaults, so now we are looking at loan
repayments. And the experts around the table for our committee
agreed, and the commission agreed, that we should also look at
loan repayment rates. Institutions are asked to write a brief
report. And so it isn't just us looking at the numbers, it is
listening to the institutions through the papers that they
write about how they see the information, what they are doing
to improve, to forestall loan default, and to improve loan
repayment rates.
Ms. ADAMS. Thank you. There are 101 accredited historically
black colleges and universities. We refer to them as HBCUs in
our country. And what I have learned from a majority of them--I
had the pleasure of teaching at one of them, Bennett College
for 40 years in Greensboro, North Carolina--one of the things
what I have heard from a majority of them, especially one in
particular, are stories regarding inequities in the
accreditation system. If you talk to presidents, some of them
of HBCUs, you might hear one of the following: that the peer
review process allows too many personal biases to enter the
process and have negative impacts, especially for small, low
resource institutions. You might hear that standards are
applied without consideration of institutional size, resources,
or endowments, requiring institutions with minimal resources to
be evaluated using the same criteria as some of the other best
endowed institutions in the country. Or you may hear that
accreditors tend to shift what is required of institutions and
serve a distinct mission on sanction, leading to a belief that
when institutions reach a state of extreme difficulty in
meeting the standards, the accreditor would rather remove them
from membership instead of providing them with additional
opportunity to rectify these issues.
Dr. Brittingham, given your role with the New England
Commission, can you please share with the committee your
response to these stories that our HBCUs have experienced with
their accreditors?
Ms. BRITTINGHAM. Well, thank you. As you know, New England
does not have any HBCUs, but we do have financially fragile
institutions, public and private institutions. And I think the
role of the accreditor is to certainly approach each
institution without bias, to be fair, to listen, but to think
about the importance of resources not in and of themselves, but
for the stability of the institution and the ability of the
institution to continue offering a good education for students.
So while we look at the numbers, I think it is also
important to think about what is the trajectory, what is being
reduced or cut, or what is not being made available to
students, and is that institution still able to offer a quality
education to the student.
Ms. ADAMS. Do you believe that accreditors should face
consequences when they don't do their jobs?
Ms. BRITTINGHAM. I am sorry, when they don't what?
Ms. ADAMS. Do their jobs.
Ms. BRITTINGHAM. Yes.
Ms. ADAMS. Okay.
Ms. Emrey-Arras, how can the Department conduct better
oversight of accrediting agencies?
Ms. EMREY-ARRAS. One of the things that they could do, for
example, is to use that sanction data and then compare it to
the outcome measures that we have been talking about in terms
of students. So they could look at whether the accreditors are
actually doing their jobs and holding schools accountable for
poor student outcomes.
Ms. ADAMS. Thank you very much.
Before I yield I want to ask unanimous consent to insert
into the record a letter from the Center of American Progress
on the role of accreditation and ensuring that all students
have access to a high quality postsecondary education.
And now I would like to yield to Representative Castro.
Mr. CASTRO. Thank you, Chairwoman. Thank you for all your
testimony today.
My question is about how we break up the work-school tug of
war that you see a lot of students going through where they
cannot afford to simply go to school, so they have to work. Yet
they have to work so many hours that it essentially impacts
their ability to go to school and to finish in a reasonable
amount of time. And ultimately what I have seen so often is
that work wins out and people end up dropping out of community
college or a 4 year university, and many of those folks never
go back to finish off. And yet they are saddled with the debt
that they undertook when they went to school.
What new approaches--and I guess let me also preface that
by saying when I was in Texas I was vice chair of the higher
education committee for 4 years and I saw, Mr. Ortega, that you
worked in Texas for some time. And we encountered this issue
again and again because students will often make their
decisions based on cost, but if you make your decision based on
cost our community colleges are cheapest, but they also have
the lowest completion rates as compared to other universities.
So what do we do about those conflicting issues there and
challenges? And what are we doing, what should we do?
Mr. ORTEGA. I am happy to chime in. I feel like the
assumption that you shared with us right now in terms of
students having to take on jobs, you know, in order to be able
to afford education is one that we have known for some time.
And for some reason we seem to not be able to adapt to that in
the culture of colleges and universities.
In some ways, you know, a lot of the concerns I have heard
raised here about the emergence of new players in the for-
profit sector, into that area, has been largely driven by the
fact that institutions have not been able to meet those needs
of new populations, what I think is the new traditional student
coming into colleges and universities. And it is a terrible,
terrible injustice. I think we need to do more to break the
traditional structures of higher ed and offer more
opportunities for students. And you don't see a lot of that
happening.
And I think that is why it is easy for folks, particularly
historically disadvantaged students of color in particular, to
seek out those opportunities that get offered by in some cases
even unaccredited institutions. I think we need to do better
about being able to make sure that the traditional sector
begins to adapt and creates spaces for these students to come
in there.
Mr. CASTRO. Well, because often folks that will go to the
for-profit institutions are left with a lot of debt, and
sometimes they can't find jobs either.
Mr. ORTEGA. Right.
Mr. CASTRO. Please.
Mr. HILLMAN. I would only add that in this context, in this
specific situation, geography matters a lot more than sometimes
we--in at least the academic side--give credit for. And so
place matters incredibly. And so looking at the sort of choice
set locally for individuals to even know if there is a college
nearby, or what they are, is really important here.
Ms. BRITTINGHAM. I think a lot of the challenge for some
people returning to school is that institutions haven't always
been maybe as good as they could be about making the schedule
of classes predicable for students. And if somebody has a job
where the hours of work are unpredictable and the class
schedule is unpredictable, that is a really hard thing.
So we see many community colleges, for example, following
something that is called guided pathways, which is designed to
increase the predictability of offerings and also help students
kind of narrow their choices to kind of make it easier for
them.
Mr. CASTRO. And how much progress have we made also on
articulation agreements among universities and community
colleges?
In Texas, part of the challenge you have is that locally
and regionally the agreements are usually pretty strong, but if
you tried to go from a community college in San Antonio to a
university in Dallas, there is not necessarily much
coordination or is not as much as you would like. And so, you
know, people end up going to school for 2 years and they get
credit for a year and a half or a year and a quarter, or
something and they have just lost out on all that time and
money.
Ms. EMREY-ARRAS. I would add we have done some work at GAO
on credit transfer issues and articulation agreement issues and
one of the challenges is that while schools are required by
statute to provide that information to students, they are not
required to do so on line. So we actually made a recommendation
to the Department of Education to require schools to post there
articulation agreements on line so that students would have
access to that information.
Mr. CASTRO. Thank you.
I yield back, Chair.
Ms. ADAMS. Thank you very much. I want to thank all of the
witnesses as well.
I want to remind my colleagues that pursuant to committee
practice, materials for submission for the hearing record must
be submitted to the committee clerk within 14 days following
the last day of the hearing, preferably in Microsoft Word
format. The materials submitted must address the subject matter
of the hearing and only a member of the committee or an invited
witness may submit materials for inclusion in the record.
Documents are limited to 50 pages each. Documents longer than
50 pages will be incorporated into the record via an internet
link that you must provide to the committee clerk within the
required timeframe. Please recognize that years from now that
link may no longer work.
Again, I want to thank Dr. Brittingham, Mr. Ortega, Ms.
Emrey-Arras, and Professor Hillman for your valuable
participation today. What we have learned certainly has been of
great value to us.
Members of the committee may have some additional questions
for you and we ask the witnesses to please respond to those
questions in writing. The hearing record will be held open for
14 days in order to receive those responses.
I remind my colleagues that pursuant to the committee
practice witness questions for the hearing record must be
submitted to the majority committee staff or committee clerk
within 7 days. The questions submitted must address the subject
matter of the hearing.
I now want to recognize the distinguished ranking member
for his closing statement.
Mr. SMUCKER. Thank you, Madam Chair. I would like to thank
the witnesses for their insightful comments and for the
discussion this morning.
This is certainly an important conversation. We believe
this conversation about accountability and about rebalancing
the triad is critical to a future of students all across the
country. And so it is not a dry subject, as had been mentioned.
This is important for the country and for so many students.
We very much appreciate your time and devotion to making
sure that students are receiving a high quality education to
prepare them for a lifelong success.
I do, Madam Chair, have just--I want to make comments on
two specific themes that have come forward in the hearings and
then I will have a few documents which I will ask unanimous
consent for to submit into the record.
No. 1 is the issue of for-profits that we have heard from
multiple times throughout the hearing and I will just say that
I think we all agree that there are bad actors, there are
schools that have--we have seen false marketing, we have seen
price gouging, we have seen inaccurate employment prospects,
but, you know, this is across all segments and all sectors of
schools. And so, you know, what I want to be sure that we are
thinking about is that we are not maligning an entire group of
schools that truly are serving students and serving them well,
and that we are not allowing some bad actors to sort of poison
the whole segment that is helping students. And I know it is
helping students because I have talked to many students in my
district who have attended for-profit schools--maybe it was a 2
year school, whatever it may have been--and who are now engaged
in careers as a direct result of that education that they have
received.
So I just want to caution that we should be very careful
that we are not removing opportunities that are available for
students.
I mentioned I have talked to students, there are also a
number of studies on this topic. I would like to ask for
unanimous consent to submit into the record a study that was--
it is entitled ``Toward a Better Future: Exploring Outcomes of
Attending Career Colleges and Universities''. This was done by
Gallup.
Ms. ADAMS. Without objection, so ordered.
Mr. SMUCKER. And just a very brief highlight of this. It is
a study that was done for the Association of Career Education
Colleges and Universities, which are for-profit schools. Again,
as I said, done by Gallup. And just there are some important
findings that are worth reviewing.
But, you know, one that I think is critical is the finding
was that the majority of all alumni are satisfied with both the
education and training they received from their school and how
well the school prepared them for their career and would
recommend the schools to others.
So, again, I would like to submit that to the record.
Ms. ADAMS. Without objection, so ordered.
Mr. SMUCKER. Thank you. And then there was an article in
The Hill just I think yesterday, this one is by Daniel Elkins,
and he is the legislative director of EANGUS, which is the only
group organized to specifically represent the interests of the
enlisted men and women of the National Guard since 1972. It is
entitled ``We Must Support Veterans and Politicize their
Education''. This is I think a good summary of his views on the
for-profit sector as well.
So I ask that we can submit that to the record.
Ms. ADAMS. Without objection, so ordered.
Mr. SMUCKER. And then the other issue I would like to
address was the--there was a comment made earlier in the
hearing in regards to the effect of public aid on tuition
costs. And, you know, we know that as the Bennett Hypothesis.
It has been around for a long, long time. But a comment earlier
specifically said that only applied to the nonprofits and not
to the public schools. I have two studies--and the offer was
made that we should review that together, and I think it is an
excellent discussion to have.
So in the interest of doing that, there are two studies
that I would like to enter into the record that address this
issue. The first, Madam Chair, is ``The Bennett Hypothesis
Turns 30'' by Jenna Robinson.
Ms. ADAMS. Without objection, so ordered.
Mr. SMUCKER. And the second is done by the Federal Reserve
Bank of New York in 2015 and then revised in February 2017
called ``The Credit Supply and the Rise in College Tuition:
Evidence from the Expansion in Federal Student Aid Programs''.
I ask that we--
Ms. ADAMS. Without objection, so ordered.
Mr. SMUCKER. And just, again, a few comments. The first
study that we submitted into the record reviewed--it is an
analysis really--reviewed 25 studies on the Bennett Hypothesis,
and of those reviewed the clear majority of the reports, 14 of
25, found some affect on Federal subsidies, on the price of
higher education in at least 1 segment of the higher education
market. For example, a 1998 study showed that public colleges
and universities increased tuition by $50 for every $100 in
aid. And a 2015 study showed it is even more than that. They
found a pass through effect on tuition of changes in subsidized
loan maximums of about $.60 on $1.00.
So I believe that the Bennett Hypothesis merits further
consideration and debate as we continue to talk about the best
way to hold all actors--all actors accountable for taxpayer
dollars.
And, finally, billions of hardworking taxpayer dollars
finance postsecondary education every year. We have been
talking about this. Yet, as we learned from the GAO's
testimony, the accountability process today can be ineffective
and is outdated.
Dr. Brittingham provided a fresh perspective on the good
work accreditors can do to measure institutional outcomes as
well as inputs. Still, more can be done to align incentives so
that colleges and universities share in the risk of financing a
student's education.
Institutions today are largely immune to consequences as
long as their students do not default in massive numbers. Any
bill to reform the HEA should consider how students, how every
institution, and the Federal Government can work in concert to
ensure high quality education and a return on investment for
all stakeholders.
So, again, thank you to each of the witnesses for being
here today. I think it was an excellent discussion and I look
forward to continuing this.
Ms. ADAMS. I want to thank the ranking member.
And let me just comment. We are aware of the Gallup study
published in coordination with the Trade Association of For-
Profit Colleges. The report is full of flawed methodologies and
our staff would be happy to share those concerns.
Now, I would like to recognize myself for the purpose of
making my closing statement. And let me again thank all of the
witnesses for being with us today and dedicating their time and
energy to this important discussion. It is one that I continue
to be concerned about, having been an educator for many, many
years.
I want to clarify for the record though on what bipartisan
means. It means that the majority and the minority have
negotiated all witnesses and negotiated the topics discussed.
It does not mean that members on either side should temper or
otherwise alter his or her questioning to avoid exposing areas
of legitimate policy disagreement. There are areas of
legitimate agreement, but the role of for-profits is not one of
them. If Republicans and Democrats were on the same page on
for-profit companies we would not have to have dueling bills
during the last Congress.
Our members are hearing from constituents who were impacted
by these bad actors and Democrats are here to fight for them,
not protect certain sectors to achieve bipartisanship. I had a
situation in my district, in Charlotte, with the Charlotte
School of Law. Many, many students suffered because of that
relationship. A strong accountability for our colleges and
universities is vital to ensuring quality higher education for
our Nation's students. But there are differences between
institutional sectors that we cannot ignore. The data show us
that while, yes, for-profit colleges enroll just 9 percent of
students, these companies account for 34 percent of student
loan defaults.
Thus it is important that we understand where the problem
lies to create the appropriate solution. For example, when two
planes crashed recently, did we ground all air travel? No, we
did not. We looked at the type of planes that had the problems
and we grounded those. And when there is a house on fire, do we
ask the firefighters to spray water on all the houses in the
neighborhood? No, they spray water on the burning houses and
they do what they can to help the individuals inside that
house. And as we talk about accountability, it is imperative
that we focus on the institutions where the outcomes are the
most devastating.
But, as we have heard today, the Trump Administration has
reduced information available to students making it harder for
students to make informed decisions about where to enroll. This
Department of Education has failed to implement Obama era rules
established to protect students from low performing
institutions. And it has shrinked its responsibility to hold
predatory institutions responsible for their actions. This
Department's actions solidify an ecosystem of waste, fraud, and
abuse.
The accountability triad the Department of Education, state
authorizers, and accreditors, can only uphold quality standards
if all the entities do their part to improve oversight and
transparency.
For too long lax accountability measures have failed to
catch unsustainable low quality schools that put students and
taxpayers at risk. Fraudulent for-profit schools have
flourished while devastating students and taxpayers. From
preying on veterans to abusing Federal aid money, these for-
profit institutions continue to target vulnerable students
while leaving them with worthless degrees and crushing debt.
And as this committee considers a comprehensive
reauthorization of the Higher Education Act, we must take steps
to strengthen all parts of the accountability triad and restore
the integrity of our higher education system. The Aim Higher
Act, H.R. 6543, introduced last Congress, was comprehensive,
and it focused reforms to strengthen accountability across the
board. I am happy to send a copy of the bill to the Republican
staff if interested.
The reforms we included would strengthen the Cohort Default
Rate to flag chronologically negligent schools, it would close
the 90-10 loophole to prevent for-profit colleges who
aggressively lure vulnerable student veterans at the taxpayers'
expense. It would ensure that for-profit schools seeking
nonprofit status cannot skirt accountability rules just by
changing a tax designation on paper. It would require
accreditors to set standards and be transparent with the public
about those standards, and, most importantly, we hold the
Department of Education accountable for working on behalf of
students, not companies.
No matter the party affiliation, I hope that we can all
agree that the time for action is now. We cannot let Dream
Center School or Corinthians College waste precious taxpayer
dollars, or subject students to financial and emotional peril.
Now, I would like to ask unanimous consent to enter into
the record the following letters on the need for strong
accountability in higher education. A letter from the Center
for Law and Social Policy on strengthening accountability for
all students, a letter from Dr. Denisa Gandara on state
performance based funding models, a letter from the Institute
for College Access and Success on the Cohort Default Rate and
gainful employment regulation, a letter from the National
Consumer Law Center on protecting student borrowers, and a
letter from the National Association for College Admission
Counseling or incentive compensation.
Seeing no objection, so ordered.
So I look forward to working with my colleagues to find
solutions that, as Mr. Ortega urged, will strengthen the
accountability of this great system of higher education and
ensure the highest quality of postsecondary opportunity for all
members of society.
If there is no further business, without objection, the
committee stands adjourned.
[Additional submission by Ms. Adams follows:]
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[Additional submission by Mr. Courtney follows:]
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[Additional submission by Chairwoman Davis follows:]
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[Additional submission by Mrs. Foxx follows:]
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[Additional submission by Mr. Smucker follows:]
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Credit Supply and the Rise in College Tuition: Evidence
From the Expansion in Federal Student Aid Programs: https://
www.govinfo.gov/content/pkg/CPRT-116HPRT38005/pdf/CPRT-
116HPRT38005.pdf
[Additional submission by Mr. Takano follows:]
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[Additional submission by Ms. Trahan follows:]
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[Questions submitted for the record and their responses
follow:]
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[Ms. Brittingham response to questions submitted for the
record follow:]
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[Ms. Emrey-Arras response to questions submitted for the
record follow:]
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[Mr. Hillman response to questions submitted for the record
follow:]
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[Whereupon, at 1:22 p.m., the subcommittee was adjourned.]
[all]