OPENING STATEMENT OF THE HON. HOWARD P. "BUCK" MCKEON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA *

OPENING STATEMENT OF THE HON. DALE KILDEE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA *

OPENING STATEMENT OF THE HON. WILLIAM F. GOODLING, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA *

STATEMENT OF HON. CHAKA FATTAH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA *

STATEMENT OF MS. NORINE FULLER, DIRECTOR OF GOVERNMENT RELATIONS, FASHION INSTITUTE OF DESIGN AND MERCHANDISING, LOS ANGELES, CALIFORNIA *

STATEMENT OF DR. NEAL MALICKY, PRESIDENT, BALDWIN-WALLACE COLLEGE, BEREA, OHIO *

STATEMENT OF DR. DIANNE G. VAN HOOK, SUPERINTENDENT/PRESIDENT, COLLEGE OF THE CANYONS, SANTA CLARITA, CALIFORNIA *

STATEMENT OF MR. RICHARD TURAN, PRESIDENT, BRIARCLIFFE COLLEGE, BETHPAGE, NEW YORK *

STATEMENT OF MR. IRV BODOFSKY, DIRECTOR OF FINANCIAL AID, STATE UNIVERSITY OF NEW YORK, SYRACUSE, NEW YORK *

STATEMENT OF DR. SHIRLEY A. R. LEWIS, PRESIDENT, PAINE COLLEGE, AUGUSTA, GEORGIA *

Appendix A – THE OPENING STATEMENT OF THE HONORABLE HOWARD P. "BUCK" McKEON, A REPRESENTATIVE FROM THE STATE OF CALIFORNIA *

Appendix B – THE WRITTEN STATEMENT OF THE HONORABLE CHAKA FATTAH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA *

Appendix C – THE WRITTEN TESTIMONY OF MS. NORINE FULLER, DIRECTOR OF GOVERNMENT RELATIONS, FASHION INSTITUTE OF DESIGN AND MERCHANDISING, LOS ANGELES, CALIFORNIA *

Appendix D – THE WRITTEN STATEMENT OF DR. NEAL MALICKY, PRESIDENT, BALDWIN-WALLACE COLLEGE, BEREA, OHIO *

Appendix E – THE WRITTEN STATEMENT OF DR. DIANNE G. VAN HOOK, SUPERINTENDENT/PRESIDENT, COLLEGE OF THE CANYONS, SANTA CLARITA, CALIFORNIA *

Appendix F – THE WRITTEN STATEMENT OF MR. RICHARD TURAN, PRESIDENT, BRIARCLIFFE COLLEGE, BETHPAGE, NEW YORK *

Appendix G – THE WRITTEN STATEMENT OF MR. IRV BODOFSKY, DIRECTOR OF FINANCIAL AID, STATE UNIVERSITY OF NEW YORK, SYRACUSE, NEW YORK *

Appendix H – THE WRITTEN STATEMENT OF DR. SHIRLEY A.R. LEWIS, PRESIDENT, PAINE COLLEGE, AUGUSTA, GEORGIA *

Appendix I – THE WRITTEN STATEMENT OF THE HONORABLE MARGE ROUKEMA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY *

 

Thursday, June 5, 1997

House of Representatives

Subcommittee on Postsecondary Education, Training and Life-Long Learning

Committee on Education and the Workforce

Washington, D.C.

The subcommittee met, pursuant to call, at 9:30 a.m., in Room 2175, Rayburn House Office Building, Hon. Buck McKeon [chairman of the subcommittee] presiding.

Present: Representatives McKeon, Goodling, Petri, Roukema, Barrett, Graham, Peterson, Deal, Riggs, Kildee, Roemer, Woolsey, Romero-Barcelo, Fattah, Hinojosa, Tierney, Sanchez, and Ford.

Also Present: Representative Norwood.

Staff Present: George Conant, Majority Professional Staff, Sally Stroup, Majority Professional Staff, Pamela Davidson, Majority Legislative Assistant; David Evans, Minority Professional Staff.

Chairman McKeon. Good morning. I'd like to take a moment to welcome the witnesses who have agreed to appear before us today, and to thank a member of the subcommittee, our colleague from the 2nd District of Pennsylvania, Representative Chaka Fattah, who will be testifying on a proposal he has for the Pell Grant Program.

I'd also like to recognize two of our witnesses from my home State of California, Dr. Dianne Van Hook from the College of the Canyons, and Ms. Norine Fuller of the Fashion Institute of Design and Merchandising.

Today, we will hold the first of several program-specific hearings in Washington, D.C. to bring together experts from across the country and hear their views on the Higher Education Act.

The subcommittee has jurisdiction over the Higher Education Act, and we have a great deal of work ahead of us. As many of you know, the Higher Education Act is scheduled for reauthorization during the 105th Congress, and in general terms this means the committee will be making determinations as to the effectiveness of the existing programs, as well as the need for other programs which address specific problem areas. One of our primary goals throughout the entire process is keeping college affordable for students and families.

Since the early 1980s, the price of college has spiraled at a rate of two to three times that of inflation every year. According to a recent General Accounting Office study between 1980-'81 and 1984-'85, tuition at four-year public colleges and universities has increased 234 percent, while the median household income rose 82 percent, and the consumer price index rose only 74 percent. As a parent of six children, two of whom are currently enrolled in college, I am well aware of what it costs a family to pay the college bills.

Our job in Congress is to improve on what is already working for students across the country, eliminate programs which are not working, and do it all in a way that ensures that precious taxpayer dollars are spent wisely.

Today's hearing will focus on the Pell Grant Program and the Campus-Based Aid programs, which consist of Federal Supplemental Education Opportunity Grants, or SEOG, the Federal Work Study Program, and the Federal Perkins Loan Program.

I like to think of the Pell Grant as one of those Republican ideas that was actually thought up by a Democrat. I say this because Pell Grants are truly a voucher program for higher education. They follow the student, and if a school wants any part of the money, it must compete to get it. Pell Grants are targeted to the neediest students and provide the foundation of our federal financial aid programs.

The Campus-Based Aid programs -- the SEOG, College Work Study, and Perkins Loan, are also need-based programs designed to help financially disadvantaged students. However, the Campus-Based programs give schools some discretion in making financial aid awards. Using the Campus-Based programs, financial aid officers can tailor a financial aid package of grants, loans, and employment opportunities to the students' particular circumstances.

Our witnesses today have hands-on experience with our system of higher education, whether it is ensuring the smooth functioning of a college or university for the leaders of tomorrow or making certain that our students receive the financial help they need to pursue a postsecondary education. They are the true experts on higher education, and I look forward to hearing from them.

Chairman McKeon. Mr. Kildee brought me in an apple this morning.

[Laughter.]

I guess that's fitting for our Committee on Education. He said he's buttering up the Chairman. I thought that.

[Laughter.]

We really have a great time together, and I have really enjoyed working with Dale. I think we're going to have an exciting time as we move forward in this program, and we'll turn the time now to him for his opening statement.

Mr. Kildee. Thank you very much, Mr. Chairman. I did bring you that apple. You're a good friend and a good chairman, and I've really enjoyed working with you. And if the Republicans want to claim paternity for the Pell Grant, we'll give you that, as long as you pay full child support.

[Laughter.]

Mr. Chairman, as you know, support for both the Pell Grant and the Campus-Based Aid programs approached consensus proportions during our field hearings. Time and time again we heard the plea that these programs should not only be continued but also strengthened by increased funding.

Given that situation, I believe it is very significant that our first Washington, D.C. hearing on reauthorization should be on these important programs, and I commend you for that focus.

I look forward to Mr. Fattah's testimony with great interest. I have cosponsored that legislation because I believe it delivers a most important message to young people from disadvantaged backgrounds. That message is if you work hard and excel, if you remain in school and satisfactorily complete your secondary education, the doors of opportunity for a college education will swing wide open.

The Fattah bill establishes a solid linkage between secondary and postsecondary education that I believe is absolutely necessary. The leaders of America's growth industries have been telling us for years that students need at least two years of education beyond high school, and it is time that we heed this call for action. Mr. Fattah's bill would certainly move us in that direction.

With respect to the Pell Grant and Campus-Based Aid programs, I am already solidly on record in support of expanding and strengthening these important endeavors. I am deeply concerned by the enormous borrowing that is going on and by the terribly high debt students are amassing as they pursue a college education. One of the best ways we can address this situation is to put more money into Pell and Campus-Based programs, and I am for that without question.

I can remember full well, as you have heard me mention before Mr. Chairman, what the GI Bill of Rights did for the east side of Flint where I was raised. No one really went to college, unless they were going to the seminary and trying to be a priest, until the GI Bill of Rights came along. That was one of the greatest investments this country ever made, and I think that we should look upon anything we spend for education as an investment.

I thank you again, Mr. Chairman, for not only this hearing but the great hearings we have had throughout the country. I look forward to working with you as we continue on this reauthorization.

Chairman McKeon. Thank you very much.

We have with us today the Chairman of the full committee, Mr. Goodling, from Pennsylvania. We'll turn the time to him for an opening statement.

Mr. Goodling. I just wanted to say that I've been with Mr. Kildee a long time, I’ve worked with him and never brought me an apple. But then he knows I can't be bought.

[Laughter.]

Mr. Kildee. Well, you grow apples on your…

[Laughter.]

Mr. Goodling. For my colleague from Pennsylvania, of course, I have a lot of interest in what he would like to do. As I indicated to the President, you don't give hope to seniors in high school or freshman in college. That hope has to be earlier.

I want to steer it all away from some kind of entitlement program, and so I'm trying to use the ingenuity of all of these high-paid staffers that we have on both sides of the aisle to come up with something very successful along those lines.

I don't want to take away the thunder of those who are going to testify later, and I haven't read your testimony yet, but please don't say that the reason costs have increased so dramatically is because there aren't enough grants and enough loans out there, and, therefore, we have to have a sticker price for those who can pay, and high enough so that we can then have a discounted price for those who we need to get to fill our dormitories and classrooms, and so on, because I really don't believe we have anything to do with that. I've heard that so many times.

We finally had one President who said, ``We got rid of sticker prices and discount prices. We discounted all of the prices. And now we have so many applicants we don't know where to put them all. We can't begin to take them.'' So maybe he has something that he can share with others.

So if I've messed up any of your testimony that you're going to give later on, I'm sorry. I have another meeting and won't be here to hear it, but I will read your testimony to know what you have said.

Thank you.

Chairman McKeon. Thank you very much.

Now we'll turn to our first witness, Mr. Chaka Fattah.

Mr. Fattah. Thank you, and let me thank the Chairman for this opportunity to suggest publicly my appreciation for his willingness to be concerned about the proposal that we put forward. And I want to thank the ranking member and the Chairman of the full committee, who visited with me in my district to meet with a number of people interested in the higher education reauthorization.

But let me not spend all of my time on those niceties and spend much of it on talking about the proposal that is embodied in H.R. 777. First of all, there are many members of the Education Committee who have cosponsored the bill, and I want to thank them. Many others have indicated a significant interest in the concept. It is one that is borne out of my own experiences.

I served as the Chair of the Executive Committee of our state's Higher Education Assistance Agency, the PHEA Program in Pennsylvania, and I have also served as a member of the Board of Trustees of many of our universities back home in Pennsylvania -- Penn State and Temple, Lincoln University, Community College of Philadelphia, and have had a lot of background dealing with making sure that access is available to Pennsylvania students to higher education.

This proposal is a simple one and will take young people who are mired in lives of poverty and provide for them a guarantee that if they were to do their part through middle school and high school that there would be a guarantee that access to higher education would be real for them. It is really not a new idea. It's not one that I have come up with. I think the Chairman can appreciate that this really is, in many ways, a private sector idea. It has been tried around the country by people like Eugene Lang in New York.

In my district, many of our schools have been beneficiaries of this type of program in which individuals have come forward promising to sixth grade graduating classes the opportunity of college if they would strive towards academic excellence. And it has had enormous benefits for these young people in populations making something less than 13 percent of them that would normally go on to college, more like 60 to 85 percent.

In one case, a Philadelphia program, the Philadelphia Futures Program, out of 500 students guaranteed college assistance, not one dropped out of high school and all went on to higher education opportunities.

So the proposal embodied in this legislation is that we would take a group of elementary schools, those in which 75 percent of the families are at or below the poverty level in this country, we would promise to sixth grade graduates a maximum of Pell Grant for a minimum four years, and to offer to them the opportunity not to address their immediate problems, but that if over the next six years of their lives they, in essence, pay first through their effort and their hard work in overcoming obstacles that we all realize exist in their neighborhoods and in their particular circumstances, that we would, in fact, make sure that they have the opportunity to pursue their career aspirations.

So that is the essence of the proposal. It would guarantee to low income students something that the Congress intended to provide to them anyway, which is a Pell Grant, which is our primary vehicle to assist low income students matriculate into higher education. But it would promise them that at a time in which their course selections, their academic work would be important in terms of preparing them to be able to go on to school.

On yesterday we may have noted that the best teachers in our country said that the number one problem in many of our schools was the lack of motivation of students, and that we had to do something to encourage students.

I noted in the Chairman's home state that in today's Education Week there is an indication of an early intervention program in California now to reach out to middle school and high school students. So I think we all know the direction that we need to head, and I do think that this linkage is important. What it does in lives of young people who may be cynical because of their circumstances is that it provides a real indication of hope and possibility related to their own individual effort and individual willingness to take responsibility to prepare themselves for a future that will be important to not just themselves and their family but for the entire country.

We're talking about, in many cases, you know, for those who graduate from college, we're talking about a lifetime earnings increase of, you know, $600, 000 to $1 million over their lifetime. And not that we want to focus entirely on the earning capacities of these young people, but the poverty that they are growing up in should not be a poverty of spirit. And I think that this program would, indeed, provide hope.

And I appreciate the opportunity to present it in this formal way to the committee and would be willing to answer any questions of members of the committee.

Chairman McKeon. Thank you very much.

I agree with your goal of giving disadvantaged students an incentive to excel in school. I had the experience last week, I went back to the high school that I graduated from. It's still there. That was this century.

But I spoke to a leadership class. There were about 30 students in the class. I asked them first where they came from, because this is a school in the L.A. city, L.A. Unified School District, which has about 600,000 students, and they bring them from all over the district.

I'm wondering how that would fit in here where you're talking a school with a 75 percent poverty rate. The student might come from a poverty area into a school that maybe doesn't have that poverty rate. Maybe you could refine that some way, tying it to the student rather than to the school that he attends.

Mr. Fattah. Well, I think that there are opportunities for us to modify the proposal in a number of ways. But the rationale was simply not to exclude students but to figure out where a good starting point might be.

Chairman McKeon. Right.

Mr. Fattah. There are schools that the federal government now recognizes as federally mandated Title I schools because of the aggregation of poverty, not just the individual incidence of a child who comes from an impoverished circumstance, but the fact that we know well in all of the research that has been done that there is a combination of problems that are associated in environments in which the majority of the students come from families well below the poverty line.

So the reason why we started there was we figured that that would be a basis from which we might all, we could all agree that that would be a good starting point, not that we would want to limit it, but as in all matters we have to find some way to appropriately administer the program. We thought this would be a good place to start.

I want to tell you that there has been significant interest from your side of the aisle, and I do appreciate the fact that not only yourself but others have shown interest. Members on the Republican side of the aisle have even cosponsored the bill. I don't think that this is something that we can't find some way to work through some of these issues.

There are other ways that we could target children, either through school lunch eligibility in terms of that would indicate their income or some other manner other than the location of the school or the impact, but I think that it was among all of the choices available to start out a new effort, this might be one in which we could arrive at a shared consensus.

Chairman McKeon. I asked the students, after finding where they came from and, they graduate in a couple of weeks, I asked how many were going on to further their education. Three raised their hands and said they were going to community college. One raised his hand and said he was going to an art and music school in Wisconsin. So four out of about 30 were planning of furthering their education. I asked the rest what they planned on doing and just got blank looks.

Finally, after a little prodding, one of the students said she just wanted a break. I said, ``A break from what? A break from school? A break from work? A break from life?'' I think, really, there was a real lack of ambition, a lack of hope probably because they didn't maybe understand or maybe felt like there was no way they could go to school anyway, so why even try. That was unfortunate, so I spent the rest of the time trying to motivate them to have some hope that they could go on and perhaps change their circumstances.

I recall back to myself at that same time when I had a couple of weeks left to graduate, and if somebody had come in and asked the question, I probably also would have been one not raising my hand, because at that point I didn't plan on going. In those days, it was easier to get into school. I think our decision was made over that summer, and at my mother's prodding I started school that fall and was the first from our family to have the opportunity to go to college, and still am the only one that graduated.

But I like what you are trying to do here, and I think there will be things, just as we have that problem in L.A. unified with people that are bused to all different areas of the city, it is difficult to make a decision out of Washington impacting all of the country. But I think that your idea has good merit, and we will continue to work with you as we go forward with process.

Mr. Fattah. I appreciate that, Mr. Chairman.

Chairman McKeon. Thank you.

Mr. Kildee?

Mr. Kildee. I thank you, Mr. Chairman.

Before I get started, I'd like to acknowledge the presence of Sara Davis in the audience, with Sallie Mae now, but formerly a staff member on this committee. I say that because in the 104th Congress she did enormous work on the IDEA bill, and I noted your presence at the White House yesterday during the signing ceremony. We appreciate everything you have done for this committee. Thank you very much, Sara.

Mr. Fattah, as you know, I strongly support the TRIO programs. In my city of Flint, it has been a really enormously successful program. I have seen individuals who I know would have gone that way rather than this way, which is the good way, were it not for the TRIO programs. Can you tell us how your proposal would affect or be related to those programs such as Upward Bound and Talent Search?

Mr. Fattah. Well, I think that one of the things that we would hope and that we've laid out in the bill is that we would have this group of what would be termed 21st Century Scholars be eligible for assistance through those programs. Those programs do a terrific amount of work on behalf of uplifting the spirits and vision of these young people, and that this proposal is really aimed at doing the same but for a broader number of students, hopefully.

This would be the first time for almost all of these young people that they got a real indication that their lives and life chances were valued. That is to say that people really had expectations that they could achieve, and we think that that would be a natural method to also tie them into TRIO. We know that in most of the successful programs it is not just a commitment of financial assistance to going to college. It is also the mentoring and the counseling that goes along with it.

So we have to find ways to build that bridge between what would be a financial commitment, making these students eligible for Pell, to also tie them into TRIO and other efforts to focus them. What is important here is that we know that if someone is going to matriculate successfully in college that their course selections, as early as middle school, and definitely at the high school level, is critical. And I think TRIO and Upward Bound and other programs help make the case that there is work to be done on both sides of this issue.

Mr. Kildee. A couple of years ago I visited the elementary school in my neighborhood where I was raised, and it's interesting, I ran into a second grader, he was in a lunch line. I went over there for the school lunch program. And he came by, and he knew I was a Congressman, he wasn't sure whether I was a Congressman or the President, but he knew I was somebody from Washington…

[Laughter.]

…and he said to me, ``I'm the best reader in the second grade.'' And so I really felt very good that he had that confidence. And his teacher said, ``Indeed, he is.'' Then she gave me some of the background of the family and the situation. His mother had been murdered. She lived on the same street I lived on. And then you wonder, what can we do to make sure that kid who was the best reader in second grade keeps that hope? That was very important.

I always remember that kid, and he is in fourth grade now. I keep track of him. We want to make sure we have programs so that those who need and want education, not only for themselves but can so they contribute to this whole country by being educated can have an education if we have programs like this one.

I'm going to ask you a question just to get it on the record. Some would say your legislation simply creates another entitlement. Would you care to respond to that?

Mr. Fattah. Well, I think that, firstly, when we talk about Pell as a non-entitlement program, we miss the point that a Pell functions as an entitlement today. That is to say that there is no young persons eligible that has not received assistance. And in the case where we would not have the financial resources, we have always, as a country, through supplemental appropriations, made those dollars available. So that Pell, in essence, today, even though it's a non-entitlement part of the budget, functions as an entitlement.

My suggestion is that it makes little sense for us as a Congress to hold out Pell as a vehicle for low income students to go on to college when, in fact, a lot of these students will, through the choices that they make, not knowing about Pell, not having a sense of what is possible, many of them will drop out of school, whether in L.A. or in Philadelphia or in New York, or wherever the case may be. A lot of these young people make other choices, become pregnant as teenagers, get involved in juvenile delinquency.

And that what I'm hopeful for is that we could use Pell as a motivating force, and that even though we would be promising these dollars six years in advance of when they would be eligible to utilize them, that that in and of itself would let them know that indeed there is something at the end of the line if they are willing to proceed forward.

And I'm sure there are ways for us, from a technical sense and we've had a lot of discussions with staff and with people in the Department of Education about how it might be possible not to technically have this be an entitlement, but to function as Pell functions now, which is that it basically provides the resources for young people to go to college for those who are eligible.

All we're saying is that we want to remove any cynicism from the lives of young people who have every reason to be cynical anyway. So the less small print, the better, when it's really kind of a clear-cut commitment that if they, indeed, do their part through six years of effort, that at the end of that, different from other social programs, we would pay after they have paid and have been successfully admitted into college, which I think was the goal of the Congress when Pell was set up.

Mr. Kildee. Thank you very much, Mr. Fattah, and I look forward to working with you.

Thank you.

Chairman McKeon. Thank you.

Mr. Petri?

Mr. Petri. Thank you.

Thank you for your testimony and the idea. We do have Pell Grants already, and you pointed in your testimony to some of the sort of private challenge programs. We've read about them in newspapers and how successful they are. Is the key here basically changing the psychology in the situation?

Mr. Fattah. Yes. We had a situation in my district at the Belmont School. George and Diane Weiss came in and promised a graduating class of sixth graders that if they made it to college they'd pay the freight. It's a wonderful program for those 112 children at the Belmont Elementary School.

What I'm suggesting, however, is that in those isolated instances, whether one school in my district or one school in New York City, that what we that that's wonderful for those children who are impacted, but that we really need to change the norm, so that we're not dealing with some isolated group of children, but that we're trying to uplift the aspirations of an entire generation of children who are born into poverty.

But as you know and I know, there is no reason for them to carry that into future generations. That if they were to prepare themselves appropriately, take advantage, even in the worst schools, there is learning that takes place every day by children who are motivated.

We did a study in Pennsylvania where we studied the reasons why young people chose to go on to college or not. We found that it wasn't financial. That was the second issue, not the first. Parental attitude was the first. Many of the parents of low income children don't have the belief that they're ever going to be able to afford for their kids to go to college. They don't, you know, provide the kind of cheerleading that normally goes on in middle class households every day in our country.

This program that we are suggesting would, in fact, let everyone know: the teacher, the parent, the child, and everyone else in that community, that that child's future is valued, and that we would hope that they would take advantage of it.

Mr. Petri. Back in our part of the world, unfortunately, there is an old saying, ``I'm from the government, and I'm here to help.'' There is a certain amount of cynicism toward government programs, and many of these people are already involved in a lot of government programs and this would be one more government program. So I would challenge you to try to figure out how to make it different.

Would the idea of partnering or having a challenge grant to local people saying if they put up some money and they get involved with these kids we'll guarantee the Pell Grants money, would that help leverage it? I mean, I think the fact that someone comes in that people feel is making a promise that they are personally committed to psychologically makes a difference rather than it being someone who is just perceived to be a case worker or a school administrator or whatever.

However well meaning we are out here we've got to change the psychology and get real human beings involved that will stick with the kids. Does that make sense?

Mr. Fattah. I understand the spirit of your question, and I think that there would be opportunities to build on this. But the effort, as I've outlined it, would not be a government program. In essence, it would be an inspiration to the individual. That is to say that we would be telling this young person who at sixth grade is I think quite capable of understanding it that there are thousands of dollars available for them to go on to college.

Now, they have six years to make themselves into a student that a college would want to admit, and so that in many ways we're thrusting upon the individual the responsibility to prepare themselves without the unnecessary clutter of a lot of intervening forces. And we're promising them something that is already a program that they would be eligible for anyway if just the span of six years were to be closed.

But what we're trying to do is to give them foreknowledge and a way in which their choices from that point forward would be changed by the fact that they know something that we already know, but that we are making it very real to them in a way in which they could understand it and therefore act on it.

Mr. Petri. But I think it might make sense for the committee to get a hold of five or six or however many makes sense of people around the country who have done this sort of thing and get them to advise us on how we could help spread it, so that we wouldn't destroy the spirit that has been effective with kids where this has succeeded.

Mr. Fattah. Okay.

Chairman McKeon. Thank you.

Ms. Sanchez?

Ms. Sanchez. Good morning, Mr. Fattah.

Mr. Fattah. Good morning.

Ms. Sanchez. Mr. Chairman, before I ask my question, I would like to inform the committee that I will be submitting information I gathered at the congressional forum I held in my congressional district on May 27. I was joined by Congressman Esteban Torres, Congressman Howard Burman, and Congressman Gary Condit.

My colleague on this subcommittee, Congressman Rubin Hinojosa, was scheduled to attend but was unable to make the trip. We heard from over 20 witnesses. These included students, parents, administrators, and teachers, and each of them implored this subcommittee to protect student financial aid programs, including the subject of this morning's hearing, Pell Grants.

I will be submitting their statements to the subcommittee for inclusion in the official hearing record created for the reauthorization of the Higher Education Act. I might add that within Orange County itself we had representative from presidents all the way from a four-year private Christian university to a two-year community college, so we had a wide array of people all imploring us that lower income students need Pell Grants and other forms of aid in order to make it through the system.

Mr. Chairman, I also informed the witnesses that I intend to fully carry out my congressional duties as a Member of Congress, a member of the full committee, and of this subcommittee, and I will not permit the people of California, Orange County, and my congressional district from being disenfranchised by partisan politics.

The educational needs of students is critical to the future of this country. It was unfortunate that actions taken by the leadership of this subcommittee against me could have deprived students and educators in Orange County from expressing their concerns about financial aid and access to higher education. But fortunately, Mr. Clay and Mr. Kildee and others on this committee assisted me on holding the forum on higher education, and we learned important information that I will share with the subcommittee.

I thank my colleagues on the subcommittee that had the courage to support me.

Now I'd like to talk a little bit about Pell Grants, because, of course, I am a Pell Grant recipient myself. That's the way that I went through college. As well as being the first graduate from college from my family, my other six brothers and sisters are also graduates of universities, all receiving Pell Grants and attending universities all the way from Cal State Fullerton, UCLA, USC, Stanford University, a wide array of colleges.

So I know how important Pell Grants are, especially to those in lower income areas. And considering my district has probably about a 90 percent below the poverty line for most of the students who attend K through 12 there, Pell Grants and this program you're talking about, Mr. Fattah, is very important to children who exist in Orange County.

I myself think that programs like these are great. In fact, we started a program called Kinder Coming Up in my district. It's a program where we take pre-kindergartners to their first day on the community college campus. We take them and we take a parent, because most of these parents have never been to a college campus before, and we put in their minds from a very early age that, in fact, college is a place that accepts them and it's where they should be.

I understand that this is a great problem to have, but I'm a little concerned about the fact that if we do have a high retention rate on these children and they in turn, have the ability to get these Pell Grants, what would you suggest would happen to the budget 10 years out or 15 years out when we have right now we have a 40 percent dropout rate, for example, in some of the schools in my district.

What would you say to the fact, I mean, that we may increase our costs? I mean, it's a great problem to have if we're investing in education, but we've seen in prior years that sometimes this committee is not that fortunate to increase funding to education.

Mr. Fattah. I think it's a legitimate point, because we know that this type of effort will be successful. I mean, that is to say that the difference between a new idea and an idea that has already been tried is that you have some research that you can hold on to. And we've seen that larger numbers of low income students will go on to college.

I testified before the House Judiciary Committee under Chairman Hyde the other week, and we were dealing with a different subject, which is the fact that in some states, like in New York, are now spending up to $84,000 a year to incarcerate juveniles in detention facilities.

So it would, I think, cost us more if we had to spend $3,000 or $2,700, or whatever the maximum Pell Grant would be six years from now on a child going to college, but we have to look at that in comparison to what it would cost for a continuation of problems like delinquency, teenage pregnancy, what it costs the society every time a student drops out of high school. We'd have to compare those costs.

I think any objective analysis would show that we would benefit greatly by promising, you know, $10,000, $12,000, $15,000 for a kid's four-year education as a way in which they would go on to college. And even when children don't go on to college under these programs we find that almost all of them finish high school, for instance, because just the motivating notion that they may go on to college, some of them go into the armed services and make other choices, but that one of the things that happens when you promise this type of assistance is that they definitely have in their mind completing high school and positioning themselves well for the future.

So right now, Pell is set up as a program to help low income students. We're talking about focusing this effort at the lowest income students in the most dire circumstances, in terms of the aggregation of poverty in their communities, as a way to motivate them to go forward and to have a sense of what their future may be. I think that bodes well for the nation's future.

Ms. Sanchez. Great. Just wanted to get you on the record.

Mr. Fattah. Thank you.

Ms. Sanchez. Thank you.

Chairman McKeon. Thank you.

Mr. Goodling?

Mr. Goodling. Since we are announcing education forums in our district, I might announce that Mr. Gekas and I are having one on Monday. You're all invited. It will be held in Harrisburg. We'll cover all areas of education. We didn't ask the committee for any assistance, but it will still be a good hearing.

As the Congressman knows, I strongly support his efforts. I hope we can come to an agreement on just how we do it, because I believe, as I said earlier, that hope has to begin long before senior high school. I have that battle all the time in vocational education where people like to talk about vocational education at 11th and 12th grade, and that doesn't make much sense either.

I would caution you that Pell Grants are becoming very popular. Yesterday I was in a meeting, just to know that you're being one-upped, where the whole idea was Pell Grants for grades 1, 2, and 3. These Pell Grants, of course, is another name for choice. That's exactly what it is.

But I am going to be very supportive of your efforts to put something together so that we can give that kind of hope to those who need it in middle school.

Thank you, Mr. Chairman.

Chairman McKeon. Thank you.

Mr. Fattah. Let me thank the Chairman for his comments.

Chairman McKeon. Thank you.

Ms. Woolsey?

Ms. Woolsey. I am very proud to be a cosponsor of your bill, Chaka. This is a great bill.

How about the parents' involvement in this? A fifth and sixth grader may lose track of what their benefits could be later on in life. Are you educating the parents? Would we be communicating to them, I mean, like having forums?

Mr. Fattah. The bill does specify that we would communicate with the parents of the 21st Century Scholars, if you will, on an annual basis to make them aware of this continuing possibility for their child's future. I think it is important to impact parents with the burden of knowing that their child has an opportunity to go on to college, and that hopefully it will further engage parents in the educational process.

In the isolated cases in which these programs have taken place thus far in our country, it has created more involvement by parents who now see for their children a very different future than they have been able to amass for themselves. And so they have become much more active in their child's education.

Teachers who unfortunately, you know, don't always have the highest expectations for students from low income backgrounds also are seeing the value of these children much more once it has been made clear that they have a college opportunity in their future.

So what I'm hoping is that this will create some synergy among teachers and parents and the community at large. But even if that fails, I think that a sixth grader themselves can understand the notion of thousands of dollars being in an account somewhere down the road for them to go to college, and that studying becomes a little more important to them than it may otherwise have been.

Ms. Woolsey. But the student that has an interested parent or an interested educator can have that voice behind them, ``you may be losing, you may be losing this,'' would be very helpful.

Mr. Fattah. Absolutely.

Ms. Woolsey. So the more they know about it, the better.

Have you considered any kind of a contract with a private entity such as Tell Them We Are Rising and I Had a Dream, any of those entities, instead of going federally?

Mr. Fattah. The Tell Them We Are Rising program is set up by a young lady from my district who is around 90 years old now. Ruth was a teacher who rose up to be the president of our Board of Education, but in all of her 40 or 50 years of teaching saved her money and decided one day that should would go to a small school in my district and promise these kids a college education with her life savings. And most of them went on to college. It's an amazing program.

Again, the point is that this idea really is built on those kinds of successes, except what I'm suggesting is that we could have a much broader impact through the use of the Pell Program than any individual, no matter how well off they may be, could have in one sixth grade classroom, because the other problem that comes is then you have one set of kids who are special and everyone else is kind of on their own. And what we're suggesting here is that we could broaden that significantly through this initiative.

Ms. Woolsey. Well, isn't it true that when we talk about the expense of Pell Grant programs that in this case only the success of the program will increase the cost, and that's what we would be…

Mr. Fattah. And only cost if it works.

Ms. Woolsey. And that would be such a win-win for all of us, for the children particularly.

Now, one thing that you mentioned that I'd like to get on the record maybe in a little more detail, talk about the confidentiality of identifying these students. And are you at all concerned about their confidentiality?

Mr. Fattah. Well, I think that we would have to do some work, and I think we made some suggestions in the original bill about how we could forward. But I think that we would want to make sure that the students and their parents were able to get the information that would be necessary from the Department of Ed., or through whatever mechanism we decided to administer the program, but that we would obviously comply with all of the federal guidelines in terms of confidentiality since we're talking about, you know, minor children.

But we're also talking about public support, so, I mean, there will be some appropriate marriage of those issues.

Ms. Woolsey. Okay. Thank you for doing this, and I am delighted that you brought this experience to us.

Chairman McKeon. Thank you.

Mr. Deal?

Mr. Deal. Thank you, Mr. Chairman. I, at the outset, would like to thank you for holding what, to the knowledge of anyone in my district, was the first field hearing of any congressional committee ever in the Congressional District, the 9th, of Georgia.

I thank you and Mr. Romero-Barcelo for attending that hearing. It was very well received, and I appreciate the fact that you would take the time and make the effort to do that.

In addition to that, I have, like most people, held my own hearings of sorts in my district, meeting with educators and meeting with interested businesses. And one of the things that I find is that there is a delinkage, and I think Mr. Fattah is attempting to deal with that issue.

My most recent field hearing was when my wife, who is a sixth grade middle school teacher, insisted that I spend my Monday morning talking to her students. That is an interesting experience, and certainly the sixth grade, as you have pointed out, is an important turning point in the lives of children. I was impressed for three hours with how important it is that they have a sense of understanding of where they're headed.

I know we all have differences of opinion as to how we get there. I am amazed as I look at those sixth graders and wonder how they are going to comprehend their future and see that their counterparts at their high school level, this graduating class this year, of which my last daughter is now a senior graduating tomorrow from the high school to which these six graders will go, that they have a substantially high number of those who are going on to college and to vocational technical school.

I think it requires a lot of things. It requires hope, and I think that's what you are trying to say is that we need to implant hope.

I also think it requires the cooperation of many people, family members, who will underride and sustain that hope, and sometimes many of these individuals don't have that. I also think that it requires that we have good teachers. I think that it requires that we have good counselors who will encourage them.

I think that's one of the real links that is sometimes very weak as I look at the school systems that are in my district is that we burden both the teachers and the counselors with paperwork, things that are perhaps not as high on the priority list as they should be, and counselors don't have time to counsel. They don't have time to tell the young people about the opportunities that are there.

So I commend you for this effort, and I, too, look forward to working with you. Hopefully we can all come to some plan of action that will keep these sixth graders on point and on task.

Mr. Fattah. Well, let me congratulate you on your daughter's graduation, and tell you that members of your conference, like J.C. Watts and Joe Scarbrough and Chris Shays, and a number of others, have cosponsored this bill. Congressman Greenwood from Pennsylvania has also come on board as a cosponsor.

The chairman of the full committee and the chairman of the subcommittee have given me I think significant leeway to try to develop support for this concept. I think it is something that we could proceed with as a shared consensus, because it really lays the opportunity out for young people, but obviously, they have the responsibility to prepare themselves.

We know that one of the best things about American education is our higher education system. Young people from all over the world flock to it and are fighting to get into the doors of our colleges, and we need to make sure that young people here, even in the most destitute of circumstances, understand that college is a real possibility.

We can't do everything for them. We can't do their homework or carry their books, or even get them through some of the tough situations they may have in their families or in their neighborhoods. But we can tell them that when the Congress set up the Pell Program to help low income students go to college that we really wanted to help lower income students go to college, and now we know maybe better than we knew then that we need to let these young people know sooner rather than later that this opportunity is a very real opportunity for them.

Mr. Deal. Thank you, Mr. Chairman.

Chairman McKeon. Mr. Romero-Barcelo?

Mr. Romero-Barcelo. Thank you, Mr. Chairman. I want to congratulate you also on this bill, and I join you as a cosponsor, which means I support you very strongly.

I just wanted to take the opportunity also to indicate for the record how important it is that our children have the opportunity to go to college in this day and age. I have here some data from the U.S. Bureau of the Census statistical brief. This is from August 1994. I'd like to have a more recent one, but this is good enough for what we want to establish here.

The high school dropout, the average wage of the annual income of a high school dropout, according to these statistics was $4,809. A high school graduate was $18,737. A two-year associate degree graduate jumped to $24,398. A four-year bachelor's degree to $32,629, which is almost double that of the high school graduate. By the seven years' doctoral degree, it went up to $54,904, and an M.D. or a J.D., doctor or lawyer, was $74,580. So there are really impressive statistics, and to have that opportunity to go to college can make a world of difference in anyone's life.

And also, that opportunity to give them the confidence that they will have the resources, the economic resources, to go to college is a strong stimulus for them to study and for the family to support them.

I have one concern that I was trying to see if it was addressed in the bill that perhaps we should think about. It is that if at the time they are made the guarantee by the government that they will finance their education if they meet certain economic requirements, if those change substantially throughout the years, would there be a provision so that those opportunities could be given to other students that would not have the financial resources? Would there be a means for that?

Mr. Fattah. Well, that may be something that we'd have to work on. The proposal, as I put it forth, recognizes the fact that the reality of poverty in our country is that it doesn't change over six years for 99 percent of the families. In fact, our problem in terms of poverty is a nation is that it's generational and goes from one generation to another.

So if there was a six-year window in which some large number of students were, you know, being enriched because their family, you know, benefitted from some estate, I think that we would have to deal with it. My hope is that, first of all, that we make the commitment as strong as we can in keeping with whatever the politics of our concerns about entitlements may be, but that we have as little small print as possible.

That is, that we don't give any reason for young people to believe that this is not a very firm commitment to their future education because, again, many of these young people and because of some of the past failures of the government, there is some cynicism about various proposals or programs. And so my hope is that we could be realistic and to go forward in the most aggressive way that we could.

Now, obviously, if some family, you know, hit the lottery maybe that's something we'll have to consider. But I am hoping that this would allow, you know, half a million children to hit the lottery every year.

Mr. Romero-Barcelo. No.

Mr. Fattah. They graduate from sixth grade knowing with certainty that they're going to be able to go on to college.

Mr. Romero-Barcelo. Of course, now, this is going to be the exception. I just wanted to bring that point up, just so that…

Mr. Fattah. I understand. I think that would be a great problem for us to have that we had people moving from below the poverty line into wealth and affluence in our country in six-year spans of time.

Mr. Romero-Barcelo. There always will be some. Fortunately, there will be at least some.

Thank you very much, Mr. Fattah.

Chairman McKeon. Thank you.

Mr. Peterson?

Mr. Peterson. As a colleague from Pennsylvania, I want to congratulate you on your efforts here, and I'm sure you're as aware as I that you come from the most urban part of Pennsylvania and I come from the most rural district east of the Mississippi, so we serve different constituencies. And I guess as you've crafted this legislation thoughtfully, I'd be interested in your vision of how this legislation will bring hope to the rural poor.

Mr. Fattah. Well, in fact, as you and I and others I think are well aware, poverty is not an urban phenomena in our country. In fact, in rural America, as in rural Pennsylvania, the most impacted schools would, under this proposal, be spread almost equally between rural and urban locations.

The Philadelphia Inquirer did a major feature just two years ago on some of our brightest students from rural Pennsylvania not being able to go on to college because of the lack of resources. And our poorest school districts in Pennsylvania are not in the cities of Pittsburgh or Philadelphia. They are in rural parts of our state.

So this is not a proposal geared to urban children who are disadvantaged, just geared as written to any location in which there is not only the instance of poverty but the aggregation of poverty, and I would not want it to have any geographical impact that would not recognize the fact that that is both a rural and urban phenomena. And we could work together to ensure that as we go forward with this bill.

Mr. Peterson. I thank the gentleman.

Chairman McKeon. Thank you.

Mr. Tierney?

Mr. Tierney. I have no particular questions. Mr. Fattah, you know of my support for the measure that you have here, and I think we'll pass on anything else.

Thanks.

Chairman McKeon. Thank you.

Mr. Norwood?

Mr. Norwood. Thank you, Mr. Chairman. I am the welcome wagon hostess today, and I'll pass up on asking questions. But I am delighted to be here with you and thank you for the time.

Chairman McKeon. Thank you.

Mr. Hinojosa?

Mr. Hinojosa. Thank you, Mr. Chairman.

Mr. Fattah, I congratulate you for this wonderful proposed legislation. Your 21st Century Scholars Program is one that is receiving raving reviews down in South Texas, because we have an empowerment zone. We have lots and lots of children who can see this as restoring their hope for an opportunity for access to higher education, so I commend you for what you're doing.

I co-hosted with my friend from California, Loretta Sanchez, an educational forum out there in Santa Ana, California, and I can tell you that it was most impressive to see the quality of folks who came to testify and emphasize the importance of what you have in your legislation, and that is to give those students at the fifth/sixth grade in the middle school the vision that they can also go to postsecondary education.

I can tell you that even though the proposed increase of the Pell grants to the $3,000 certainly is going to help a lot of the neediest students. I just wonder what we can do, or how your legislation is going to help them beyond that $3,000 if there is an explanation that you could shed. I mean, if you could give it to me, I think that I would better understand what your vision is.

Mr. Fattah. Well, what we want to do is not to miss the point, to promise maximum Pell Grant, whatever that maximum may be at the time that these young people matriculate in college. In some discussions with some people representing the administration, that may not be the most advisable way to go forward, because making a promise of an uncertain amount could cause us problems in terms of how to budget this.

So we may have to go with whatever the amount is, you know, at the particular time that the bills were to be passed. So what we would want to do is to promise four year's maximum eligibility to Pell to students who would, in all other instances, be eligible for it, but to do that six years prior to the time that they would normally matriculate in college.

So that it's not actually trying to increase the amount of dollars that they would receive. What we're trying to do with it is to let them in on a secret about what is possible for their future early enough so that they would make choices in which the whole country would benefit by the choices that they would make over those next six years.

Mr. Hinojosa. Thank you.

Thank you, Mr. Chairman.

Chairman McKeon. Thank you.

Mrs. Roukema?

Mrs. Roukema. No, Mr. Chairman, I won't take further time. Perhaps at another time I can discuss this at greater length. I am unalterably opposed to creating another entitlement, and I think that discussion has already been conducted before I arrived. So we can discuss it another time.

Thank you.

Chairman McKeon. Thank you.

Mr. Barrett? He had to leave.

Mr. Graham?

That concludes the round of questions. I want to thank you, Mr. Fattah.

Mr. Fattah. I want to thank you, Mr. Chairman, and I thank the ranking member.

Thank you.

Chairman McKeon. Thank you very much.

We'll take just a three-minute break to give our second panel a chance to take their seats, please.

[Recess.]

Chairman McKeon. We will move on now to the second panel. And I have a couple of people from home I would like to take the pleasure of introducing.

First, Ms. Norine Fuller, who is currently serving as the Executive Director of the Fashion Institute of Design and Merchandising (FIDM) in Washington, D.C. Ms. Fuller received her bachelor of arts degree from UCLA. She also began her professional career as an apparel buyer for Buffams. Coming from a retail background, you know, I understand what that is. Buffams is a chain of 15 department stores in southern California.

Ms. Fuller has also held many positions at the Fashion Institute of Design and Merchandising, including that of Director of Financial Services where she oversaw the disbursement of the college's state and federal funds. She also has played a role in reducing student loan defaults as the creator of a national music video campaign entitled ``Credit for My Debt,'' which was distributed to more than 3,200 educational institutions to be used for the exit interviews and pre-loan counseling.

The second person from our state, and from my district, Dr. Dianne Van Hook is the Superintendent and President of the Santa Clarita Community College District known as the College of the Canyons. This is located in the 25th Congressional District of California.

She has a great deal of experience in education and has held such varied jobs as sociology instructor, teacher, professor, dean, and I think president of all of the associations dealing with these various jobs. She is also very active in the community of Santa Clarita, both in education and in small business development.

I had the opportunity a few years ago of serving with her on some of these projects, including the establishment of a locally funded small business assistance center.

I know personally that Dr. Van Hook is a very dynamic person, and I'm sure she will prove to be a very dynamic witness. She has contributed greatly to Santa Clarita, and I'm sure she will contribute a great deal to our hearing today as well.

We're happy to have all of the witnesses here. It's just nice to be able to have special recognition for those that come from California. It's a long way away.

We will be hearing also from Mr. Irv Bodofsky, Director of Financial Aid from the State University of New York, Syracuse, New York; Dr. Neal Malicky, President of the Baldwin-Wallace College from Berea, Ohio; Mr. Richard Turan, President of Briarcliffe College, in Bethpage, New York; and Dr. Shirley Lewis, who we will ask Mr. Norwood to introduce from his home State of Georgia.

Mr. Norwood. Thank you very much, Mr. Chairman. Mr. Chairman, it is an honor and a privilege for me to introduce to you, and to the members of the committee, Dr. Shirley Lewis, President of Paine College in Augusta, Georgia.

We at home are all very proud of Paine College and their many outstanding graduates they produce, and I encourage all of you, though I'm sure the witnesses have limited time and will have to summarize their testimony, I encourage you to read all of Dr. Lewis's testimony.

Dr. Lewis became the first female president of Paine College on July 1, 1994, Mr. Chairman, and that was since its founding in 1882. Prior to assuming the presidency, Dr. Lewis served as Assistant General Secretary of the Black College Fund of the General Board of Higher Education and Ministry of the United Methodist Church in Nashville.

Dr. Lewis has also worked as an educator at numerous colleges, and she is a well-known researcher on issues surrounding teacher training and teacher effectiveness.

Shirley and I agree on a lot of things, other than just we both agree on methodism, but we also agree that for the country, and for the State of Georgia, and for the 10th District of Georgia, education has to be the key to the 21st century if our children have any hope of pursuing happiness.

Dr. Lewis works tirelessly on this, and I personally am grateful for her efforts. She and I also agree that education spending has gone up dramatically, but the amount of the grants actually reaching the students seem to be going down. I think Dr. Lewis is correct in her testimony and that we need to move to make more of what we spend on education available to the student.

In conclusion, Mr. Chairman, with regards to Pell Grants, that the 104th Congress, in a bipartisan way, raised that number to the highest level in history. I believe the 105th Congress will improve upon it even more in the bipartisan way. It’s simply a clue that we all have an understanding of how important it is that all of our children reach a higher education level.

We hear our President talking about Hope scholarships and tax credits, and I'd like to point out to you, Mr. Chairman, that to do that pretty well in Georgia. We have Hope scholarships for all of our children to attend colleges that maintain a B average. And, Mr. Chairman, they lose that when we get a Pell Grant or if we have a national Hope scholarship.

Somehow or another, I wish you'd protect us a little bit on that as you work through this higher education problem. We somehow don't like to lose that money that we are working very hard to give to our citizens now.

And with that, I'll conclude. Shirley, it's a delight to see you. I know you got in on that late night flight last night, and we really are grateful for you being here.

Ms. Lewis. Thank you very much, Congressman.

Chairman McKeon. Thank you.

Mr. Norwood. Mr. Chairman, I beg your pardon. May I yield 30 seconds to my colleague from South Carolina?

Chairman McKeon. Especially since he is Vice Chairman of the Committee, yes.

Mr. Graham?

Mr. Graham. Well, I just want to add my two cents worth, or $200 increase of Pell Grants, whatever we're going to try to do here. But, Dr. Lewis, your reputation goes far beyond Georgia. I am in the 3rd Congressional District of South Carolina, and I border Charlie's district, and north Augusta is in my district. We're having people move out of my district to go to Georgia for these scholarships, so we've got to find a way to do better in South Carolina.

But your school is well known and has a great reputation, and I just wanted to let you know that wherever Charlie Norwood goes, the reputation of your school goes.

Ms. Lewis. Thank you so much. I appreciate it.

Chairman McKeon. Thank you. We're happy that you're all here today. I know it's not easy to come, and we appreciate you being here and look forward to your testimony. We'll begin with Ms. Fuller, and we'll just go right down the line.

Do you see how this light system works here? We've asked if you will keep your comments within 5 minutes. We have your written testimony, and that gives us a maximum time for questions. So the green light is four minutes, the yellow light is one minute, the red light means the trap door under you is about to fall.

[Laughter.]

We'll hear first from Ms. Fuller.

Ms. Fuller. Thank you, Chairman McKeon, Congressman Kildee, and members of the subcommittee. I thank you for the opportunity to present testimony on the federal Pell Grant programs and federal Campus-Based Aid.

My name is Norine Fuller. I am Executive Director of Student Financial Services for California's Fashion Institute of Design and Merchandising (FIDM).

FIDM is a creative laboratory producing some of our nation's brightest corporate design and entertainment stars. FIDM is a two-year regionally accredited college offering associate degrees in merchandising, design, and interior design. From summer '96 to spring '97, FIDM had 3,000 students. Approximately 20 percent have previous degrees; 82 percent of the students work while attending college. Thirty-one percent have federal Pell Grants; 57 percent attend with the help of Campus-Based Aid.

Federal student assistance programs have been essential in providing access to higher education. These programs are cross cultural and highly effective in providing a means for cultivating intellectual and occupational talents -- the end result to the vital resource of human capital to refuel our nation's workforce and expand our country economically.

We commend Congress for enacting the student assistance programs under the Higher Education Act. Approximately 69 percent of FIDM students receive some form of federal assistance, and most, if not all, would be unable to attend college without such assistance.

Over 800 of our students utilize the Federal Perkins Program. This program is administered by the institution for the benefit of low income students. The program also requires a match of federal funds by the institution. Our campus match over the years has been $859,000.

I am also here today to testify on behalf of COHEAO, the Coalition of Higher Education Assistance Organizations. COHEAO is an organization, a national organization, which maintains a proactive focus on legislative and regulatory developments for all federally funded student aid programs, with particular emphasis on the continuation and the improvement of Federal Perkins Loan programs.

In 1996, Perkins loans averaged $1,400 per students, and went to approximately 750,000 students at over 2,200 schools in this country. The $150 million federal capital contribution that was appropriated by Congress in 1996, combined with other funding, leveraged almost $1 billion in new loans for undergraduate and graduate students.

Approximately 83 percent of undergraduate Perkins borrowers are from families with incomes of $30,000 or less. Twenty-five percent of these borrowers are from families with incomes at or below $18,000. Federal legislation places borrowing limits on guaranteed and direct loans, making Perkins loans a vital gap filler for eligible low income students. Without Perkins, the alternatives are limited to costly PLUS loans or private label loans, which are often unrealistic options requiring either demonstrated creditworthiness or cosigners.

As you can see from the pie chart that I brought with me today, Perkins funds make a real difference on campuses across the country. The chart depicts the cost of attendance at a state university. As is typical of many Perkins borrowers, the student has need but does not qualify for the maximum Pell award. The state grant is significant and the student will work in the federal Work Study Program, but the student will still need to borrow.

The $2,625 represents the maximum amount of subsidized Stafford loan funds available to her this year, but her remaining need is $3,000. Many students are in similar circumstances, and in good conscience we cannot counsel these low income students to accumulate additional debt via the expensive PLUS loans or private label programs unless this is their only option.

In this particular situation, Mary will be awarded a $3,000 Perkins loan at an interest rate of only five percent. The unique cancellation provisions of the Perkins loan will allow Mary to have these funds forgiven in return for special community services.

I have brought a second chart today, and the second chart compares the Perkins Program to the other various federally supported loan programs. As you can see, a $15,000 loan costs the student much more than its face value. The Perkins Loan Program is the best economic option for eligible students to meet their educational expenses.

As your committee takes up the important task of reauthorizing the Higher Education Act, we hope you will consider the essential role federal Pell Grants play in allowing for grant aid to desperately needy students who should not and cannot assume excessive debt. Increasing federal Pell Grants for our neediest students will allow them the opportunity of education without the consequence of crushing debt.

Chairman McKeon, in your letter inviting us to testify before the subcommittee, you asked us to share our views and ideas on any higher education policy reforms which Congress could consider in reauthorization. Listed below are seven suggestions.

Number one, increasing State Student Incentive Grant funds. SSIG funds are often precariously positioned in the federal budget process, but these funds which are matched by the state allow for student customized aid programs to complement federal aid dollars. For example, the California Student Aid Commission, through the support of SSIG dollars, has developed the Cal Grants, which help more than 36,000 students.

Number two, tax credits and educational IRAs. Don't say no to students. Many of the 17 educational tax proposals circulating Capitol Hill have restricted use, based upon a student's educational choice. If the institution is eligible for Title IV funds, its students should be eligible for any educational tax benefits.

Number three, Title IV 2000. This reauthorization has a unique opportunity to assure America's students that there will be no disruption in the delivery of student aid due to year 2000 millennium bugs.

Number four, Neg-Reg-Revisited. Negotiated rulemaking was put into statute during the last reauthorization. The advantages of the process outweigh the negatives. Written records of each session would assist this proactive and thoughtful process.

Number five, simplify refunds. Since the last reauthorization, the issue of refunds has been evolutionary, and it has been difficult to find consistency in interpreting the regulations. There are, and have been, pro rata refunds, institutional refunds, state refunds, Appendix A, and the federal refund policy. One can only imagine how confusing this is to the student education consumer.

Number six, college costs of virtual reality. California's Governor Pete Wilson has begun his initiative for the California virtual university. The Governors' virtual university or distance learning not only offers an important commodity of export education, it will serve as a tool in keeping college costs down. Students on the information highway can park their cars at home and cut expenses. Virtual learning saves administrators the cost of bricks and mortar.

Number seven, America reads, but do they compute? President Clinton's America reads challenge utilizes college work study students to help children in the first, second, and third grade to read. Why not expand this effort to include math?

In closing, thanks to the continuing support of federal student aid dollars, FIDM graduates are making their mark. Levi Strauss thinks that they have our best graduate. This student's brain child was Dockers menswear. Levi sold $1 billion worth last year.

Say ``birdie'' and Nordstrom's will say ``Calloway'' for the FIDM graduate teeing off their new golf apparel line.

And ask a lingerie lady by the name of Victoria, and she'll tell you her secret. This young designer is hot in helping to muster over $661 million in catalog sales.

You won't call Jim Carey a liar when he says the designer of his Mask wardrobe is the same thriving graduate who clothed the Nutty Professor.

Federal student aid does make dreams happen. Thank you.

Chairman McKeon. Thank you very much.

Dr. Malicky?

Mr. Malicky. Thank you, Mr. Chairman. Good morning.

My name is Neal Malicky. I serve as President of Baldwin-Wallace College in Berea, which is a suburb of Cleveland, southwest side of Cleveland. I am here representing both my school and the National Association of Independent Colleges and Universities, some 900 around the country.

I know our time is limited, so I will try to be brief. There are those who think a college president can't say his name in five minutes, and I may have difficulty.

But let me just start with a simple question. How do we build a better society? I know that every Member of the Congress asks that question regularly. I can affirm for you that every college president I know asks that question also.

The answer that we've given for more than three decades is in the form of a partnership between the federal government and the colleges and universities of our nation, with the federal government providing financial assistance to students who do not have the resources themselves, and the colleges and universities investing in those students both the resources of our people and the resources of our colleges as well.

This morning we're talking about the two basic planks of that program. The Pell Grant Program is the cornerstone of this partnership. The college-based programs provide the additional ability for the campus financial aid administrator to make up the difference for the student who does not have the resources, because we're talking about assisting children of poverty, not just children of privilege, in order to build a better society.

When we talk about the Pell Grant program, and we see recommendations for increasing the value, we applaud the Congress of the United States, because we see the value having been eroded over the last 15 years. The value of the Pell Grant needs to be restored in order to help our students.

When we look at the Campus-Based programs, the person less informed will say they are all kind of a patchwork. They don't make sense. They are not a haphazard patchwork. They work together with the SEOG, the supplementary grant, the college work study, the Perkins loan, the state incentive grant, all working together.

We are not proposing, and we are not supporting, those who say, ``Lump them together into one grant.'' We think that the separate grants are an assistant to the students and also the college's match, and so the value is increased by the match.

Mr. Goodling challenged us as college presidents to talk about college costs, and he told us what not to say, so I want to listen to what Mr. Goodling said. In my testimony, you will see some things that I have suggested about college costs. We are working at this business. Every president I know, and every board of trustees that I know, is working on the business of reducing and controlling costs.

At our school, the tuition next year is about $13,000. Some would say that's a lot of money. If you make $30,000, it is a lot of money. So if you make $30,000, the supplement from the federal government, some from the state, and much from the college. Our own school is investing in students this year, $10.7 million of our own money.

I'm not talking about federal assistance. I'm not talking about work. I'm not talking about loans. I'm not talking about state assistance. I'm talking about direct grants to students from our operating budget. That is a commitment five times what we receive from the combined resources of the Pell and Campus-Based awards. That is a commitment to students.

Let me just illustrate, in closing, how it works for one student I could illustrate with many, because some 800 plus are on Pell Grant assistance in our school this year. Let me call this student Tanya. I knew her well.

She was a minority student from Cleveland. Her senior year in high school, she became pregnant. She had a scholarship to go to a state university, which she had to turn down. Sort of at the last minute, she learned of a program that we have that we call SPROUT, Single Parents Reaching Out For Unassisted Tomorrow’s. She enrolled. She got the full maximum Pell Grant award each year that she was in school.

She got the supplementary grant. She got assistance with a work assignment through the federal Work Study. She took loans. And we invested very heavily in her. When she came to school, her little one was a few months old, moved into one of our college houses along with 11 other young women in three houses and their little ones. She graduated in four years.

Two months after her graduation in August last summer, she spoke to our dean of students and said these words. She said, ``A miracle happened to me last week.`` I don't know about you, but when somebody uses a word like that, I listen.

What is the miracle? ``The miracle,'' she said, ``was for the first time since the day I was born I am off welfare.'' That, I submit, ladies and gentlemen, is one example, and there are many, the skeptic will say, ``Well, that's just one.'' They're wrong. It's two. It's Tanya and her little one Bryanna, who has a different life. In our school, it is 800 a year, and thousands over the 30 years. And around our nation, it is millions of students like Tanya. They are helping, as you are helping, to build a better society through these programs.

Thank you for doing it, and thank you for letting me have these opportunities to say these words.

Chairman McKeon. Thank you very much, Dr. Malicky.

Dr. Van Hook?

Ms. Van Hook. Good morning. It's an honor to be here today to speak to you, and you have my testimony and I have provided some comparative information that has already been referred to.

I think the reason that it is so exciting for me to be here today is because it is energizing to know that there is such a strong common interest in looking at the value of education and how that has a ripple effect throughout the economy and trying to improve what we do and how we do it.

Jack Walsh, who is the CEO of General Electric, has stated, ``If the rate of change inside any organization is less than the rate of change outside, the end is in sight.'' I think that that is where we stand with respect to basic principles and assumptions that we have about higher education.

While it may be difficult for most of us to introduce ourselves or say our names as college presidents in five minutes, or ten, or two, it is even harder to begin to focus on why these issues are so important. My interest in this not only comes from representing community colleges in the State of California and public community colleges across the country, but I have a long commitment to community college personally.

There was some talk earlier about who is a low income student. I grew up in Minnesota. I lived in many states in the Midwest. We moved to California. I never had any imagination that I would go to a community college. I thought I was certainly destined for some greater entity, and I say that with a lot of humility at this time.

I ended up at a community college because my dad quit his job after being transferred 27 times in 27 years and went to work for another company. But in the middle of that time, there was a time when our finances as a family were uncertain. So I went off to Long Beach City College with a real chip on my shoulder, because I thought I was better than that. I thought I belonged somewhere else, and actually was supposed to be going to the University of Michigan in Ann Arbor.

Fortunately for me, I had a really good counselor who gave me a good stiff kick in the rear end. There has been some talk earlier about motivation to learn and motivation to persist, and how do we know we're going to get any return on our investment through Pell Grants that we give to students to be able to give them those opportunities. I think a lot of that has to do with the motivation, and motivation has to do with believing in yourself and believing that you can do it, and that starts very young.

I had that motivation up until the time my plans changed and then got off a little, lacked self-confidence. In fact, I lacked so much self-confidence I used to sit in my car during breaks in the parking lot because I was afraid people would come up to me and talk to me at Long Beach City College and I wouldn't be able to speak back and say, ``Hello. How are you?''

Fortunately, I had a counselor who told me to get my life together, get my act together. I had leadership potential, but it was up to me. Nobody was going to do it for me, so I'd better get on the road and start going.

I did. I worked two jobs. I fortunately got a certificate in child development from a community college, Long Beach City, and was able to get a state license, teach child development to put myself through the rest of college, and also worked as a bank teller at the Bank of America.

That's a good way to teach people why they ought to go to college. To have them do an internship as a teller at the Bank of America. It's a wonderful motivator. I actually got on the bus one day and was headed out of town and realized I had to go back to work at the Bank of America the next morning, and I went to class instead and didn't drop out.

I've taught elementary school, nursery school, junior high school, graduate school, community college, and in the leadership program at the University of Texas for community college administrators.

I have also taught in urban districts, small districts, rural districts, Plymouth County, where there is 40 percent unemployment in the winter when there aren't any jobs. I think I have a fairly reasonable perspective about what it takes to have people succeed when they go on. And I think what it takes is opportunity. We have to give people opportunities to have access to that.

I'm going to be jumping all over, so it's all in the testimony. But I want to point out the things before that yellow light goes on, because then I know my minutes are numbered.

There was a reference to distance education. There was also a conversation earlier with the Congressman who was speaking about his bill. One of the best things that we can do, and I've actually written to the Governor in California, who usually doesn't take my ideas, but you never know. One of these times I might get lucky. I said the best investment in education, and the best investment in getting people off of welfare that we could contribute is to buy web TV at $298 and issue it as an addendum to a welfare check, just one month. Have it hooked up in the homes of those kids, so they can surf the Internet, they can see what's out there, and they can see something else besides what is unmotivating them in their own communities.

In California, the cost of education, and there is information in your handout that shows that the cost of education at a community college in California, is very small compared to other states in the country. However, the cost of living in California is not as small compared to other states in the country, and I've lived there and I know.

California community colleges receive approximately $3,000 from the state for funding one full-time equivalent student. CSUs receive $9,000. CSU receives $12,000 for the same undergraduate student. Our students systemwide, do as well, if not better than, the native students who started at the four-year colleges and universities.

I think the investment in community colleges and giving people a start there is real important. One out of every 10 people who attends a community college in the nation attends a California community college.

With respect to the impact of less funding and not allowing remedial course work to count, I think we all need to remember something. If most of us in this room took the placement test that we give at College of the Canyons today, I wonder how many of us would place in college-level algebra, in college-level English. English probably better than math.

So many times if we don't use it, we lose it. And from that perspective, I think we need to keep the age of our students, 32 years old in community colleges in California, 30 nationwide, in mind. We have a lot of people coming back to us who have been out of it for a long time, and they need that chance.

In closing, I would like to state that there has been some talk about the cost of how community colleges should do it so much cheaper. I think if you'll look at the economics of it, community college instructors are teaching five classes, 35 students a class, three hours a week, 18 weeks a semester, two semesters a year. They've having well over 15,000 student contact hours, and that's their primary purpose.

I'd like to thank you for taking these very important topics up. I wish you the best of luck. You have a tremendous challenge in front of you. But if we all have the common interest in mind and realize that the investment of the Pell Grant is a very small investment, in terms of a return on the investment that the economy sees after the person has that degree and is spending that money over and over again, year after year, in the nation's economy.

Thank you.

Chairman McKeon. Thank you.

Mr. Turan?

Mr. Turan. Thank you, and good morning, Chairman McKeon, Mr. Kildee, and members of the subcommittee.

My name is Richard Turan. I am the President of Briarcliffe College, which is located in Bethpage, New York, on Long Island. I am also a President of the New York State Association of Proprietary Colleges.

If I may, I'd like to tell you just a little bit about Briarcliffe. Briarcliffe is a small college that has been in operation about 31 years. We have about 2,000 students. We are proprietary. We are regionally accredited. We provide a full array of services for our students, including intercollegiate athletics. So we may be a little different than what you might think of as a proprietary institution. However, there are many proprietary institutions that are very much like Briarcliffe College.

I should also tell you that just recently this year we moved into a new facility, which was part of the Northrop Grumman Corporation's. Their engineering headquarters are located on Long Island. It is now the new home of Briarcliffe College. The college invested over $10 million into that home without any government subsidies.

The Association of Proprietary Colleges boasts this as a New York State association. All of the members are degree granting. All of the members are proprietary. All of them have programs that are focused in areas such as business, technology, things such as the liberal arts, which you may not think of as far as a proprietary college is concerned, some technical areas, computer programming, and computer science.

We have about 35,000 students in New York State. We offer degrees at the associate, the bachelor's, and the master's degree levels.

Earlier, Mr. Goodling also, I recall, told us not to tell him that all we need to do is raise tuition and have the government give us more money and everything will be fine. I won't tell that to Mr. Goodling, because I think he is right. It's not the right thing to say. We need to be more efficient, more effective, and continue to provide a quality education for students. The bottom line is what's best for the student.

I think the way to do that is to enable the student to have choice, to have access, and the way to do that is to create competition. Students should be able to choose the institution that best meets their needs.

The Pell Grant Program is a wonderful program. The Pell Grant Program does open up opportunities for students and gives students an opportunity to go to the institution that best meets their needs. I agree with my colleagues; the program needs to be funded at a higher level, and hopefully Congress will see fit to fund the program at the $3,000 level. It has not kept up with the cost of higher education, and it is a great program.

But there are other things that are also happening that help prevent students from choosing the right institutions and help us prevent us from being effective.

Section 1201(a) of the Higher Education Act defines an institution of higher education. It excludes students who attend proprietary colleges. These are students who attend colleges who meet all of the accreditation and other standards of any other college, except for the fact that they are proprietary.

I can tell you, for example, from personal experience, that about two or three years ago we were receiving VITEA grants. My college received a very small grant. It was a competitive grant that was given to the State of New York. The State of New York, by the way, treats all colleges, regardless of their control, as being equal.

They put out VITEA grants. It was competitive. We won a grant of $180,000 over a three-year period. This was a relatively small grant. With that grant, our proposal was to establish a distance learning program to help women enter technological fields, non-traditional education. It was a fabulously successful program. The network was up and running. We had women in the program.

We had a conference where we had national conference people come from as far away as Stanford University in your home state, Mr. Chairman. Things were going wonderfully well. VITEA grants have been cut off at this point to students who attend proprietary colleges.

There are other things. Mr. Kildee, you mentioned the TRIO program. I agree with you, it's a wonderful program. Students who attend proprietary colleges are not eligible for the TRIO program. I'm thinking of a colleague of mine in the Bronx, Monroe College. It's a college of 3- or 4,000 students, arguably one of the most successful colleges in that area, very high graduation rate, almost entirely minority. They are not eligible for TRIO for this reason. These students are being disenfranchised.

Think how much better they can do if they had had this type of eligibility. What we need is a level playing field. We need more competition.

The other thing that I would tell you that is a great concern to at least the people that I represent is the federal bureaucracy. I cannot count the amount of information we get on a daily basis from the Department of Education. But I've seen some research that indicates that we receive approximately 18 forms, directives, new rules, form letters, etc. per month.

Over the past three years, colleges and universities in the United States have received over 460 new documents that we have to read. I can't read that many. I can't understand that many. We need to have our own bureaucracy to deal with that bureaucracy, and that is something that I hope the committee will also look at, to help make us make ourselves more efficient so we can better serve students.

Thank you.

Chairman McKeon. Thank you very much.

Mr. Bodofsky?

Mr. Bodofsky. Mr. Chairman and members of the subcommittee, thank you for the invitation to testify.

I am Irv Bodofsky. I am Director of Financial Aid at the State University of New York Health Science Center at Syracuse. I am testifying for the National Association of Student Financial Aid Administrators, a membership organization representing nearly 9,000 financial aid administrators at over 3,200 schools.

I am serving as NASFAA Commission Director, overseeing the work of two committees involved in the development of its reauthorization proposals. Our recommendations for changes are complete, interactive, and based on 12 principles attached to my testimony. We challenge the Congress to produce effective legislation that meets the postsecondary financing needs of Americans.

Our recommendations will enhance and improve student access to postsecondary education. It is important that this reauthorization build on what works well in the current system.

Progress can be achieved in many areas without significant budget costs. These recommendations will bring savings to taxpayers and postsecondary institutions, thereby benefiting our students and their families.

I'd like to highlight our recommendations in four general areas. The grant loan imbalance. Our recommendations seek to restore the purchasing power of federal grants by authorizing the federal Pell Grant as a true entitlement and address the increased reliance on student loans by providing responsible loan limit increases for groups of students who need them, while enabling schools to limit student borrowing, where appropriate.

The structure of the federal student loan programs. Our recommendations seek to reduce the cost of borrowing for students by eliminating the origination fee and insurance premium, maintain both the Federal Family Education Loan Program and the Federal Direct Student Loan Program, while enabling each to operate with maximum efficiency, and continue permitting schools to choose the federal loan program that best serves its students.

Legislative and regulatory relief for students and schools. Our recommendations seek to eliminate unnecessary requirements for students in schools.

Distinguish among schools based on performance. Reinforce the ability of schools to respond to the specific needs of their students and eliminate statutory and regulatory barriers to new uses of technology for distance learning.

The need analysis and delivery system. Our recommendations seek to eliminate formulas that add complexity to the application without corresponding benefits to the student. Add income protection for independent students without dependents, and modify the formulas and data elements to make them more equitable, while retaining strong support for the aid administrators' ability to exercise professional judgment in unusual cases.

The Federal Pell Grant Program and the three Campus-Based programs are fundamentally sound. However, each program is woefully underfunded and unable to adequately serve the financial needs of students and their families. Financial aid administrators understand the frustrations of students and families not adequately served by these programs. These frustrations are fueled by the gap between authorization levels and annual appropriations.

Twenty years ago, the Federal Pell Grant maximum award was $1,400. Since then, lack of real program growth has eroded the program as the foundation of aid for those of limited economic means. In January 1997, The Washington Post noted, ``The purchasing power of the Pell Grant has fallen 37 percent since 1980.'' President Clinton has recommended a $300 increase for FY98 in the maximum award, bringing it to $3,000.

The Post article continues, ``If the expansion is approved by the Congress, the value of the award would still be 27 percent less than it was worth in 1980.''

In the 1992 reauthorization, both House and Senate authorizing committees reported bills containing a Federal Pell Grant entitlement. If the grant loan imbalance is to be corrected, there needs to be an assurance of funding. An entitlement program is the only conceivable legislative option.

Congressional and administration proposals before this Congress would implement a tax credit and deduction for postsecondary expenses. While NASFAA believes middle income citizens should receive a guaranteed education tax cut, we also believe that low income families simultaneously should be guaranteed Federal Pell Grant funding at an award level that keeps pace with financial needs.

We recommend an increase in the maximum authorized Federal Pell Grant to $5,000, with $200 annual increases thereafter. This maximum award recognizes that increased grant funding is necessary to redress both the reduction in purchasing power of Federal Pell Grants and the shift away from grants to loan funding.

In FY97, the federal Supplemental Educational Opportunity Grant Program will provide 991,000 awards. Most recipients have family incomes of less than $30,000. We recommend reauthorization of the SEOG Program with the current matching requirement from schools and retention of the minimum and maximum award amounts.

NASFAA notes that some students who are denied SEOG assistance have greater need than some Federal Pell Grant recipients. Schools should have more flexibility in awarding SEOG to these students. We would allow schools to award up to 25 percent of SEOG funds to other Title IV eligible students.

In FY97, the Federal Work Study (FWS) Program will provide 945,000 student job opportunities. Nearly 70 percent of these funds will go to families with incomes below $24,000. While NASFAA urges schools to use FWS for community service activities, we believe incentives are more effective than mandates. Despite their desire to promote community service, some colleges have difficulty reaching the five percent requirement.

Factors causing this include the school's location, other well-established programs that use all available community service jobs, and an ethic among some community service groups against paid work for volunteer activities. In place of the penalty, we recommend adding a bonus, so that 25 percent of appropriated funds above $800 million are distributed to schools that use at least 10 percent of their work study funds for such activity.

The Federal Perkins Loan Program continues to complement the FFEL and direct loan programs by providing lower interest loans to needy students; 788,000 loans will be made in FY97, with 83 percent awarded to students with family incomes less than $30,000.

We would increase the Federal Perkins Loan maximums to match Part B and D loan programs, and retain the current campus matching requirement. NASFAA also recommends changing to a cumulative default rate calculation in this program. We believe this is a more accurate and fair default indicator than the current cohort rate.

Comparing numbers of borrowers in default is less fair than comparing loan volume in default. For example, a large number of defaulters with small loan balances creates an inaccurate picture of defaults at a school.

NASFAA has submitted a comprehensive set of recommendations, rationale, and suggested legislative language. Additional copies for each subcommittee member will be delivered to you early next week. We encourage you to review this package and stand ready to offer our continued assistance as you develop your reauthorization legislation.

I want to thank you again for the opportunity to testify today. I look forward to answering any questions you may have.

Chairman McKeon. Thank you very much.

Dr. Lewis?

Ms. Lewis. Mr. Chairman, Mr. Kildee, members of the subcommittee, good morning. Thank you very much for your invitation to be with you this morning.

I am Shirley Lewis, President of Paine College in beautiful Augusta, Georgia. My college is a member of the United Negro College Fund, and it is my privilege to be here this morning on behalf of UNCF. We represent 55,000 students, 40 college presidents, and, as you know, we are headed by the wonderful William H. Gray, III.

Each UNCF college has a wonderful legacy of achievement. Perhaps one of the most outstanding statistics is that UNCF schools represent three percent of the colleges and universities in this country, yet we are graduating 35 percent of the African-Americans who go on to receive bachelor's degrees in this country. Each college has a wonderful legacy, and Paine College, of course, is no exception.

We are the college which produced Frank Yerby, the internationally acclaimed author and filmmaker who wrote ``The Foxes of Harrow.'' We are the college which produced Charles Goode Gomillion, whose landmark case before the Supreme Court, Gomillion v. Lightfoot, is still cited in law schools. We are the college which produced Dr. Shirley McBae, the first African-American Associate Dean at the Massachusetts Institute of Technology.

We have produced six college presidents, eight Methodist bishops, and we have faculty in elementary, secondary, and colleges across this country, including Wayne State University, the University of Las Vegas, Meharry Medical College, and, of course, my own Paine College.

Our specialties at Paine are, within the liberal arts configuration, science and teacher education. We have a 100 percent teacher placement rate in the Augusta area. We did a survey of a recent 10-year period and found that we had produced 22 people who had gone on to get doctor degrees in health education. Most of our students are from the State of Georgia, but we do have students from California, Michigan, Washington, D.C., Wisconsin, Minnesota, and we are still growing.

I want to tell you a little bit about some of the wonderful things that happened at Paine as it relates to our contemporary students. We have a woman athlete who was most valuable player in basketball and most valuable player in volleyball, from Los Angeles. And, of course, that's wonderful in and of itself, but this top athlete is a top academic scholar being a member of our honors program, going to graduate school probably at USC next year.

Our co-valedictorians this year is an African-American woman and an African-American male have both been accepted to graduate school and will enter in the fall, Tasha is going to the Medical College of Georgia to pursue her doctorate in nursing education, and Woodrow is going to Morehouse School of Medicine for his M.D. degree.

One of my favorite, favorite stories about student successes concerns a young woman named Michelle, who graduated in 1994 as I came to Paine College. She first stepped foot on Paine College because she was a participate in the Upward Bound Program. She said every week someone in Upward Bound told her to go to college, so she eventually thought she should go to college. She said the teachers there, many of whom worked also at Paine, made her think that she could graduate from Paine, so she went.

Part of the core curriculum at Paine College, as with most schools, is you have to take at least one science course. She took it, scared to death, because she said she knew that she was not good in math or science. But her science teacher said to her, ``You know, you have a mind for this. Why don't you take another course?'' She said no one had ever said that to her in her life, ``You're good in science.'' So she took another course, and she took another course.

She was mentored by one of our trustees, Dr. Mack Gibson, who worked at the University of South Carolina, so she did internships with him. She went on to work at Savannah River Site Nuclear Plant in South Carolina and became an expert. Now, you have to listen to me, because I learned this from her. She became an expert in the effects of toxic substances on creosote fungi. Now, I don't know what I'm talking about, but she does.

So when she graduated from Paine, she received a grant to do Bioremediation research, and when she finished that she went on to South Carolina to graduate school where she is now pursuing a doctorate degree in microbiology and will probably be so gifted that I won't be able to afford to hire her on my faculty.

But all of these achievements have been possible because these students are primarily dependent on some source of federal aid, including the Pell Grant. Eighty-five percent of UNCF students receive Pell. Fifty-nine percent, rather, receive Pell; 85 percent receive federal funds. Seventy-two percent of my students at Paine College receive Pell.

It is a wonderful blessing to me and to our administrators, because it helps us not over increase our tuition. It helps our students not to become completely zonked by loans, although most of their packages are some form of a loan.

I am grateful to Representative Clay for proposing an increase in Pell Grants, and to Representative Fattah for providing or recommending an incentive for elementary students.

Our recommendation to you is that we ask you to continue your stellar work in helping to assure that the door to educational achievement remains open to these gifted students. We support the idea of the $300 increase in FY1998-99, and in FY2000 we hope that there will be the award of $3,600 in Pell, and that thereafter you support raising Pell Grants in some form that conforms with consumer price indexes or some inflation-based index.

It is going to be absolutely necessary that we have TRIO programs to keep the door open to the door opener. And we hope that in the future years any new SEOG funds will be based also on the enrollment of Pell students.

Most of all, I thank you for your leadership, your patience, your interest and willingness to listen to us. I praise and thank Representative Norwood from Georgia for introducing me.

Mr. Chairman, you're going to have to put me on your California list, because I grew up in the Bay Area with a B.A. and master's degree from the University of California-Berkeley and a doctorate from Stanford. So you have to call me one of your home girls, too.

I welcome each and every one of you to Paine College whenever you are in the Augusta area. Since 1882, our mission is, of course, serving the underserved, which we consider primarily to be those persons who used to be called the freed men and women. But our charter in 1882 said then, and says now, we are open to everyone, regardless of race, point of origin, religion. So in a way you can also think of us as one of Georgia's first affirmative action institutions.

Thank you for your patience.

Chairman McKeon. Thank you very much.

I appreciate your testimony and the things that you have been able to tell us in addition to your written testimony, which we read through.

We have been holding these hearings now. We started January/February field hearings around the country, and this is the first one in Washington. But we have had the opportunity already to get out and hear your stories. Some of your requests are different and some are similar.

But we have over 7,000 postsecondary schools in this country, and they are doing some great things. We hear some real negatives, but all of the schools I visit, and all of the people I talk to, I hear some great things happening. Maybe one of the biggest things we can do is just try to spread some of the good things, spread some of the word, so that maybe we can dispel some of the negative things that are out there being said.

Let me ask a couple of specifics. One of the problems, major problems, that we have in the country is our national debt. We now have a national debt of over $51/2 trillion, and even with the balanced budget agreement, that debt will be increased for the next five years, at a declining rate, but it will still be increased.

And so by the year 2002, if all goes well and we reach the balanced budget, if all goes well we'll reach it before that, but if we go on the plan that we now have, in the year 2002 our debt will probably be over around $6 trillion. We then, as now, will be spending more each year just on interest than we are on our national defense. We are spending now about $300 billion a year on interest.

The President, last year, said that we shouldn't add any new programs until we have a chance to review the programs that are now in place and see what is working and what isn't working. We have been working on a program, we have found over 760 federal programs at a cost for education that are running now about $120 billion a year.

If we had unlimited funds, the President, after saying that, then proposed some new programs: the Hope scholarship, the tax incentive credits, and several other programs in the education area. One of the questions I have asked at each of our hearings is: if we had unlimited funds, would you like all of these programs?

The second question is: given the fact that we don't have unlimited funds, and you had to make a decision with the limited funds that we do have, would you rather see those funds go into the Hope scholarship, the tuition credit, some of the new programs that have been proposed, or would you rather see the Pell Grant expanded, Work Study expanded, SEOG funds, TRIO, the programs that you have been talking about today expanded?

I would like to have your input on that.

Ms. Van Hook. I think one of the challenges that is overwhelming for me to think about what you have to do is to see the big picture, because when you're talking about opening the door and providing Pell Grant funds for someone to attend a college, you also have to look at the other side of it, which is how long have they not been productively employed in the workforce? How long have they not been contributing something back in?

From my perspective, I think that increasing the Pell Grants so that students can have an opportunity to get in on the ground floor is critically important, because when people don't have a chance to go to college, and they end up on welfare, many times they stay on welfare. And as you know, we're having a welfare crisis in this country.

It is hard to get generations of people to change their mind. So I think that the key thing is to try to get people through that open door when you can, as many as you can.

Connected to that, though, is creating some kind of sense of responsibility for the students to make good use of that money while they are there, and part of that ties back to the earlier program in the elementary schools and the junior high schools of creating an incentive for people to want to go on.

The sooner that you start to want it, the more committed you are to persist and to go through and get it. Then you do some planning along the way. It's not just a little snapshot here. When I was in elementary school, I saved my allowance to buy the one savings stamp, the quarter savings stamp, every Thursday at lunch. And ,of course, the day varied depending on which elementary school I was in.

But I started to value an education very early on. I saved my very first little stamp book that I had, because that represents to me something that I set as a goal very early on, and fortunately I had the ability to pursue that. So, for me, it would be keeping as many Pell Grants, as much money in Pell Grants out there as possible.

Mr. Malicky. I'd be happy to speak to that, Mr. Chairman.

First, I would want to say that all of the college people that I know are very concerned about the federal deficit. We are concerned about balancing the budget as much as the Members of the Congress are. We think that is a high priority for the nation's future security.

The second thing I want to say is the programs we have work, and because they work, what they need is funds, not new nuances. By and large, they are very effective programs, and they need to be fully funded.

I do think that tax incentives have value, because they reach all Americans. Tax incentives that are being recommended for college tuitions, the credit, and so forth, have value, because they reach all Americans. So they should not be discounted. They should be looked at very seriously, and I think everyone would be helped by that.

Mr. Turan. Mr. Chairman, I would agree with my colleagues that all of the programs are very important. I think I would also agree, though, that clearly the most important program would be the Pell Grant Program. And if anything has to get first attention, hopefully it would be the Pell Grant Program, and hopefully it wouldn't stop there.

However, I would like to reiterate that there are things that can be done that might make or give students an opportunity of choice, an opportunity of access that can be changed that might not cost any more money, that might not impact on the deficit. And I think that we need to look at those things and do those things as well.

Thank you.

Mr. Bodofsky. Mr. Chairman, as a financial aid administrator, I am sure I speak for my colleagues when I say that we would very strongly encourage full funding for the Federal Pell Grant Program. I can tell you that as a parent myself with two children in college, I do have options that I can exercise to help finance my children's education. I can borrow against our house. I can make changes in my retirement program. I do have options. They may not be pleasant options.

They may not be options that I can deal with for long periods of time. But those options are not available to the members of our society who do not have the kind of income opportunities that a college education has afforded me over the years.

Many of my colleagues feel exactly the same way.

Ms. Lewis. Mr. Chairman, Paine College, the UNCF schools, and my colleagues here at this table I am sure are all working to do the things that we can within our institutions to make sure that our students grow up with a sense of responsibility that they do all that they can to help us in our quest for quality education and full funding.

I would hope, as you do, that we would never be at a point where we have to exchange one kind of support for another, and I appreciate your sensitivity in that.

But I want to underscore what my colleagues have said. I view, and the UNCF sister schools view, the Pell Grant as really a sine qua non. But I would hope that as we find ways of diversifying the way we support higher education and reduce the debt that we never do it in a way that stops Pell from growing. Pell needs to increase, not be exchanged or made at variance with anything else, in my opinion.

Ms. Fuller. Mr. Chairman, to answer your question as well, if we had unlimited funds, I think certainly programs like the tax benefits, as long as a student is not punished for their educational choice, and that is available to them regardless of where they want to attend a college, is something that I would wish for.

Also, I think Congressman Fattah's proposal, which is like a Head Start idea of getting children interested in going to college is I think we used the word earlier magic and something that is important to instill in these young people's minds as they are going to school. That this is a hope, this is a possibility.

I said that financial aid programs make dreams happen. It's because these students had a dream, they had something in mind very early in their life. If we don't have unlimited funds, I have to endorse what is being said by the panel here that the Campus-Based programs and the Pell Grant programs are working.

The beauty of these programs are that it does treat students equally. Campus-Based programs allow for us as institutions to look demographically at our students and appropriate funds to those students because of what their particular needs are.

Thank you.

Chairman McKeon. Thank you.

Let me just give you a couple of statistics.

For every $100 increase in the Pell Grant, and this year there has been a proposal from the administration to increase that to $3,000, and I would like to look at increasing that even further, but there is a cost of $310 million for every $100 increase. So we are faced with choices. We do have to make choices.

One of the things that the President talked about is the America Reads Program. He also came in the last Congress, or when he first became President, with the Americorps Program. I supported that when I ran for Congress. I thought the idea of volunteerism was great. I served on the Board of Directors of a local hospital. We couldn't run that hospital without volunteers.

But I have since coming to Congress, and since that program has been instituted, I have found that it costs us $27,000 a year for each volunteer. We could take that same money and put it into work study and take care of 14, 15, or more students a year and let them go into the schools and help teach reading.

I think that there are some creative things that could be done, and the programs that are already there, that are already working, if we could increase the funding for them I think that would be significant.

Mr. Kildee?

Mr. Kildee. Thank you very much, Mr. Chairman. First of all, in case I don't get a chance later, I want to commend you and the staff for assembling such a great group of witnesses. It's very, very good, very broad and very informative.

To Dr. Lewis, my son was stationed at Fort Gordon, and it's a very beautiful area down there and I enjoyed visiting him many times and I hope to be down there again.

Ms. Lewis. Please come visit us.

Mr. Kildee. Let me ask you this. I'm going to ask a question primarily to Dr. Malicky and Mr. Bodofsky, but others may answer, too.

In some parts of the higher education community, there is support for decoupling supplemental grants from the Pell Grants in order to help the most needy students. Isn't that the reason that the two programs were tied more closely together in the last two authorizations. To help the most needy students?

You mentioned the kind of the packaging you put together for Tanya I think in your school there. Maybe the two of you could give us your views on the decoupling or not decoupling of those programs.

Mr. Malicky. Are you referring, Mr. Kildee, to the proposal for the kind of…

Mr. Kildee. Well, for example, the supplemental grant being used along with what used to be called the basic education grant, now a Pell Grant.

Mr. Malicky. We think, you know, to the casual observer, to the person who is not really familiar, as everyone in this room is, it looks like a patchwork that doesn't make sense. Here's a program, here's a program, here's a program. To the sophisticated observer, each has a valuable function, and we think if they were merged together we would lose immensely. We would lose for the student, most importantly, because the funds would probably not be there, and we would lose the matching funds from the college, because the college must match those funds that come from the federal government.

Mr. Kildee. I was referring more to the Pell Grant, and then the use of other grants, the SEOG, to add on to that Pell Grant. And there has been some who say we should decouple the two and give more authority to the universities to make those decisions.

Mr. Malicky. Well, again, I would just say the Campus-Based programs, where the financial aid administrators have the authority, are exceedingly valuable. They fill gaps that are not otherwise being filled.

Mr. Kildee. Okay.

Mr. Bodofsky. Yes, sir. Thank you for bringing this point up. We believe it is a very important point, and we do recommend a partial decoupling of these two programs. Let me give you two examples why.

Let's think of student A, we'll call it student Albert perhaps. Albert's father makes $30,000 a year. Albert qualifies for a minimum Pell Grant at my institution where tuition is $3,400 per year, and then there are living expenses on top of that, and many students' curriculums require that they go to summer school, thereby increasing their expenses. A minimum Pell Grant is very nice, but it doesn't go very far.

We use SEOG funds to help fill the gap, meet the need of students like that, who need some additional funds and who would otherwise be overburdened by student employment and by student loan programs.

If because the economy has improved in the State of New York, Albert's father is the beneficiary of a $1,000 raise next year, Albert may no longer qualify for that Pell Grant. If we have a coupling of the Pell Grant Program and the SEOG Program, we will also lose the ability to assist Albert with the SEOG, and lose that part of his financial aid package also.

Now, the $1,000 certainly is helpful to the family, but I think you would agree, sir, that a $31,000 income family is not that much better off than a family with a $30,000 income.

Let me offer a second example to you, and that is the example of the students who have to go for three semesters: fall, spring, and summer because of the requirements of their academic program. This is an issue that we deal with, with the associate degree programs at my institution and heath care facility, programs such as X-ray technology. A student going in that particular program has costs that are 50 percent higher than a student who goes for only two semesters.

I would contend that the student, again, who may be just over the cutoff line for a Pell Grant because they have those additional costs for summer school, not costs that they want to incur but costs that are required because of state licensing needs and our accredited needs, that student actually has greater need than a student who is receiving a Pell Grant but is in only a two-semester program. So these are examples of why we believe that a partial decoupling of the program would be of benefit.

Mr. Kildee. I would like to see how we should do this, because I think it's a very central question, really. 75 percent of all Pell Grant funds go to funds with families whose annual income is under $20,000 or less. So they really are going to need something besides that Pell Grant to pay for a college education, it would seem. And that's why we have tried to couple them a bit.

So I'd like to continue our exchange with you and we may have some questions we would submit to you in writing, if you could respond to those.

Mr. Bodofsky. We would be happy to, sir.

Mr. Kildee. Anyone else at the table like to respond to that?

Ms. Van Hook. Yes, Mr. Kildee. I think that it's a difficult challenge, because there does need to be some local discretion. But on the other hand, if the basic amount is not enough, and a little of SEOG money which comes after you've been awarded a Pell Grant, you can't be eligible for that right now, as you know, until you have the Pell Grant. This is going to make the difference between staying in there and completing a program or dropping out because all of a sudden the rent has gone up or the cost of books, as we all know, has gone up astronomically. We're hoping they all go to CD-ROMs and they give them away.

But until we get to some kind of creative other paradigm about thinking, I think we have to be real careful about taking away that little bit that would make the difference.

You referenced earlier about the cost of the America Reads program. One of the things we're talking about at College of the Canyons right now is funding some local college work study beyond what we already have, and to work on the campus and in the community, not only to get the workforce training exposure and networking in business, but also to promote self-responsibility and persistence.

One of the things we've toyed around with is requiring people who would be eligible for college work study, which would be matched by funds from the businesses (we'd put up $3.50, they'd put up $3.50) the student would earn $7 an hour, and, therefore, be less reliant on federal funds.

It is currently in the formative stages, but they will need to commit to tutoring a student 10 hours a month at a local junior high or elementary school in conjunction with the intent of the America Reads Program.

It seems like maybe we can get to containing some of these costs, yet accomplishing things in an exponential way, if we would just get outside the nine dots and think about repackaging it.

Ms. Lewis. I might add that…

Mr. Kildee. Yes, Dr. Lewis?

Ms. Lewis. …that I certainly hope to work with you in terms of looking at this issue. But at first glance and first thought, the coupling of Pell and SEOG at Paine College are really looked at as a very vital kind of relationship. It is a way in which we distribute our meager resources to include the maximum amount of students and to work very hard to keep the heavy loan portion that low income students who participate with us do take on, because they want to go to a private school like Paine College.

From our perspective, we would see the relationship of Pell and SEOG remaining the way it is. That would work best for us in terms of our financial aid package.

Mr. Turan. Mr. Kildee, we did a study about a year ago, and we looked at students who had dropped out of school, and we looked at their income levels, and we looked at the amount of financial aid that they received. And quite surprisingly to us, it was the lower middle income student who had the highest dropout rate.

Now, that's not to say that lower income students don't need more assistance, but I would agree with my colleague to my left that we really do need some discretion, because each individual needs to be treated as an individual. And there are times when it's more difficult for somebody who has a slightly higher income to afford education than somebody who is at a lower income level.

Mr. Kildee. You know, all analogy is limp, but I can recall one time Nikita Kruschev talked about spreading things too thin. He said if you have seven unclothed men and you have one suit, does it do much to cut the suit into seven different parts? And, you know, I guess that's what we're very often trying to do.

Thank you very much, Mr. Chairman.

Chairman McKeon. Thank you.

Mrs. Roukema?

Mrs. Roukema. I don't know whether I'm glad I got back here or not, Mr. Chairman.

Mr. Kildee might be more than a little surprised at some of the things I'm going to say about if it were up to me I'd reinvent the Pell Grant Program. I think we have a Vice President that talks about reinventing things, and I would reinvent the Pell Grant Program. I'm not going to bore you with that, except to say that I'm not one of those rich Republicans that doesn't know what I'm talking about with respect to Pell Grants.

It was before Pell Grants, and we won't talk about how many years ago, but my husband would never have gotten through college or medical school without a scholarship loan program that was his equivalent to Pell Grants, except that he had to pay it back.

But I do have another very sensitive subject to talk about relating to Pell Grants. That is and I was the primary author of some major reforms that we got through on student loan defaults, and I think you're familiar with those.

You probably are also more familiar than I am with the fact that our application of those default rate programs to Pell Grants is no longer in existent, and yet we've had tremendous success with reducing the scam schools, getting rid of the scam schools, and reducing the default levels for student loans in both proprietary schools and two- and four-year colleges, with those reforms.

Now, however, the Pell Grant Program was omitted from those reforms. Congressman Bart Gordon and I were able to get it into one level through an appropriations process, but we're going to try again this year to make the default rate standards of 25 percent over three years applicable to Pell Grants.

I have extraordinary numbers here. By the way, we're not just talking about benefiting taxpayers, although the taxpayers are greatly benefitted. We're talking about helping more students, reliable students at reliable schools, and making the money that we have go farther by applying the same standards, not having a double standard for Pell Grants as opposed to student loans.

Now, I just don't understand why the education community does not accept its responsibility here in endorsing the kind of reform that would help both students, taxpayers, and the ethical standards of your own profession. There are, without question, scam schools out there. And it is the responsibility of students who get an education and get a job to pay it back.

I just don't understand why I have not had the cooperation, not only I, but Mr. Gordon and others who have supported us, have not had the cooperation of the education community in this issue.

I don't know whether I've asked a question or not. Is there anyone that would like to respond?

Mr. Turan. I'd like to comment, if I may.

Mrs. Roukema. Yes, and I'm from New Jersey, and I know I'm not far from you on Long Island. But I'll tell you, the numbers are very, very dramatic. They work. They work with proprietary schools, as well as all other schools, and have saved in a very short time close to $6 billion of taxpayer, but again, I'm talking about more money being available to more students when those funds are repaid.

Go ahead.

Mr. Turan. Well, let me just say that your concern about scam schools, I think as you call them, is a concern that probably everybody at this table shares. These are people who masquerade as part of our profession, and we're probably more offended by them than you are.

Mrs. Roukema. Well, you're reflecting my own opinion, but I haven't seen any cooperation from the other side.

Mr. Turan. The question is: how do we do it? My concern with default rates is that a default rate is an indicator of something. Sometimes it's an indicator of a real problem. But higher education is much too complex to just look at default rates alone. I would say it's an indicator that we should go in and take a look. We have accrediting commissions that should be doing those things.

It's more of an indicator of poverty, it's more of an indicator of the lower socioeconomic classes having difficulty in finding jobs than anything else, and that's what we're concerned about. We're concerned that it does discriminate against the wrong people, and we don't want quality institutions and quality students…

Mrs. Roukema. If you will excuse me.

Mr. Turan. Yes.

Mrs. Roukema. We are talking about students that get an education and get jobs who are not repaying their loans. The Pell Grant rate has to apply in the same way. I don't understand your logic there at all.

Mr. Turan. Well, if you're speaking about students who received loans and then went out and got jobs and defaulted, because they just didn't feel like paying back, I'm with you 100 percent. We need to go after those students. But I think what we're talking about is institutional eligibility, and to hold the institution accountable for that seems to stretch the logic as far as I'm concerned.

Mrs. Roukema. All right.

Someone else, please?

Ms. Van Hook. Yes. I'm really glad you came back, and I'm really glad you asked this question. I'll just tell you what happened in my college, and maybe that will help.

We had, two years ago, received word that we were going to be given extra notoriety in the Chronicle of Higher Education in an upcoming edition, and we got a heads up on it so that we could get the word out in our local community and try to contain the damage that was going to be done because we had exceeded a 25 percent default rate for the third year in a row. All of the students who go through the Pell Grant approval process were subject to not being eligible to receive those funds.

In our situation, what that 25 percent default for three years in a row meant was we had 36 students who had entered their repayment period in 1993, out of 10,000 a year, and nine defaulted out of 36. One of the students who defaulted in 1992 had died. They were not around to repay the loan, and yet it was all over the Chronicle of Higher Education. We got one of the special notices there that our college may lose this.

Mrs. Roukema. You could appeal that.

Ms. Van Hook. Well, we did.

Mrs. Roukema. That's not an issue.

Ms. Van Hook. No. We did appeal it, and it took a lot of time and energy, and we did get that appealed.

But I guess what my point is is that we have 10,000 students a year, and for 2,000 who may receive Pell Grants to be at jeopardy for receiving those Pell Grants when the students who have defaulted are no longer at College of the Canyons and when College of the Canyons did not approve them to give them the loan in the first place, it seems to me that that is why you're probably facing some opposition.

We don't decide at the local college who gets a loan and who doesn't get a loan. I think in California we've had extensive discussion about this, and I think from our perspective we are more than willing to be held accountable for what we have control over. We do not have control over who is given approval to receive a loan.

Mrs. Roukema. Are you talking about the loan standard is there. We're now talking about the Pell Grant. But you're saying that you're not…

Ms. Van Hook. Colleges don't decide who gets loans.

Mrs. Roukema. Who gets the grants.

Ms. Van Hook. Right. No. They don't decide who takes out a loan, unless they're in the direct loaning business.

Mrs. Roukema. Maybe we're not communicating. Maybe I misunderstand something here. I'm simply saying that the school should be ineligible for Pell Grants as well.

For example, Associated Technical School in Los Angeles, California, had a 65 percent default rate in '92, 35 percent in '93, and 63 percent in '94. Now, during that period of time, it received $6.4 million in the grant program. Okay? However, that money could be used in other grant programs for other students when this school does not qualify for a student loan program. I don't know why there should be a double standard. That's what I'm saying, bottom line.

Ms. Van Hook. Okay. I mean, I can hear what you're saying. All I'm saying is if the college does not approve the loans for the students, and if those of you over there are the ones that take the loans, and all the rest of us out here are the ones that are on financial aid through the Pell Grant Program, and one of you, just one, doesn't repay your loan when you enter your prepayment period, then that means nobody out here can get a Pell Grant. I believe that's where you're meeting with resistance.

Mrs. Roukema. Well, we'll take that under consideration. My time is up, and let's see if Dr. Malicky and Ms. Fuller have comments.

Mr. Malicky. Briefly, first, every college I know is concerned to stamp out fraud and abuse wherever it exists, and we applaud the efforts to do that. Secondly, I think I would say that we are concerned about rules and regulations where all colleges and universities are required to jump through the same hoops no matter what their default rates are.

We think some differentiation should be made based on historic patterns of default rates. Ours happens to be in about the 3 or 3-1/2 percent range default rate. We think it ought to be zero, but that's different than 30 percent or whatever. Yet, we all go through the same processes of this.

I am not sure how I feel about putting Pell in the same category, however, because Pell is so central to assisting students who have very little. I think that one has to be looked at very carefully. I honestly haven't looked at it. I'll be glad to and I will talk with our financial aid people about it and would be happy to talk with you further about it if you'd like.

Mrs. Roukema. Yes, I would be happy to talk with you more extensively.

But also, our record is open, is it not, Mr. Chairman, if the members of the panel want to add something to the official record on this subject? Yes, thank you.

Ms. Fuller?

Ms. Fuller. I'm aware of your legislation, and I, frankly, cannot disagree with the premise that you have. I am embarrassed constantly by schools that you, for instance, the school in Los Angeles that you gave reference to. This makes our job continually difficult to try to show that we are out there as good institutions doing what we say we do and promising to educate students that enroll with us.

With regards to the school in California, there was obviously something wildly inappropriate going on, and there are powers that be that have the ability to turn off those funds or look and monitor things that are going on like that. And some people were not looking, whether it be state or federal officials, that I think have opportunities to look at things like the imbalance of dollars versus the amount of students going to that institution.

I know it has been said in the past, and it is probably a worn-out kind of, if you want to say, excuse, but a lot of us are located in minority areas where families are coming first-time, first-generation students to higher education. The family themselves have had no experience in borrowing. They have no idea what it is to sign a promissory note.

That is not to excuse what is going on at the school. We at Fashion Institute take that as that's another step that we have to add to our counseling of students. I have two full-time people that do nothing but default prevention activities and loan counseling. We have a class for first-time borrowers that they must attend, board sessions, and understanding what is a loan, what are the consequences of not paying that loan back.

And it has helped us as an institution where we would definitely have a much higher default rate than what we have at this point, because having these individuals who have the personal attention and a contact for that student when they graduate.

I don't know what the answer is, but it's something that I would certainly like to write with you later some other ideas.

Ms. Lewis. If I might add…

Mrs. Roukema. Yes, Dr. Lewis?

Ms. Lewis. …one of the things that we have done at Paine College, as I hear many members of this group also saying , is we have worked very hard to educate our students on the importance of repayment, of the obligation of repayment.

Probably something that has meant more to the students than some of those families that we have been able to be in touch with is the rule and regulation of how this operates. We have many people for whom this just is not on their agenda, and I don't mean that they mean to ignore it from an ethical point of view. They are totally unfamiliar with it. So we work very hard to not have that be part of the problem.

But I think to answer the question that I think you very sincerely asked about why you do not have much support is that what happens to us as people responsible for colleges is that regardless of why it is that the person is not repaying, at that point it is the person not paying but the weight of the punishment, so to speak, falls on us. So that is the point of resistance.

It's not to say that we don't want to educate people or make the rates decrease, but the first thing that happens to me is, oh, my God, that person over there is not paying their loan, and there goes my college. That is what is causing most people to appear to be resisting.

But I look forward to talking with you further, too, because I think we can find some mutual ground.

Mrs. Roukema. I do think it is important. Mr. Bodofsky, please?

Mr. Bodofsky. Thank you. If I might add, this is the reason why the Financial Aid Administrators Association is recommending that colleges have the ability to set lower rates for student borrowing. There are many of our colleagues at low-cost institutions who feel students are borrowing simply because the money is there.

The only control that we have within this program is to try to counsel those students away from using that money. That is a very time-consuming process, and unfortunately it is not as successful a process as we would hope it could be. And for that reason, we think that there needs to be a little bit of authority put back to the institution.

Mrs. Roukema. That's interesting.

Well, Mr. Chairman, thank you for your indulgence here.

I'd particularly appreciate any other ideas that you might have, especially on the supervisory question at the state and federal level, if there are review systems that we can improve at that level.

Thank you very much.

Chairman McKeon. Thank you.

Mr. Fattah?

Mr. Fattah. Thank you, Mr. Chairman.

Let me, first of all, thank the panelists, as has already been done, and to Dr. Lewis, my predecessor_

Chairman McKeon. Is your mike on there?

Mr. Fattah. To Dr. Lewis, my predecessor, Congressman Bill Gray is the President of the UNCF and he's doing a fabulous job as are all of the UNCF schools. I want to welcome you, along with all of the other panelists, and I appreciated all of your testimonies.

I did want to just comment on the back and forth that just took place. There is a problem with proprietary schools in that some of them have not acted appropriately. And then we do have to be careful, though, when we deal with default as the only indication of those problems.

I mean, there are other issues, whether there are qualified staff people, whether there is some type of admissions criteria, and we want to be careful that our access universities, like community colleges and colleges that focus in on at-risk students, don't get penalized as we're trying to deal with one problem, which is people who are in the business of making money and are really trading on the dreams and aspirations of people on one level, and other groups who are really in the process of trying to provide an adequate education and open doors of opportunities to people.

So we have to be careful as we go forward, and I think the illustration of the numbers from your university where, you know, nine students on a default could have an impact, a devastating impact on the opportunity for thousands of others, is not an appropriate way for us to proceed. We should not limit if we want to go after these problems and I have a lot of experience at this.

I headed up the proprietary committee in our senate back home looking at this problem in Pennsylvania when I was in the senate, and there are some real problems. I mean, you can have for profit schools that admit someone who can't read and write into a computer programming program which they know the person is going to drop out of in, you know, six weeks or seven weeks, and all they want to do is process the paperwork.

But that's an entirely different situation than somebody taking a shot at a kid into a community college and helping them through some remedial programs in English, and so on, so that they can get in gear to pursue an education. I think default is just one indication of some issues that should be looked at.

I do appreciate the Congresswoman's comments. I'm sorry she left. But, you know, many of the students who are victimized, many of the people who are victimized come from fairly disadvantaged backgrounds. So we should be concerned about this, but we need to be careful as we go forward, and I do want to just abbreviate any other comments, because I know the Chairman…this hearing has gone on for a long time. I've gotten my chance to talk, so I'll be quiet.

Thank you.

Chairman McKeon. Thank you.

Mr. Ford?

Mr. Ford. Thank you, Mr. Chairman.

I just want to thank the panelists for coming. I don't have any questions that directly pertain to the subject matter that the panelists have come to talk on. I certainly appreciate how you have responded to both sides of the aisle here.

As a recent law school graduate a year ago and a college graduate just five years ago, I can certainly relate to some of the challenges and obstacles that many of my peers and generation X face, not only at your schools but at the schools throughout the nation.

But I'd love to correspond with you perhaps outside of this setting, and even some of the folks at your school, with regard to some of the other issues we're discussing here: national standards and things of that nature, and how that might impact admissions and admission standards at your schools and the broader higher education community.

So again, I thank you, and I thank the Chairman.

Chairman McKeon. Thank you. Can you imagine such a young guy in Congress?

[Laughter.]

A recent graduate of law school, so he has probably a different perspective than we who are a little older.

Mr. Kildee. He graduated from the University of Michigan Law School, too, which is…

[Laughter.]

Chairman McKeon. We do appreciate you being here today, and appreciate your testimony.

And one of the things we would like to stress is that as you leave here you may think of something that you wish you had said that you didn't get the chance to, and the record, as has been stated, is open. We would love to hear from you. As we go through this process, if you'll watch us, and where you see us heading in the wrong direction, if you'll let us know, and we will take into account your recommendations.

There was one other thing that we didn't cover. It was mentioned in testimony, and I would like you to follow up on it. If you see specific things in the current law that we could eliminate, such as regulations. I know there were comments made of requests for letters, requests that the government sent you to fill out to send back, wondering if anybody here ever reads them.

If you can give us specifics that we could work on as we go through this process, one of the things we want to do is eliminate unneeded regulation.

Thank you very much. We'll end this hearing at this time.

[Whereupon, at 12:17 p.m., the subcommittee was adjourned.]