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House Education Subcommittee Discusses College Affordability, Student Debt Solutions

By Maria Carrasco, NASFAA Staff Reporter

The House Higher Education and Workforce Development Subcommittee held its last hearing before its August recess on Thursday, touching on issues with college affordability, student loan debt, Pell Grants, gainful employment, price transparency, and more. 

Rep. Burgess Owens (R-Utah), chair of the subcommittee, began the hearing by noting that “outdated measures of quality” and “virtually zero transparency of value” have distorted the postsecondary education marketplace. He added that one-third of colleges “leave students worse off than if they had never enrolled in the first place.”

“We need to understand that the devaluation of the four-year college experience is exacerbated only by blanket federal bailouts, one-size-fits-all debt relief, and overburdensome regulations,” Owens said. “Restoring the value of a college degree requires thoughtful, structural reform to the Higher Education Act.”

Lawmakers discussed college price transparency and issues with some institutions not providing students clear and standard information in their financial aid offers. Andrew Gillen, senior policy analyst for the Next Generation Texas initiative at the Texas Public Policy Foundation, said a possible solution to lowering college costs would be legislation on college price transparency. 

“A new law that increased price transparency would increase student and parent awareness of the cost of college,” Gillen said. “And their increased resistance paying those high costs would enforce the market discipline on the colleges.”

Further, Rep. Virginia Foxx (R-N.C.), chairwoman of the House Committee on Education and the Workforce, asked witness Michael Horn, author and founder of the Clayton Christensen Institute for Disruptive Innovation, how institutions can create alternative pricing models to be more transparent for students and families.

Horn pointed to four examples of alternative pricing models, including Western Governors University’s subscription model, where students pay tuition for a six-month term and the number of classes the student completes in those six months is up to them. Additionally, he noted some institutions use a four-year pricing model so that there aren’t “surprises” from year to year. 

Other methods include tuition resets, where institutions reduce the advertised tuition price to a universal baseline, and employer-paid tuition programs, such as Paul Quinn College’s program

The lawmakers also discussed the declining purchasing power of the federal Pell Grant and how the maximum award has not kept up with rising college costs. 

Rep. Bobby Scott (D-Va.), ranking member of the full committee, noted that President Lyndon B. Johnson’s intention with the Higher Education Act was that the federal Pell Grant would cover around 80% of the cost of attending a state college. Over the years, however, that has not been the case. In 2021-22, the maximum Pell Grant covered, on average, about 60% of tuition and fees at a four-year public institution — not including room and board, and other expenses.

Stephanie Cellini, professor of public policy and public administration and of economics at George Washington University, said that it is important for all students to have access to higher education, and stressed how the Pell Grant can help expand access for lower-income students. 

“We know from the research that [the Pell Grant] isn’t only important for enrollment in college, but also for completion,” Cellini said. “In fact, it can even raise the earnings of students. Some researchers have found that earnings effects alone from the Pell Grant make it pay for itself many times over. The Pell Grant is incredibly important.”

Foxx also noted that her legislation, the Promoting Employment and Lifelong Learning (PELL) Act, extends the federal Pell Grant for students to attend “high quality” short-term programs. The PELL Act would, among other things, put in place a number of requirements for programs to meet in order to qualify for Workforce Pell Grant usage, including having a completion rate of 70% or better within 150% of normal completion time.

Both lawmakers and witnesses brought up gainful employment regulations as another possible solution to tackle student loan debt. The Department of Education earlier this year released its proposed regulations on gainful employment.

Beyond gainful employment regulations, Cellini said Congress could protect students by making institutions disclose how much they spend on advertising, recruiting, marketing, and lobbying expenditures. She also stressed that Congress should monitor the results of short-term Pell Grants, should those efforts move forward.

As the hearing ended and the House heads to its August recess, Rep. Frederica Wilson (D-Fla.) expressed frustration with the lack of work the committee has done. 

“We have done nothing to address college affordability and ways that are proven to make college more affordable,” she said. “In September … I genuinely hope we address the needs of our country, because they are a mess. And we do not have time for two more years of culture wars, while our students and American workforce needs our support.”

 

Publication Date: 7/31/2023


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