▶ 0:03:30How bad?
▶ 0:04:46I'm sorry.
▶ 0:05:29kind of
▶ 0:06:06We're going to
▶ 0:07:31The subcommittee on higher education workforce development will come to order. I note that a quorum is present and without objections, the chair is recognized to call uh recess at any Good morning and welcome to today's hearing on the subcommittee on higher education workforce development. I want to thank our witnesses for joining us to shine light on how students and families navigate one of the most important and most confusing financial decisions they will ever face, choosing and paying for college.
▶ 0:08:00The process of determining the true cost of college is clouded in mystery. Colleges and universities routinely advertise prices that bear little resemblance to what families ultimately will pay. Too often, aid packages filled with unclear or deceptive figures. This is not how major financial decisions are made in other parts of our economy. Uh when you buy a home, federal law requires clear disclosure so you know exactly what you will owe. When you've purchased a car, consumer protections guard against deceptive pricing.
▶ 0:08:29Yet, when it comes to college degrees, an investment that can rival or exceed the cost of a home, students are left in the dark. The consequences of this lack of transparency are serious. Studies show that unexpected costs are the leading reasons for students to drop students dropping out. Families who believe they're making a sound investment are blindsided by hidden invest hidden Many borrowers are left in the dark without a degree or credential. Taxpayers also suffer.
▶ 0:08:57When students borrow too much, they risk default, leaving taxpayers to foot the bill. We also know that institutional practices such as tuition discounting and aid displacement, make systems even more opaque. College use sophisticated algorithms to decide who gets a discount, often based not on merit or need, but how likely student is to enroll. One student may pay tens of thousands more than his classmate with similar qualifications simply because the way the student's FAA was process.
▶ 0:09:28That is not fair to students or families. The good news is that solutions are within reach. This committee has previous previously advanced bipartisan proposals to bring sunlight to college pricing. Republicans have proposed legislation that would establish standardized financial aid offers to ensure students and families are accurately uh can accurately compare college costs.
▶ 0:09:52We have also proposed improvements to make net price calculators more accountable uh accessible and userfriendly. And we're exploring the concept of maximum price guarantees so families know from day one the most they'll ever pay for a degree. These reforms are rooted in a simple idea. Students and families deserve honesty and transparency.
▶ 0:10:16They should have access to information they need to budget, plan, and make college choices that are best for them without a lawyer or an accountant. Today, we'll hear from experts, including leading economists and a seasoned college administrator. The testimonies will help us recognize where transparency is working and where it's not and what colleges can do to ensure that no student or family faces sticker shock often uh that's often way too late.
▶ 0:10:45I look forward to a strong uh discussion and working with my colleagues to make college pricing make college pricing transparent eliminating the guesswork and empowering students uh enhancing accountability and safeguarding taxpayers. Uh before I I yield to the ranking member for a statement, I want to take a a moment to acknowledge today that chances uh Chance Russell's last days in committee.
▶ 0:11:12Uh for the last six years, first under leadership of of Chairman Fox and now under leadership of Chairman Wahberg. Chance has been a trusted colleague and a true expert in higher education policies across the House, Senate, and Education Committee. He has earned deep respect for his insight and leadership. And most recently, Chance poured countless hours into crafting proposals that became law through a Work that will leave a a lasting mark on the families and students nationwide.
▶ 0:11:40Chance, your creativity, dedication, and hard work have made this team stronger every single day. On behalf of all of us, thank you for everything you've done and you've given, and we wish you the very best. And I'd like to take a few minutes to uh yield to our full committee chair, chairman Walbert.
▶ 0:11:59Thank you so much. Uh that's kind Mr. Chairman. Um Chance, we will miss you. We'll hold it against you for a while that you're leaving us. uh but uh to come in as a new chairman of this committee into into uh student loan debt, pay off all the financial things and know that I had someone who chairman Fox said keep make sure you keep him on.
▶ 0:12:29uh had that that stamp of approval. And then to find out as we sat and talked with college presidents, um financial aid officers and others that I could always turn to you who had the answer whether they wanted to hear it or not. At times it was it was the true answer, but also a willingness to say we will look even further as we get better better numbers and make sure it all works.
▶ 0:12:56That was immensely helpful to me and I'll never forget that. And also to know that you were very capable in working with our friends across the aisle uh to uh to do it in if it possible bipartisan way to take suggestions to take concerns and move them forward. That's was immensely helpful as well.
▶ 0:13:19Um, and then finally to know that you uh scheduled your wedding around all of this work and the sacrifice that that meant. I want you to thank your wife also. I wish you both the best in the future and we know that you'll be around where we will have a chance to work with you. But God bless you, Chance. Thank you.
▶ 0:13:38Mr. Chairman, will the gentleman yield?
▶ 0:13:42Yes. Yes.
▶ 0:13:43Thank you. I I just wanted to add in a statement when they said he works with the Democrats. We've had some very contentious issues in this committee. We sometimes agree, sometimes don't. But being able to communicate and work together has been extremely important. I understand that Chance is going to the Department of Education. So, we'll have somebody there that we can work with and look forward to that relationship. So, thank you very much, Chance, for your years of service.
▶ 0:14:14Okay, we're going to miss you, buddy. For sure. Uh, with that, I'd like to yield to the ranking member.
▶ 0:14:20Thank you, Mr. Chair, and I certainly I want to congratulate the gentleman and thank him for his work as well. Uh, thank you to our witnesses today for for being here. I want to first acknowledge the horrific events that occurred last week. Former Representative Gabby Gford said it best. Democratic societies will always have political disagreements, but we must never allow America to become a country that confronts those disagreements with violence.
▶ 0:14:46This summer, America has seen multiple political motivated attacks because dangerous people turn to guns to express their disagreements. Both parties have been targeted and both parties share a moral and patriotic duty to take meaningful action. Now, on to the topic at hand. Attending a reputable college or university remains one of the most critical pathways to economic su success and financial freedom that that people have have access to.
▶ 0:15:16The cost of higher education is getting higher and higher every year. Uh to the point where getting a degree has become financially unattainable for many Americans. Our higher education system must be an engine of economic mobility for all students, not an instrument for preserving the elite status of wealthy families.
▶ 0:15:36As the cost of college continues to rise, students and families also struggle to to understand the true cost of attendance and how they must how they can expect to spend out of pocket on higher education. Too often, families are left to navigate a complex and confusing system of fees and tuition rates and financial aid options without clear guidance. And this can lead to sticker shock as families grapple with the total cost of a college education.
▶ 0:16:06I spent 40 years on a college campus and I understand what students and families go through. In my home state of North Carolina, uh the North Carolina College Connect program removes barriers and provides direct pathways uh for high school students to apply for and attend college. Programs like North Carolina College Connect cut through much of the bure bureaucratic red tape that comes with applying for college and help students and families understand the process.
▶ 0:16:37But there's much more to be done. Greater price transparency is essential to ensuring that students and families can make informed decisions about their future. Institutions of higher education can and must do more to be more transparent with students and their families about the cost of attendance and about their student aid options. That being said, more transparency will will not address many of the root causes of the rising cost of college.
▶ 0:17:08Right now, our country is is facing a college affordability crisis that has been made exponentially worse by the Trump administration and congressional Republicans. And so the big ugly bill raises costs for current and future borrowers by forcing student loan borrowers into unaffordable repayment plans, eliminating resources to help struggling borrowers and pushing students toward the predatory private loan market by eliminating graduate plus loans,
▶ 0:17:38capping parent plus loans, and limiting access to PEL grants. And to make it worse, in March, the Trump administration ordered sweeping reductions in force rifts at the Department of Education, laying off over half of the staff at the Office of Federal Student Aid.
▶ 0:17:57And so, we've seen reports of calls going unanswered, glitches going unfixed, and and disruptions in colleges abilities to to calculate their own financial aid offers. And so how can we expect colleges to deliver transparency if they themselves don't have the necessary information? At the end of the day, transparency and college cost is a wonderful goal.
▶ 0:18:23But increased transparency is is not going to help families afford the cost of college once they understand the total cost. Addressing transparency is a tiny drop in the bucket compared to the larger issues that students are dealing with. And so I hope that we can have a productive discussion today about transparency.
▶ 0:18:43But we must also keep in mind that the way to that the way to to to achieve affordable education isn't just by making the net price easier to find on the school website. Democrats are committed to ensuring that students have access to safe and affordable higher education that works for everyone, not just the privileged few. Mr. Chairman, I look forward to our discussion today. I thank you and I yield back the balance of my time.
▶ 0:19:13Thank you. Pursuant to committee rule 8C, all members who wish to insert written statements into the record may do so by submitting them to committee clerk electronically in Microsoft Word format by 5:00 p.m. 14 days after this hearing. Without objection objection the hearing records will be remain open for 14 days to allow such statements and such material noted during the hearing to be submitted for the official hearing record.
▶ 0:19:38Um I know that some of our colleagues who are not permanent members of the sub committee may be joining us for this hearing today. Uh I now like to turn to introduction of our four distinguished witnesses. Our first witness is Dr. Andrew Gillan um a research fellow at the Kato Institute here in Washington DC. Second witness is Mr.
▶ 0:20:01Leas Wishing III, vice president of student recruitment and chief marketing officer for Grove City College in Grove City, Third witness is Amy Tatulin. Okay, thank you. Thank you. Thank you, Amy. Uh senior director of higher education for New America and Washington DC. Thank you, Manny. uh and uh Justin uh Drager, the senior vice president for affordability at the Stratton uh education foundation in Washington DC.
▶ 0:20:31Uh we thank the witnesses for being here today and we look forward to your testimony. Pursuant to committee rules, I would ask each you of you to limit your oral presentation to three minute summary of your written statement. A committee member as committee members uh have many questions for you. The clock will countdown from three minutes. However, pursuant to community rule commun committee rule 8D, committee practice, we will not cut you off cut off your testimony till you reach the five minute mark.
▶ 0:20:58I would also like to remind the witnesses to be aware of your responsibilities to provide accurate information to the subcommittee.
▶ 0:21:09Okay. Uh I' I'd like to to uh first recognize uh Mr. Drager for your
▶ 0:21:18Thank you, Mr. Chairman, Chairman Owens, Ranking Member Adams, and members of the subcommittee. Thank you for the uh invitation to testify today. I'm Justin Drager, senior vice president for affordability at Strata Education Foundation. At Strata, we are focused on connecting education with opportunity for more Americans, particularly those with the most standing in their way. Uh price transparency is foundational part of affordability because it helps families make informed choices, budget and trust the system.
▶ 0:21:46And without it, we lose not only dollars but dreams and talent and opportunity. Sadly, according to our research, most people have no idea what it actually costs to attend a community college or a 4-year instate public university. In fact, uh again, with our research, most are overestimating that cost. And at the same time, most Americans, nearly four out of five, believe college is And here's the kicker.
▶ 0:22:14The net price, and this is the price that families actually pay, has been flat or even declining in inflationadjusted dollars for several years. But nobody would believe it because all they see are rising sticker prices, scary headlines, confusing jargon, and enrollment tactics that too often leave them in a fog of confusion. And that confusion has real consequences.
▶ 0:22:39Uh first, cost perceptions and cost realities are the number one reason people don't attend post-secary education or they drop out. And two, price confusion uh and enrollment tactics erode public trust in post-secary ed. Solving this problem will require more than messaging. If all we do is tell families that college is unaffordable, excuse me, that college is affordable, they won't believe us unless we also change the practices and the system that is undermining that trust.
▶ 0:23:09So, what do uh what do families say they actually want? Well, according to our research and across every group that we've interviewed in the last year, this includes high school students, college students, adult learners, and parents, three things rose to the top. They want one clear all-in number as early as possible, no surprise fees. Two, they want guarantees within reason that their price won't change while they're enrolled.
▶ 0:23:36And three, they want one clear sense of return on their investment. They want to know whether the degree or credential that they're receiving will pay off in the end. And they want minimal amounts of loan debt. Colleges, for their part, they want the same thing, but they feel stuck in models that have been embedded in enrollment management for decades.
▶ 0:23:56Rising sticker prices to signal quality or balance ledgers or fill classrooms um and uh and uh discounts to then recruit students. And some of that may make sense on paper, but it erodess public trust in the system. We can fix this if we prioritize clear numbers early, standardized plain language, all in pricing, and fix incentives focused on simplification at every level of enrollment and financial aid.
▶ 0:24:26Students and families are not asking for miracles. They're asking all of us to work together at the federal, state, and institutional level, focused on honesty, predictability, and clarity, not complexity. Thank you for this opportunity, and I look forward to today's conversation.
▶ 0:24:40Thank you. And now, I'd like to recognize Mr. wishing for your
▶ 0:24:52Uh, Chairman Owens, Ranking Member Adams, and distinguished members of the committee. Thank you for the opportunity to testify about unfunded discounting, a misleading tuition pricing practice widely used by colleges and universities. My name is Lee Wishing and I am vice president for student recruitment at Grove City College in Western Pennsylvania. Most universities without large endowments set their tuition sticker prices well above their actual costs, their break even costs.
▶ 0:25:21This is done for three main reasons. First, a high sticker price can create an inflated perception of value. Second, it allows the school to offer large, impressive, impressive looking scholarships to every student, making them feel valued and desired. Finally, and most importantly, this scheme dupes some students into unwittingly funding their classmate scholarships. Let's use a simple example.
▶ 0:25:50A university sets its sticker price at $65,000, but its actual break even cost to educate a student is only $35,000. therefore can give every student a $30,000 scholarship without losing any money. But what happens to the student who receives just a $20,000 scholarship? They'll pay $45,000, which is $10,000 more than the school's break even cost.
▶ 0:26:17This extra $10,000 can then be used to give a more desired student, perhaps one with a high SAT score or a special talent, a larger scholarship, say $40,000. Essentially, students who receive smaller scholarships are unknowingly subsidizing those who get larger ones in such a scheme. This practice puts students and families at a risk of overpayment and excessive debt.
▶ 0:26:42They may take on loans to pay for a portion of their classmates education and could be burdened with that debt for years after graduation. Furthermore, many schools have a minimum GPA requirement to maintain these scholarships. If a student loses their scholarship, they may be faced to pay the full inflated sticker price or drop out of college altogether, sometimes with a large debt burden.
▶ 0:27:07My college, Grove City College, competes in the higher education marketplace without practicing unfunded discounting. We charge our break even price of $35,290. Our scholarships are fully funded by our endowment, alumni, and friends. No student pays for another.
▶ 0:27:28We see firsthand how this practice is a sophisticated marketing scheme with an entire industry built around it, including third-party vendors who develop data models to determine scholarship awards. In summary, unfunded discounting is a marketing scheme that inflates tuition prices, distorts perception of value, and causes some students to unknowingly subsidize other students, often at great personal expense and debt that will take years
▶ 0:27:58to pe pay off. Thank you for your time and consideration of this important matter.
▶ 0:28:04Thank you. Uh, I'd like to now recognize Miss Leuning. Please, please.
▶ 0:28:11A lighter.
▶ 0:28:12Lighter. Okay. Thank you.
▶ 0:28:16Okay. Thank you.
▶ 0:28:18Yes. Thank you.
▶ 0:28:19Good morning, Chairman Owens, Ranking Member Adams, and distinguished members of the committee. My name is Amy Lighten, and I'm the director of the higher education program, which is uh at New America, which is a nonpartisan think tank. Bring my mic here. All right. How's this? Wonderful. Thank you for inviting me today to discuss what's at stake in ensuring that millions of students and their families have the information and support they need when making one of the most consequential, expensive, and as Mr.
▶ 0:28:48Owens said, confusing decisions of their lives, whether and where to go to college. And the first thing that families need to make that decision is pretty simple. Clear, comparable, honest information about what college will really cost. But right now, too many colleges are hiding the ball. Our research found that a third of financial aid offers, which are supposed to show students what college will cost and how to pay for it, didn't include cost information.
▶ 0:29:19And colleges used 136 different terms for the exact same federal loan. And 24 of them didn't even use the word loan. When buying a car or a home, consumers get standardized disclosures. Students and families deserve the same for college, which is why Congress should support and pass the bipartisan biccameal understanding the true cost of college act. But price transparency alone isn't enough.
▶ 0:29:48Even when colleges when students know the college's price, too many still can't afford it. Rising costs have pushed too many to take on unmanageable debt, leave college, or never go in the first place. Pell grants now cover only about a quarter of the cost of the full cost of attending a public university, which is the lowest share in decades. And some colleges are making it worse.
▶ 0:30:11As we heard before, more and more they're using their institutional aid not to support lowincome students, but to attract wealthier, highscoring students who will boost their rankings and their revenue. Our research found that between 2001 and 2017, selected public four-year universities spent $ 32 billion on students with no financial need.
▶ 0:30:38$ 32 billion that could have gone to help low and moderate income students. That's unconscionable and college colleges need to stop doing that. This behavior undermines the Pell Grant program and leaves the students who Congress has prioritized with bigger affordability gaps and more debt.
▶ 0:30:58In addition to stopping that behavior, we need more investments to restore the PEL grants purchasing power, reforms to ensure that states and institutional aid goes to students who need it the most, and a meaningful federal state partnership to stabilize costs and keep them low. But even when students can pay for college, affordability isn't enough because it doesn't mean much if programs leave them drowning in debt or stuck in low-wage jobs.
▶ 0:31:25And that's why passing the bipartisan college transparency act and maintaining the Department of Education's Financial Value Transparency Rule is critical so that students can see which programs pay off and which don't before they enroll. Transparency is essential, but it's not a substitute for protection.
▶ 0:31:45Students and taxpayers need meaningful accountability, and Congress took a major step forward during reconciliation, including a do no harm standard to ensure that colleges don't leave students worse off than if they hadn't enrolled at all. But Congress needs to go further. It needs to include the risky undergraduate certificate programs and protect students from programs with unaffordable debt.
▶ 0:32:09and it needs to support the department as it implements and and enforces both these new protections and existing protections like the gainful employment rule. But laws don't protect students on their own. They require people and resources. And right now, the department needs The federal government spends over $130 billion a year in student aid.
▶ 0:32:33Students and taxpayers deserve a system that makes college costs clear, keeps education affordable, and holds institutions accountable for value. Thank you for including me in this really important conversation, and I look forward to your questions.
▶ 0:32:46Thank you so much. Appreciate that. Uh my last witness, uh Dr. Gileiam,
▶ 0:32:52Chairman Owens, Ranking Member Adams, and esteemed members of the committee. Thank you for giving me the opportunity to testify on these important matters. My name is Andrew Goen. I'm a research fellow at the KO Institute and I've been studying higher education for longer than I'd care to confess to. Uh so today's topic on on tra transparency and higher education is an excellent one. Uh and higher education tends to have both high and uncertain pricing which is a particularly brutal combination for students and parents.
▶ 0:33:22One promising policy that could help address these problems is price transparency. There's been momentum around three different price transparency initiatives in higher education. The first, which Amy alluded to, was eliminating confusing financial aid terminology. So, making sure we're using the same words to describe Pellgrant student loans. This is very low hanging fruit. We should definitely do it. Uh number two, net price transparency, which which this body has already done some work on uh in and mandating net price calculators. I think more work still remains to be done.
▶ 0:33:52Uh but the third is is really a state level initiative at this point and these are are what we refer to as price guarantees that lock in a maximum price for predetermined number of years typically the length of the program. So two years for an associate degree, four years for a bachelor's degree. Uh states like Ohio and North Corolina are already implementing some of these uh in terms of the the overall pros and cons of of price transparency. My written testimony has a has a complete list, but I want to highlight a couple of the big ones.
▶ 0:34:21uh in in my limited time here uh as an economist, I'm I'm going to focus a bit on the economic uh uh ration for for price transparency, which include increases in market efficiency, more informed decision-making on the part of of students and parents, reduced transactions costs, and a better competitive pressure on institutions. not only because the the students and parents are more informed but also because we we would anticipate seeing less things like price discrimination and scholarship displacement with with more transparent pricing.
▶ 0:34:52Uh but I am trained in economist so I I do tend to to emphasize the the economic reasons but I actually think the the strongest argument for price transparency is is the moral one which is eliminating surprise bills. Uh it it really shocks the conscious when when this happens in the healthcare setting. uh and we need to make sure it's not happening in the higher education setting as well. Uh so so what can we learn about trans transparency from other industries?
▶ 0:35:18Uh my written testimony has has some good uh information on both healthcare and the cement industry. Um oddly enough and uh and so I'd encourage you to to take a look at that if you're interested. In terms of the overall recommendations, uh my main conclusion is is that the benefits of transparency almost certainly outweigh the the costs of of implementing it and we we should pass new legislation to do that.
▶ 0:35:44That legislation should standardize financial aid terminology, supplement the existing net price calculators with a universal one that facilitates comparisons across colleges, require a price guarantee for the typical length of the program, uh make compliance with us with these price transparencies. the condition of title 4 participation and then forbid things like price controls that could uh muddy the waters.
▶ 0:36:07Uh I would also advocate maybe considering making this a a uh uh an add-on for states that don't already implement their own. So a state like Ohio or North Carolina that's already doing this uh perhaps allow them to continue doing their version but do require standardized terminology and formats so that's machine readable and comparable. Uh thank you for giving me the opportunity to testify and I look forward to answering any questions you
▶ 0:36:32Thank you so much. Under rule uh committee rule nine will now begin questioning under the fiveminute rule. I will recognize myself for the first five minutes. Um Mr. Wishing uh first of all uh very enlightening open statement. Um and I just wanted to your testimony you describe tuition discounting as quote best kept open secret. Is there anything you can add to what you've already kind of exposed or talked about so far? Again, for many of us, this this might be the first time we're hearing these these type of terms.
▶ 0:37:01So, anything you want to add to your your opening
▶ 0:37:06Sure. The uh the best kept open secret. Uh it it really is if from my my perspective the seat that I sit in at a at a place that doesn't practice this. Um it's just remarkable to see how the whole industry knows this is happening.
▶ 0:37:24Um everybody knows it. Um marketing firms that that create the data models. Uh I've been in conversations with college presidents um um colleagues who've gone off to to other institutions. In in summary, sir, um everybody knows everybody know this the associations that colleges belong to.
▶ 0:37:47Everybody knows but the students and the parents and we have a a heck of a time cutting through that morass of misinformation to help students understand what's going on.
▶ 0:37:58Thank you. Thank you so much. Uh and Mr. Mr. Trager, in your testimony, you indicated that impact in current college pricing system is not shared equally among students. Um which students and families are hurt the most uh when colleges are not transparent and how does this the lack of transparent transar transparency impact enrollment uh persistence and completion?
▶ 0:38:19Uh three groups stand out uh when we looked at the numbers of students that uh that suffer the most when they don't have a clear idea of what college is going to cost. First are low-income and first generation students. They're the least likely to have fam family experience that helps them navigate a really complex system. The second are adult learners. They're debt averse. They want to understand the ROI the most. And when they can't decipher what the degree or credential will help them and how it will pay off in the end, they're reluctant to enroll.
▶ 0:38:48And third are middle-income families who earn too much to qualify for the maximum need-based aid, but they don't make enough money to pay the sticker price. and when they confuse sticker and net, they don't have clarity and and will delay or potentially not enroll. Um, in terms of persistence, the numbers we have almost show that nine out of 10 students who don't persist or who drop out of of higher education site perceptions of cost or real cost as the reason why.
▶ 0:39:16If you look at all of the other reasons that they come up with, they nearly nearly every other reason is indirectly related to perceptions of cost or cost. So I would say the bottom line is when students don't understand the price the most vulnerable ones are the the ones who pay the highest cost not just in dollars but in in lost
▶ 0:39:36Thank you. Um first of all this is extremely important conversation and uh for many of us to understand some of what's happening behind the the curtains is is very very enlightening to say the least. So I'd like to now recognize my colleague from Cal California Mr.
▶ 0:39:52Thank you Mr. Chairman. Mr. Mr. Leighton, you state in your testimony that transparency is the minimum protection that families need before committing to one of the most expensive decisions of a lifetime. And I couldn't agree more uh with that assertion.
▶ 0:40:11Um Miss Leighton, you um you also describe how the current gainful employment and the financial value transparency rules. Well, can you describe how the current gainful employment and financial value transparency rules protect students?
▶ 0:40:30Absolutely. Thanks for the question. And just to underscore, transparency is not a substitute for protection. And I will say both of these rules, the gainful employment rule and the financial value uh transparency rule go as far as the department of education can go without congressional action. And I really applaud the department for for going as far as it has gone.
▶ 0:40:54And HR1 did do an accountability measure, but it really lack lacked some some holes that the gainful employment rule keeps in place. So one of them is uh what I mentioned earlier, which is this these really risky certificates that uh where we see a lot of concentrated terrible outcomes for students and then we see a lot of programs where you have uh students are drowning in debt that they can't pay back.
▶ 0:41:18HR1 took a good step and it it has a mandatory earnings provision, but it doesn't include that debt piece and it has this whole entire loophole for these certificates. But gainful employment is the backs stop to that because it will protect students against those programs. But the problem is it's a rule and we all know regulations come and regulations go. And I think it would be better if this were codified in law, but until and unless it is, it needs to stay.
▶ 0:41:48And I think that Congress needs to use its congressional oversight authority to make sure that that uh the rule is enforced that the rule is being implemented and that the data that are coming out of the rule are shared with the public. And the same thing is happening with the financial value transparency rule which is we're talking about transparency, transparency of price. We need transparency of price uh for particular programs. We need transparency of outcomes. And the this is called FVT, financial value transparency.
▶ 0:42:17It is the I think it's the most um impressive uh step the department of education the federal government has taken so far in terms of transparency. Uh, and I would also encourage the department, not the department, I would encourage Congress to encourage the department to both implement the financial value transparency rule and make sure that those data come out because right now, sorry to get a little bit wonky, the department has just finished two rounds of collecting the data so we could publish those now and have
▶ 0:42:47information that students uh could use today or as soon as they publish it to make these decisions. And I will say that um the gainful employment uh rule is on the docket right now. It the department of education is reconsidering it during negoti an upcoming negotiated rulemaking session and colleges are already lining up and writing in their comments saying oo let's let's weaken that rule. Let's get rid of that rule.
▶ 0:43:14And what that's going to mean is it's not just going to hurt the students who are in those programs today, the certificate programs or the unmanageable debt the the certificate programs that I talked about. It means there's going to be an incentive for colleges to create more and more and more of those programs because they are not subject to that accountability and that's really dangerous for students.
▶ 0:43:36To summarize, uh transparency is important. It's it's a minimum basis. We I think we as Republicans and Democrats can agree on that point. But I think uh we don't necessarily see eye to eye on the the gain from the the equal or if not more importance placed on gainful employment and the financial value transparency rules. So I think we I would hope that the two sides can come together and see how all these can work together to protect both the taxpayer and the student.
▶ 0:44:06Now I agree with my colleagues that transparency and college pricing is a serious issue but there are a number of factors that make the cost of college rise. Republican reconciliation package massively cut foundational federal health care and nutrition programs and have strapped states for resources as they scrambled to cover those courts that those costs. They've pushed these costs onto the states. How will the reduction in Medicaid and SNAP impact the cost of public education and the funding for state financial aid?
▶ 0:44:36It's going to be huge. I mean, the first thing that states do when they're facing budget cuts is they cut higher education. and they cut higher education because they can raise money for it. But the raising money for it is raising tuition which means it's being the budgets are being balanced on the backs of students often in the forms of debt. These are going to be massive holes in state budgets with the cuts to Medicaid and SNAP and it's going to have a really big impact on student affordability.
▶ 0:45:01Thank you so much for that. Thank you.
▶ 0:45:03Are you back?
▶ 0:45:04Thank you. I'd like now to recognize the chairman of full committee, Chairman
▶ 0:45:09Thank you, Mr. chairman, thanks to the panel for being here and uh I'm delighted in my conversations with the Secretary of Education that some of this is actually going to be happening u including in FAFSA which will be rolling out on time. Um so thank you for for being here. Um Mr.
▶ 0:45:30wishing um your school like Hillsdale College in my district has made a concerted effort and decision to um underwrite its own college costs and not take federal funding. And so it's interesting to have you here speaking about this issue and talking about the transparency that you show uh to to your incoming students.
▶ 0:45:58In your testimony, you mentioned that, and I quote, and it's a shocking quote, the very first transaction a student has with most Christian colleges is based on deception. End quote. Could you elaborate on this point, uh, including whether this deception is exclusive to private faith-based institutions or applicable more broadly to public and other types of
▶ 0:46:24Uh, thank you for the question, sir. Um, in some ways I I feel like apologizing for using the word a deception because it it is a very strong word. Um, but
▶ 0:46:37we like transparency.
▶ 0:46:39Yeah, I I can't think of a better word. Um, it it is deceptive. um students they it's it's deceptive in that like so Grove City, Hillsdale, we we compete for for pretty high achieving students. Um and they the the these students are the big winners in this game at the expense of maybe the the lower achieving students.
▶ 0:47:09um they um the the high achieving students think that they're getting a a huge wonderful scholarship. What I've seen a $30,000 scholarship an institution will have maybe 10% money in that. So it's greatly over the actual value is greatly overstated. So it's creating this perception grandiose perception that the student is greatly desired.
▶ 0:47:35Um the students that uh score lower or achieve at a lower rate, they too get a scholarship. Um it's like everybody gets a trophy. Some students get a big trophy and the students that get a smaller trophy, they end up paying for the bigger trophies. Um uh it's it's staggering. Uh everybody does it. I shouldn't say everybody does it, not everybody, but it's widely practiced.
▶ 0:48:00But it is across the board.
▶ 0:48:01Excuse me.
▶ 0:48:02It is across the board. I see it. every day of my working life.
▶ 0:48:08Thank you. Um Dr. Gillan, an eyeopening expose by the Wall Street Journal in 2023 found that the public flagship universities have, and I quote, been on an unfettered spending spree and have passed the bill along to students unquote.
▶ 0:48:29Oftentimes, public institutions are one of the loudest voices against post-secary education reform, arguing that state funding fluctuations make transparency with students impossible while ignoring their institutional spending habits. Do you agree with the premise that state funding has declined?
▶ 0:48:47And does the fact that an institution receives state funding mean that it can't be honest with students and Uh so I I do disagree with the premise that that state funding is has been on a long downward trajectory. This is often called state disinvestment. A couple months ago, we actually put out a report that documented the last four and a half decades of of state funding for higher education. And when you look at the trend line, it's actually up.
▶ 0:49:12So states have been increasing funding over time by about $56 per student per year. Um now during recessions that that there is a downward trend but then it it quickly quickly uh uh increases later. Uh so I I actually counted up last night uh we've now had 12 years of higher state funding than the year before uh in a row uh for for 12 years now.
▶ 0:49:38Um and that that kind of realization has not not soaked through to the the conventional wisdom
▶ 0:49:46Thank you. Um, quickly my final seconds here. Um, Mr. Drager, you indicate the schools set high sticker prices to signal high quality and prestige. In Strata's research, how do students and families react when they learn these scholarships are nothing more than a marketing ploy?
▶ 0:50:04Um, initially they react with delight that they're receiving a scholarship. Ultimately down the line it works against the school's interest. I might just frame this slightly differently. I don't think schools are engaging in deceptive practices. I think they're engaging in practices that ultimately students and families come to see as deceptive. And I think there is an important distinction. Ultimately, I think there are many schools that would like off-ramps to these practices. Collectively, I think we can get there.
▶ 0:50:33Thank you. I yield my time.
▶ 0:50:36Thank you. I'd like now to recognize my colleague from New Jersey, Mr. Nov. Thank you, chairman, uh, very much uh, for yielding and especially for holding this hearing and to chairman Wahlberg. This is an incredibly important question to virtually every family in the United States. The first question is, what do you want to do when you grow up? Which turns into whether it's 9th, 10th, 11th grade, are you going to college?
▶ 0:51:07with the assumption is that's the first and best and only answer in so many ways. Do you want to go to college? Well, the fact of the matter is, you know, for every parent having that discussion with their child is do you want to go to college? Do you want to serve your nation and go into the military or do you want to go to a trade school? Because at the end of the day, whether it's college, military, it's what is your career? What is going to be your job?
▶ 0:51:35Uh, student loans, I say it all the time, is one of the greatest things we ever have done and one of the worst things we've ever done because for parents who care so much about their children, they want to do what's right by them to pay $80,000 to go to college for one First of all, let's back up.
▶ 0:52:03We talk about like every child knows I want to go to college and this is what I want to do. I would love to see the statistics of asking that child what job or career that they're going for and where do they end up if we hit 5050. I would be surprised and this is the reason I'm bringing this up is having that discussion with the parents and the child of what the true costs are is incredibly important.
▶ 0:52:33Nobody has mentioned community college. Is this what I want to do? Because that is the most affordable accessible for any child and then move into a fouryear and go on. But the idea that so often they want to chase that uh picture that they see it's a great sports team and listen we just came off a great weekend of watching sports for college football and how many children pick those schools simply because of the academic program or the sports programs.
▶ 0:53:02So true cost is such relevant issue. Earlier in your testimony, you talked about the net When you just talked about the funding for higher education, you said it went up. Of course, it does. Everybody raises it. But what is the true cost against inflation? That would absolutely change it. So, a having the right information, calling it the right thing, that terminology is so important. We can do this.
▶ 0:53:31And I am very much uh focused on that. uh the terminology and the basic costs for a college you talked about repeatedly there are you can buy the Chevy or you could buy the Cadillac and we need to address those issues to go through the school and the idea of saying there should be a cost guarantee if it's two-year college your cost there so we we're having a great discussion
▶ 0:54:01uh for something that ends up being the biggest decision in many people's life other than getting married and having children. This is so important that we consider what takes place at the time of these decisions because it impacts the parents who might have to help the child and it certainly is going to impact that child making that decision.
▶ 0:54:24So uh, Miss Leaden, talk to me about when this child and this parent are making a decision, what goes into making that decision that impacts are they actually looking like, gee, to go there, it's going to cost me a half a million dollars to send you there for something that you may or may not do.
▶ 0:54:51When we talking about transparency and the terminology also the decision making what goes into that and the studies that you've been part of. How do the parents and child actually make that decision?
▶ 0:55:07Ideally they should be making that decision with really good information and really good complete and honest data. And right now they're not. And just to be a little bit crude about it, it's garbage in, garbage out in terms of if you have really misleading information that is on these financial aid offers.
▶ 0:55:26Uh in our research, we have found uh in addition to some of the issues that I mentioned at the top, there are colleges that will list loans like parent plus loans and put them as if they are gifts, as if they are awards that they do not have to pay back.
▶ 0:55:41One of my favorite and horrible examples is there's a a college um there was a letter that at the very bottom of it it had all of the the grants and loans and things and at the very bottom of it it said your out-ofpocket cost is zero which is amazing. That's great. I don't have to pay anything to go to college. But in that letter parent plus loans of $27,000 were listed. Student loans were listed. But they were like P+. Who knows what P plus is?
▶ 0:56:10Do you know what P you know what P+ is? Everybody in this committee knows what P+ is, but most people don't know what that is. And that's because the the information is I I I will disagree with my colleague Justin here a little bit about whether or not it's intentionally deceptive. I think for some colleges it's not and I think for some colleges it is because it's this tool is both helping students uh try to understand the cost of college but it's a marketing tool for schools to recruit students.
▶ 0:56:38I yield back. Thank you, chairman.
▶ 0:56:40Thank you. Thank you so much. Now, I'd like to recognize my colleague from North Carolina, uh, Mr. Harris.
▶ 0:56:45Thank you, Mr. Chairman, and, uh, thank you to all on the panel. This is a extremely eyeopening hearing, and I'm I'm very grateful for all of your expertise and what you're sharing. Um, Mr. Wishing, I'm I'm concerned that federal policies over the past several decades have really helped to drive up college cost.
▶ 0:57:06And I think um you can tell by the questioning that in your testimony uh many were captivated as you discussed the concept of unfunded discounting uh where college offers scholarships to a student based on an artificially high fake price and the scholarship makes it seem like the student's getting a huge discount but really it's a discount off a number much higher than it needed to be.
▶ 0:57:32So, how does the federal loan system perpetuate the idea of unfunded discounting?
▶ 0:57:41Well, I may not be the best person to answer that because we don't uh take federal loans, but from my competitive perspective, what I see is um uh you know, money is fungeable. So, if you think about a a school that may get let's say let's even say PEL grants or Um if a school if a sto a school gets $5 million a year worth of PEL grants um that's worth $und00 million in an endowment
▶ 0:58:12coming out of Washington DC. So that's like we have to compete against that. Um so Grove City would have to have a hund00 million of its endowment just to compete with the Pell Grant uh stream. So anyway, it puts a lot of money into the system that can kind of slosh around, be used to award for this, award for that, but it kind of it it gives a a base of funding to schools.
▶ 0:58:35If that were taken away, boom, that you know, I think you'd you'd see a lot more pencil sharpening at schools. I think they'd offer a better value. Mhm.
▶ 0:58:45Um I I hope that's a good answer, but we again we don't we don't participate in any of that. So I may not be the best person to answer.
▶ 0:58:54Well, but I think you you offer a great perspective uh from the outside looking in at how that system could perpetuate the the whole idea. In fact, I I'll follow up that with a question as well for you. What type of student benefits from the unfunded discounting system and what type of student is taken advantage of in that? Well, as I said earlier, I think I think the student that benefits is the high achieving student.
▶ 0:59:21Um, that student unwittingly is uh in in the unfunded discounting scheme is getting a scholarship being funded most likely by a classmate, maybe his or her roommate. And uh the the loser in this is the roommate that may be a B student and and she doesn't know that she's paying for her maybe $10,000 a year $15,000 a year for her roommate scholarship.
▶ 0:59:48She may be borrowing that money, racking up 40 40 50 or more in debt and graduating with that and then having to spend the next 10 15 20 years paying off her roommate scholarship that she unwittingly paid for. And and sadly, you know, the big winners in all of this uh not not just the the high achieving student, but the
▶ 1:00:13Students are are funding institutional scholarship programs. They're the big
▶ 1:00:19Well, in the working families tax cut bill that was just signed into law by President Trump, uh Republicans set limits on the amount that students can borrow. How would you think loan limits play a role in reducing college costs?
▶ 1:00:35Well, I I I do think I do think that would help. Um I think it would the way that it would help it would uh force force the consumer to to think more about the value of what the parents are paying for, the students are paying for. I think it would it would force u uh more thinking about the value of what they're doing.
▶ 1:01:01Okay. Uh I will ask you something else in your testimony, Mr. Bushing. Uh you noted that challenging the industry is difficult when it comes to reforms that would benefit students and families. And you also indicate that the interest groups representing colleges and universities play a significant role in perpetuating the current dysfunctional pricing system.
▶ 1:01:23I I'd really love for you just to take a moment in the last 20 seconds to discuss these challenges, including the opposition you face from the industry when pushing reforms that would improve transparency in college
▶ 1:01:36I I do think uh associations could help uh some of the associations that uh schools belong to require a a transparency or an ethical a sign off on an ethical statement to be transparent with students about such things. Um, I've challenged uh one organization about that. Um, the the um I encouraged them, well, I won't go too deep into that, but it was a pretty lengthy back and forth process.
▶ 1:02:04And in the end, um the the board of that organization said they um they really couldn't change because it would be detrimental to their um their recruitment philosophies and detrimental to their enrollment efforts of their of their members.
▶ 1:02:18Thank you, sir. Mr. Chairman, I yield
▶ 1:02:20Thank you so much. appreciate that. I'd now like to recognize ranking member um from North Carolina, Miss Adams.
▶ 1:02:28Thank you, Mr. Chairman, and thank again the witnesses for being here. Uh when students uh sign up for college, they shouldn't be left guessing, guessing how much aid they'll get, guessing whether tuition will jump from one year to the next, guessing if they'll be able to stay enrolled at all. Uh but the biggest challenge I think for students uh is is covering the gap be between um the the the money the aid that they receive uh from the institutions and what they're able to pay.
▶ 1:02:57I spent 40 years teaching as a college professor and so I I do understand some of this. Uh but I know that that kind of uncertainty pushes students to the breaking point. Some take on loans that they can't repay. others drop out not because not because they couldn't do the work, but because they couldn't make the math work. Now, let's put the numbers in perspective. The maximum PEL grant today is $7,395.
▶ 1:03:24And and in most states, including North Carolina, where tuition and fees at a community college average just about uh that's more than enough to to cover tuition. But what that tells us is simple. Community colleges are doing a lot with very little. They're providing a a rigorous postsecary education at a fraction of the cost of four-year institutions, but they need more federal support uh to keep doing more while while staying affordable.
▶ 1:03:53And yet, despite these low tuition costs, about 12% of community college students nationwide are still taking out student loans. And that tells us affordability isn't just about tuition. It's about housing. It's about food and transportation. It's about child care and the full cost of attend attendance. So, while today's hearing is about transparency, we can't stop there. Students don't just need price tags. They need predictability.
▶ 1:04:21They need affordability and they need Congress to stand up for them and not pull the rug out with with cuts to PEL and federal aid. And let me just turn to our witness, Miss um Le Tenan. Um, many students are concerned that during their time in college, their aid and therefore their cost of attendance can change dramatically. You've written about price guarantees versus affordability guarantees.
▶ 1:04:46So, could you answer what is a price guarantee and why is it different from an affordability guarantee and what considerations should Congress keep in mind if we explore an affordability guarantee?
▶ 1:05:01Thank you so much for the question. Um, so I think price guarantees are trying to get at this this question that you talked about, which is predictability. High red is a super weird product and that you buy it multiple times. It's not like you just buy it once and you're paying, you know, you sort of put it on layaway and you're paying the same price over time. It the costs can dramatically change from year to year. And we need to stop that. We need to make sure that those prices are predictable. And I think that's what the price guarantee is trying to do. And so I understand that.
▶ 1:05:31I think it's absolutely worth exploring. I think there is some caution in what we have seen in certain states so far which is um in some cases uh states have frozen the tuition for a certain group of students only to really raise tuition for the other students or including outofstate students and it's not just raising tuition for them it's recruiting more of them so the schools can get more money. So we have to make sure as we're designing a program like that that we're not shifting costs onto students.
▶ 1:05:57But either way, that's not an affordability guarantee and students need to make sure that they can afford to go to college.
▶ 1:06:04Thank you. In July, Congress passed HR1, which which cut federal student aid and safety net programs. And students tell me that they need more aid, not less. And while transparency is important, what good is transparency if we're just telling students they can't afford their dream. So, uh, Miss, uh, Latina, as these student aid cuts, uh, take effect in 2026, what should students and families be aware of when making decisions about how to pay for college, from tuition to indirect costs?
▶ 1:06:35And what should we know about how HR1 will affect colleg's abilities to to address rising I mean, I think they need to know that it's probably going to be more expensive for some students and that it's going to be harder for low-income students to achieve some of the things that they've been wanting to achieve. And I think we're going to see in certain places like for um medical education, for example, I think it's going to be harder for students who don't come from wealthy families to be able to afford to go to medical school and become doctors.
▶ 1:07:05Thank you. Let me let me move on quickly. So given the tuition at at community colleges is often below the maximum pel but students are still borrowing at significant rates. So how should Congress better support community colleges so that they can continue offering offering affordable highquality education while addressing the full cost of attendance? I've got about three
▶ 1:07:28All right. Thank you. I'm investing as a grandmother with two with two granddaughters in college right now. Thank you very much, Mr. Chair. I yel
▶ 1:07:34Now that was an impressive answer. Thank you so much. I'd like to recognize um my my colleague from from Florida, Mr. Fine.
▶ 1:07:42Thank you, Mr. Chairman. Um I approached this hearing today with a heavy heart. I chaired higher education in Florida for two years when I was in the legislature and and frankly given what we've seen over the last week, I believe that higher education is is fundamentally broken.
▶ 1:07:58You know, when I when I hear professors making the kinds of comments that have been made from departments that I don't even know why they exist, like queer studies, um I wonder, frankly, if we shouldn't be having this debate at all, because the federal government should be exiting the higher education system and say, "You guys are on your own. Good luck. Make it work, but it's time for the taxpayer to exit the system altogether." And that's something that I will be thinking about myself um in the coming days.
▶ 1:08:24I don't know that the system is too irreparably broken for us to fix it. But you know, before I was in politics, I actually worked in the hospitality business and helped pioneer the idea of yield management, which is getting different people to pay different amounts for the same product. Particularly think of hotel rates. How do you manage hotel prices and airline prices? Not necessarily to discriminate against two identical customers, but based on different times and different demand cycles in the purchasing process.
▶ 1:08:51And it's horrifying to me, frankly, to hear that what we're what hotels use to decide what they're going to price your vacation at or your airplane ticket at is being used to decide whether kids can go to college or not. That is incredibly disturbing. So, my question is for Mr. Wishing. Um, in your testimony, you describe the enrollment management industry, which involves schools hiring consultants, frankly, like what I used to do. I had no idea universities did this.
▶ 1:09:18um who use sophisticated data modeling to pinpoint the exact price that an institution needs to charge to an individual student. How prevalent are these consultants in in higher education? How much money are these people getting paid to do this? And how do they influence the prices that are charged to students and their families?
▶ 1:09:40Well, they're out there. Um they're are bigname companies in and in the higher ed space.
▶ 1:09:46Is that all they do? like this is their
▶ 1:09:49Well, yield management for
▶ 1:09:50well there they can be a big a big component of the business. The ones that I'm aware of uh it's a big component of their business. Uh I've been to a I was at um at a summit so to speak here in DC and and saw one of these companies um demonstrate the model.
▶ 1:10:11The ethical implications of these things to see them demonstrated are And and to be in a room um when this happens and and other members of the industry there like on my side of the table and see it happen unaffected by what we would just saw is is staggering.
▶ 1:10:35And um I I I think the reason that people are unaffected by this is that it's just the air that higher ed breathes. Of course, everybody does this like on your in in the in the um private world. Um everybody does it in the hotel world. Um I think the a big problem frankly is the nonprofit status.
▶ 1:11:01And everybody might be horrified that I'm saying this, but um the nonprofit status that higher institutions of education have because we're supposed to serve the public good and and families and students assume that's what we're doing. But behind the curtain there are people pulling all kind of levers that that don't work for the public good.
▶ 1:11:25No, thank I appreciate that. Look, one of the biggest public policy problems we have today is the whole idea of nonprofit. It's a branding issue. People hear something as nonprofit, they assume like struggling people that are, you know, starving to death that are working for the nobility of the enterprise because it's a nonprofit enterprise. All a nonprofit institution means is that there are no profits distributed to shareholders. They get distributed in the form of salaries. And look at what some of these people actually actually get paid.
▶ 1:11:52Do any of you have any examples of these firms and what they charge um like specific just for the benefit of the committee? You know, I don't you need to name names, but you know, you're aware of a university charging group X. I I'll let anybody answer. I'm just I'm sort of horrified that this business even exists.
▶ 1:12:09Oddly enough, a couple years ago, I was on a plane with a university president and she was talking about their enrollment management company and they were talking about saving $300,000. Not. So that wasn't like the total cost. That was just the
▶ 1:12:24They cut off their contract.
▶ 1:12:25Yeah. So So if they switched to a different group, they would paying $300,000. They're paying much higher
▶ 1:12:31I got 10 seconds left. Imagine how competitive some of our college institutions are right now. Imagine if they get into the world where they're basically auctioning off slots to those who can pay the highest price. That is where this ends up. And that's not a good thing for anybody. And with that, I yield back.
▶ 1:12:48Thank you. I'd like to now recognize my colleague from Oregon, Mr. Baroni.
▶ 1:12:54Uh, thank you, Mr. Chairman and my member, and thank you to the witnesses. This is a an important conversation and something I've cared about since I joined this committee years ago. Uh, in large part because of my personal experience uh that informed my understanding that not everybody's on the same path. I didn't go to college after high school. I was working. That's what worked for me at the time. So, years later, I started first community college, then college, then law school. And I did that all on my own with a combination of grants, loans, work study.
▶ 1:13:21Higher education was a lot less expensive at the time, but if had I not had that support, I didn't know what a I didn't have a dorm or a meal plan. Uh housing costs, all those all factored into the decision. And then also as a parent of two children who are highly educated, I went through the process um as a as a parent and and saw the the frenzy of the college admissions uh cycle and how that uh became commercialized and how the the very misleading rankings
▶ 1:13:52uh oftentimes put into students minds that they have to go to one of these bigname colleges to be successful. not understanding that there are plenty of other colleges that either might be less affordable and then also not getting accurate information about some of the schools and their uh their their needlind admissions policy. So, there's a lot of misinformation out there that I think distorts uh the the college admissions process in general. Uh but it has been a priority of mine to open the doors of opportunity for anyone who chooses college.
▶ 1:14:22So, so I want to start with you, Miss Leighton. And in your testimony, you talked about the urgency of a federal data system. So we have those more complete that complete information about outcomes across colleges. I want to insert that I have said for years on this committee and and in education discussions that uh I I think it's wrong to to gauge students and graduates based on their income.
▶ 1:14:47If someone graduates and goes into public service or starts a nonprofit or is an entrepreneur, they might not have a high salary. That doesn't mean they didn't get a good education. But tell me a little bit about what the bipartisan college transparency act would do. Um why is it important legislation for students and prospective students?
▶ 1:15:05Well, thank you for the question. Thank you for being a sponsor of that legislation and we got it through the House in 2022 and I hope we can we can get the ball over the finish line.
▶ 1:15:15Very bipartisan. uh soon because right now there's a lot of questions about is college worth it, right? I mean, that's a lot of what we're talking about. Uh there is both like can you can you pay for it? Can you afford it? And then what are you going to get out of it? And right now students and families are making a lot of these decisions without being able to answer that question. And we know that on average college is absolutely worth it. But students go don't go to average colleges.
▶ 1:15:41They go to particular colleges and particular programs and they pay particular prices, but right now they're really in the dark when they're trying to figure out how's a student like me going to succeed or not succeed in a place like in a school like this or a program like this.
▶ 1:15:55And the College Transparency Act would really fill in some important gaps in our uh information system so that we can tell students not just those who get federal financial aid, but those who get GI Bill benefits, those who get tax credits, those who want to see themselves in the transparency tools that the Department of Education uses, including the college scorecard, which I don't remember if we've talked about it, but it's certainly in the written.
▶ 1:16:17It's pretty important to have that standardized information, but also um Miss Leighton, the National Center for Education Statistics, NCES, they play a pretty essential role in getting data about college outcomes collected, analyzed, disseminated. So, what's at stake uh with that data if the Trump administration continues to defund NCES and other education research like the IIEES Institute of Education Sciences?
▶ 1:16:41I mean it there's a really big disconnect between the conversation we're having today about the need for transparency, the need to make sure that things are standardized, the need to have better information that is presented honestly to students and the department of education has been decimated and particularly the institute for educ uh education sciences and national center for education statistics. We're talking about the college scorecard. Who does the college scorecard? people at NCES and they're
▶ 1:17:10Well, and and and you mentioned the the cuts to staff across a department, uh the Office of Federal Student Aid, for example, it's going to significantly disrupt the ability of students to access financial aid and the information they need. And also the what I call it the big ugly bill because I don't think it's beautiful at all. Uh that uh cuts billions of dollars in federal funding for student financial aid. And as we as many of you mentioned, the the transparency uh alone is not enough to solve the problem. Uh Mr. Dr.
▶ 1:17:37Drager, you mentioned first generation students programs like TRIO and Gear Up, which the administration proposed eliminating. It looks like we're going to at least save some of that. Those are really critical critical programs to get information to students. I talked to a high school student who didn't know he could go to college until he until he talked to somebody from TRIO. So, uh even if students have that clear understanding, uh we need to to invest and have those programs like work study, PL grants. Work study is a great program.
▶ 1:18:04uh why aren't we boosting that funding to make uh college the open up those doors of opportunity so everyone who chooses college can get through and complete their degree without a tremendous amount of debt and I'm out of time and I yield back. Thank you, Mr.
▶ 1:18:18Thank you. I'd like to now recognize my colleague from California, Miss Khaled.
▶ 1:18:25Uh thank you, Mr. uh chair. So, uh, I'm looking at a a chart from the Bureau of Labor Statistics that shows that since 2000, uh, the cost of basic, uh, consumer goods, a lot of them anyway, uh, has significantly declined. Uh, the cost of TVs has gone down 97.9%, cost of software is down 72.4%, cost of toys is down, uh, 73.5%. But then you look at the cost of college uh, tuition uh, and it's an entirely different story, up 184 uh,.7%.
▶ 1:18:55And relatedly the cost of college textbooks is up 154.1%. So uh Dr. Gillian Gillan um how do we explain this divergence where we see uh some costs when it comes to consumer goods coming down because of innovation and the like but then uh the cost of college continues to sore.
▶ 1:19:15Yeah, that's a that's a great question and that's been a topic of intense study for a lot of people for a lot of time. Uh the the best explanation I can give you right now is that it's a difference between what we call search goods, experienced goods, and credence goods. And so search goods are things like cereal or clothing. Like you know what you're getting before you before you um uh even make the purchase. Experience good is something like a restaurant meal where you don't know if it's going to be good before you eat it, but after you eat it, you can tell if it was good. A credence good is different.
▶ 1:19:45Like even after you've purchased it, you don't know if it was a good good purchase or not. Uh and so so credence goods tend to have a couple characteristics. Uh one we no no agreed measures of quality like we don't know what distinguishes a good college from a bad college. There's no secondary market. Uh and you don't know the value for it for until long after you've you've made the purchase. Uh so so that's that's a those three characteristics all credence goods have. Uh but then you combine uh a couple other characteristics of higher education.
▶ 1:20:13Most students will typically only be interact with a couple of colleges over their lifetime. So they don't they can't even compare different colleges to different colleges. Uh and then uh the students also participate in the provision of the of the good. So like if you if you if you as a student show up to to campus and you just don't do anything, you're not going to learn anything. Um and and so these these things make higher education even among the most difficult category of goods for for normal economics to to work its magic. Uh make it really difficult.
▶ 1:20:42Um and so so what we end up with is is an unfortunate um what what we call the the Bowen's revenue theory of cost which is basically the the college since you can't observe quality they compete to be the the highest prestige or the highest reputation. Um and so so they're all they're all trying to be the best they can which sounds great. Uh but to do that they need a lot of money. Uh and so they're going to raise as much money as they can. They're going to spend everything they raise.
▶ 1:21:08And when you put all that together, you're going to see ever ever ever upward trend of spending and and higher education. And that is fundamentally what is explaining why that line for higher ed looks so different than the line for something like TVs.
▶ 1:21:20Interesting. So uh how does this compare for public versus private institutions? Obviously even private institutions are reliant a lot on f on on government subsidies, but um like in my state, California, uh since 2000, tuition in the CSU system has gone up 350%. uh tuition in the University of California UC system has gone up 400%. So even worse than the average uh across the country. Uh what explains that extraordinary uh you know rise in college costs in the public sector?
▶ 1:21:48Yeah. So the the Publix are are an interesting case because they are also subject to a lot of political pressure from their state governments. Um and so state governments that are are kind of lenient will let them increase prices a lot more than other states. So, a state like Florida doesn't let their colleges increase prices that much. State like California seems like it's it's letting them do it.
▶ 1:22:08Interesting. And I'd invite you to weigh in on this question as well, uh, Miss Lamitt, and if you'd like either of
▶ 1:22:17the the college costs, the price going
▶ 1:22:19Yeah. And if there's anything we can do specifically when it comes to the the public university system to try to get costs under control there. Well, I think one of the things that we've been talking about is that the line that you're talking about, that isn't actually what the students are going to pay. And so, it's really confusing. So, we see the tuition going up, but as we've talked about today, we have a lot of discounting where you have this high sticker price, but students aren't actually paying that price. And so, we actually re really need much more transparency about what it is that students are actually paying.
▶ 1:22:48not just this maximum sticker price they're putting up there to try to see uh to the gentleman's uh point earlier around sort of predictive pricing. How many students can you sort of squeeze as much money out of to get them as close to the the top as possible and uh and but students are falling down all the way on the continuum and we just need more transparency about what they're actually
▶ 1:23:08Yeah, I think that's a big big part of the solution. Uh thank you Mr. Chair for bringing us together for this hearing. I yield back.
▶ 1:23:14Thank you. I'd like to recognize my colleague from Georgia, uh, Miss McBth.
▶ 1:23:18Thank you, Chairman Owens and Ranking Member Adams. And thank you to our witnesses today. I have read your testimonies. Um, it's abundantly clear that our current higher education system is not working for the American people the way that it should be. That's the reason why we have been having this hearing. It's not working for families who too often end up paying more than they thought they would ever have to pay.
▶ 1:23:41It's not working for the millions of students who are being forced to take out loans at predatory interest rates and have no degree or credentials to show for it at all. It's also not working for our employers who are in desperate need of workers with the specific skills necessary to fill the in demand sectors of our economy. I'm talking to those employers all the time in my district. the status quo.
▶ 1:24:05Well, it works well for some, but it leaves many people who are meant to be supported by education Americans who are trying to get the skills that they need to provide a decent life for themselves and their and for their families. Um, but they simply can't afford it. Instead of opening doors to opportunity for all, we have a system that puts far too many Americans in insurmountable debt at a time when most good paying jobs in this country require a degree or some kind of credential.
▶ 1:24:35The reality for most Americans is that the only way that they can afford that credential or a degree is to rely on student aid or take out a loan. People are told every day that one of the best ways that they can ever get ahead is to get an education, get a good college education.
▶ 1:24:53But instead of being rewarded with a better job and empowered uh with improved quality of life, too many are sentenced to a lifetime of debt for following the path that was laid out for them, obtaining the skills necessary to be gainfully employed and fill the workforce shortages that we see in all of our districts, all of my colleagues. We all agreed that the current system is too expensive and that it isn't getting students where they need to and where they want to go.
▶ 1:25:22But the recent actions that are taken by my Republican colleagues will only make a bad situation worse. Cutting student aid for lowincome students and families without getting at the root cause of the drastic increase in the cost of higher education will only further cement bad parts of a system that we're all here today trying to seek to improve.
▶ 1:25:47Prices continue to rise for students and families and the majority is only adding to that burden by cutting programs that provide some level of protection from those increased prices. From PAL to work study to the federal supplemental emergency opportunity grant, Republicans and President Trump are unfortunately making education more and more expensive for working Americans by weakening and defunding the programs that they rely on to pay for
▶ 1:26:18schooling. At a time when Americans feel like that they are being taken advantage of, and this is something that I hear every day from my constituents, when there are so many people who have done everything right and have nothing to show for it, we should be committing ourselves to doing more to help them afford the skills that they need to be successful, not doing Miss Lightning, in your
▶ 1:26:48testimony, you did mention that tuition and fees have nearly doubled in price over the last three decades. Can you use what little time we have left to talk about why that is and what Congress can do not only to help those families deal with the rising costs and prices, but also to rein in the overall cost of higher education?
▶ 1:27:12Thanks for the question. It's it's a complicated one and it really depends on which sector of education you're talking about. So if we're talking about public education, for example, state budgets are a really important part of this.
▶ 1:27:23Let's talk about public education.
▶ 1:27:24So let's talk about public education. I'm a community college graduate. Um we see we don't see as much investment by the states in some of the colleges as we should. But also I think the federal government has played a role in making in letting states off the hook because states as I mentioned earlier when they are facing budget cuts they decide oo you know what instead of cutting K12 education let's cut higher ed education because they can uh they can increase tuition for students and then what pays for
▶ 1:27:55that increased tuition federal student loans in the form of debt. So we have, you know, the states backing out and sort of shoveling out money and the feds are sort of shoveling the money in, but it but they're not those aren't actually real investments in terms of debt. Those are still things that people have to pay back. We need to make sure that whatever federal investments are being made are not then being used by states to sort of back out.
▶ 1:28:19We need to have a federal state partnership that helps to stabilize those costs and to make sure that both students have what they need in terms of aid for tuition and for living costs, but also that schools have what they need to help get students to and through college so that they're succeeding.
▶ 1:28:35Well, thank you for that. So, what it sounds like you're saying is a stronger um really to help undergard our students. I've spent a lot of time during our um recess going to all of the Georgia institutions talking with the presidents there and um I've heard pretty much the same thing and so thank you for your testimonies. Thank you for your witness and I yield.
▶ 1:29:06Thank you. I'd like now to recognize my colleague from West Wisconsin, Mr. Cman.
▶ 1:29:11Thank you. Uh, I don't know whether you've covered this already, but I'll let each let let each one of you just kind of rattle off. What percentage of kids going to a four-year college should we have as opposed to the number who are going there? Now, we'll start with Mr. Drager and just work our way across.
▶ 1:29:28Uh I don't mean to skirt the issue uh but as many as want to I think um I don't know if that's u I I think the market could determine that sir frankly um I think if I think
▶ 1:29:51well right now we're clearly subsidizing the idea that more people should go to college A and we hire at no small expense guidance counselors to advise people what they should do. Of all the people going to a 4-year college right now or say metriculating when they're hoping to get a degree, what percent should be applying to a four-year institution and what percent should be looking to do something else?
▶ 1:30:21I have no idea. Uh the market is so distorted. Um uh I I have I have no idea, sir. Um
▶ 1:30:31I'm just going to copy what uh my colleague Justin Drager said. I think as many as want to as many as many people who think that college is going to give them the opportunity and the economic mobility that they need to go to uh when they go through.
▶ 1:30:45But what if they're being lied to? That's why I'm asking.
▶ 1:30:47Absolutely. I mean, I think that's part of the whole point of this conversation is that we need we need to have transparency not just around costs, but about whether or not it's
▶ 1:30:55nobody will say why don't we ask the guy on the end here.
▶ 1:30:58Uh, so the Department of Labor does actually do studies looking at the educational requirements for jobs. And so if you look at that, uh, I want to say it's about 18% of jobs would require a bachelor's degree and between five and 10% would require a graduate degree. You compare that with the with how many students actually have one, I think it's about 24% have a bachelor's degree and about 14% of a graduate degree.
▶ 1:31:22So, putting it all together, we we've got about 10% more people going to college than the Department of Labor estimates actually need that those
▶ 1:31:32Oh my goodness, that's kind of a sad state of
▶ 1:31:34and that's 10 percentage points, not 10% more. Sorry, misspoken.
▶ 1:31:39Yeah. Um, do you guys have off the top of your head, you know, can anyone tell me in certain occupations how many people have a a degree? Like I we fly out here every week. You look at the flight attendants, say, "What percentage of flight attendants have a college degree?" Or the other night I was shopping late at the grocery store and the gal behind the counter checking me out had a master's degree.
▶ 1:32:05She was freely saying she didn't really get a lot of value out of her master's degree, but um she was happy with her job. Uh do you guys have any anecdotes of of jobs that normally you don't think you need a a bachelor's degree for and the percentage of people doing them that have a bachelor's
▶ 1:32:26So, Mr. Mr. Gotman, I been in a couple hearings with you and I I I I agree that um one of the studies that we've done at Strata Education Foundation is the number of people who have pursued a certain degree or credential that wasn't required for the meaningful work that they ultimately pursued. Um this does happen. Um
▶ 1:32:44it does happen. It happens all the time. It's the norm. But go ahead. However, sir, I I think where I was going is the answer to this question probably isn't from the supply side or the government trying to figure out exactly where the market is headed from year to year, but more how do we provide meaningful outcome data that is helpful to students early on.
▶ 1:33:04And from our research, what we're seeing is besides price clarity, what they want is very clear return on investment information about where does this degree or credential lead, what are the earnings, and what can I expect to receive on the other side to help them make meaningful decisions.
▶ 1:33:21Okay. Um I'm trying to think what the number I I toured Walmart warehouse the other day and their truck drivers. I can't remember they're making 110 or 140 grand a year. I'll have to call the lobbyist and find out. Um but and they they do that when they're 21 years old. Um what percentage of college graduates are making 110 grand a year?
▶ 1:33:50Four-year Anybody know?
▶ 1:33:53Very small.
▶ 1:33:55Very small. In other words, if we just were concerned about finances, the vast majority would be better off. And I'm it's a tough job. I'm not saying most people could do it, but we better off driving truck at Walmart. Probably in most cases something more uh useful to society as well. I'll give you one more quick question on my way out here.
▶ 1:34:18Um we'll leave that be. Thomas, thank you so much. Um, I'd like to recognize uh my my friend, my colleague from California, Mr. Dier.
▶ 1:34:38Thank you, Mr. Chairman.
▶ 1:34:40Thank you, Mr. Chairman. Thank you for having this hearing. It's really important. And thank you for all the witnesses. Um, yesterday that was a national story in the New York Times and I think the title was uh long-term um unemployed biggest cohort now is college graduates.
▶ 1:34:58And it just reminded me of it there wasn't that long ago as a member from California when I was in the legislature, everybody was talking about the knowledgebased economy and everybody needed to not only have a bachelor's degree but a graduate degree and I remember having a conversation when I was the chair of the labor committee in the state senate with the chair of the higher education committee and we were looking at how what used to be in the 50s and 60s in California one of the great career tech infrastructure with
▶ 1:35:28the community colleges and and with the department of corrections just one but had been neglected for years and we focused on more to higher education. So this conversation I think is really important um and things that Mr. Norcross said uh just remembering how we had to rebuild career tech um and going lots of high schools and community colleges in California.
▶ 1:35:53So, um, we get carried away sometimes with the marketing and particularly for disadvantaged communities, it's a challenge. So, Miss Lighton, I want to talk about PEL grants. I've spent a lot of time on PEL grants here, trying to make them um based on merit and considering the demands on all of the people who um should be in higher education who choose it and have a career path.
▶ 1:36:17but for disadvantaged people sitting at places like Stanford, the University of California system and kids can't get enough to eat or couldn't get housing. Um so we tried to make PEL grants based on merit but also based on need so that the public would get the benefit of having really talented people um get their degrees.
▶ 1:36:38So could you talk a little bit about how some of the changes we've made the last few months make it more difficult to get people of merit who do have potential for really beneficial careers with a undergraduate degree or a graduate degree. How much more difficult have we made it for those folks and particularly based on merit less about anything else and need?
▶ 1:37:04I'm sorry. Could you clarify what you mean in terms of uh the the changes that you're seeing right now?
▶ 1:37:10So in the in the big bill, I'll just say
▶ 1:37:13Um it made it a little more difficult from my looking at for for for this cohort of people uh for a variety of
▶ 1:37:21Um but just analytically trying to make sure the best and the brightest actually get access and where federal grants and loans come into play in that regard. I mean, I think the truth is it's going to make it less affordable for uh for low-income students uh in terms of I think we've seen at least with some of the loan changes. We've seen uh a streamlining of some of the repayment plans, but I do think there's a system in which now low-income students are going to pay more.
▶ 1:37:48And so I I don't know enough in the data to sort of see, you know, the the sort of talent distribution amongst those individuals. But I think we have to assume and we have to believe that uh I think to Justin's point earlier, anybody who who wants to go to college and complete college and succeed should be able to go and it should be affordable. And I think the federal government has a really important role in that. I was a Pellgrant student. I went to a community college and then I transferred to a four-year. In fact, it was I think Miss Bonabini is gone.
▶ 1:38:17But the combination of federal aid, grant aid, work study, along with lower costs at the state level and some additional funding allowed me to get out with very little debt. And students don't have that option now. They didn't. It was harder a few months ago. It's going to be even harder going forward with the implementation of this law.
▶ 1:38:37Yeah. And it again in California, the community college system, getting an AA and then going on and getting a bachelor's degree was Pat Brown's vision is really worked out well for the public. How about the disabled community? I spent a lot of time with the disabled community. They have harder time getting through and getting jobs. How much how might that community be impacted by some of the changes or just in general?
▶ 1:39:02So my work hasn't focused specifically on students with disabilities, but I think that we we know that when information is unclear or when support is cut, when there's less investment, it always harms the students who have uh the most barriers and I think students with disabilities face additional barriers. So I think the same reforms that will help students like clear information, stronger PEL grants, affordability guarantees are especially important for people with disabilities.
▶ 1:39:30Just a brief ob observation uh when we were having problems with some colleges particularly forprofits my predecessor whose portraits up here uh and we worked together both in California and here to make sure that the marketing was accurate so that they wouldn't get state loans in California if you were advertising an 85% uh opportunity to get uh a chef's job or something and it worked.
▶ 1:39:57um got a lot of those people who are abusing the the federal and state loans out of the business. So uh with that I yield back. Thank you, Mr. Chairman.
▶ 1:40:05Thank you. And now I'd like to recognize my colleague from Missouri, Mr. Andre.
▶ 1:40:09Thank you, Mr. Chairman. And thank you to all the witnesses to coming before the subcommittee today. Most parents number one saving savings priority is college tuition. And yet three out of 10 parents say they're unsure of what the final sticker price of college would be. I imagine it's actually higher than that. In recent years, parents have been taking out more loans and even dipping into retirement savings to send their kids to college.
▶ 1:40:35But unfortunately, there's little incentive for institutions to provide a good faith net cost estimate because they fear that d doing so will drive families to a more affordable school. institutions are under significant pressure to do whatever they can to generate more revenue and often ex resort to unethical tactics described by our witnesses today. According to the GAO, only 9% of institutions provide accurate net cost estimates in their financial aid offers.
▶ 1:41:03In 2008, Congress tried to address this price transparency problem by requiring all institutions to post a net price uh calculator on their website. Um Dr. Dr. Gillan, when the law was passed, it seemed like the net price calculator requirement was um an important step toward transparency, but it has clearly been insufficient in this dysfunctional pricing system. What other reforms could help here?
▶ 1:41:30Yeah, absolutely. So, the I I think the initial law was was good. There was a long lead times. I think it was about three years from when the laws passed when the schools had to comply. Um and then when we saw what they did, they were all using different formulas.
▶ 1:41:43So they were all calculating some were including loans some weren't like um and so so there these are basically not comparable across institutions for the most part uh and they were also tended to be pretty difficult to find um and so I think I think addressing that uh making this making it more standardized and more uh more easily usable I think would go a long way to to fixing it and and I I I don't want to put a one-sizefits-all solution on this.
▶ 1:42:11So like I I think we should have a universal methodology one, but I think we should also allow the colleges to say, "Okay, but this is what is unique about Grove City or this is what's unique about my institution that this that this universal methodology doesn't fix and here's what we think the real number is." But they have to report the the kind of comparable one and then they can make their case for why that that doesn't fit for their particular
▶ 1:42:33You know, I found your um your testimony about the the three different types of goods. You said search goods are like buying you know light bulbs at Walmart. Is it experience goods like restaurants and then credence goods? What's what's a credence good?
▶ 1:42:48So so credence good is basically you don't know even after you purchased it if it was what what you got like like realistically like I don't know if my college education paid off until I'm like retired.
▶ 1:43:00Like I'm sitting on my porch drinking iced tea and like then I'm like you know what that was a good idea. I'm glad I did that. like um but but
▶ 1:43:06it really is like that. It really is like that. Yeah.
▶ 1:43:09Um and so
▶ 1:43:10lifetime earnings, that's what's different as an engineer versus a polyai major. Okay, got it. You know, and I just can't help but to think, especially in this day and age, how many parents sent their kids off to school and those kids got radicalized. Sometimes the universities, the colleges contributing to that radicalization and sometimes even cut off their parents, no longer wanted to talk to people like them, usually meaning a MAGA Republican or some such things.
▶ 1:43:40I I just think we place a lot of trust in institutions of higher education and we get very little good faith back in return in the financial aspect or in the um if you will moral development and and intellectual development aspect. Um uh and uh Mr. Mr. Wishing uh yeah Grow City um and we only have a minute left.
▶ 1:44:08Um, I mean, Grove City College, it sounds like it's doing exactly what we would want a college to do. Give a a an actual an actual price uh and then produce outstanding outcomes. 96% of your graduates employed or enrolled in a graduate student within six months. What What do we What do you attribute this success to? Well, um, number one, we're we're upfront about our price.
▶ 1:44:38Uh, I think people understand the value when they come in. Um, we don't pull any punches about the rigor of Grove City. Um, you've got to work hard to get a degree at Grove City. Um, employers know that. Um they we generally attract um uh families with uh students of families that have good values. Uh they've got a good work ethic.
▶ 1:45:04They have to work hard at Grove City and um and they've they've learned a lot. They're wellprepared. But when they graduate, um they don't leave those values on the graduation stage. That's all the companies are work looking for. People are going to put in a hard day's work. They're prepared to do the job and that's what we graduate.
▶ 1:45:22Well, thank you. I yield back, Mr.
▶ 1:45:24Thank you so much. Um, like to now recognize my colleague from Connecticut, Miss Mr. Courtney.
▶ 1:45:30Thank you, uh, Mr. Chairman, and thank you uh, to the witnesses. Uh, again, your testimony was really interesting, good reading, and um, obviously this is an important topic. The the topic of the hearing, which is no more surprises, you know, when you talk about higher education, there's lots of surprises. And in fact, one of them happened while we were on recess. We're on August 1st.
▶ 1:45:50The Department of Education announced that um student loans that are in forbearance are now going to have interest acrruel uh reinstated, which again there was no heads up, no warning from Secretary uh McMahon. Um there was an article um which uh AP and um at News Nation actually reported that student loan payment pauses have doubled since last year. Again, we're talking about a universe of student loan borrowers in this country of 43 million Americans.
▶ 1:46:19Um that number in terms of people who are now in deferment jumped from about 2.5 million last year to over 10 million um as we sit here in in this hearing room. So that's a big surprise and it's having a ripple effect on our economy.
▶ 1:46:34I mean there's just no question that um you know adding debt and having the interests recapitalizing and acrewing which you know say what you will about the last administration they actually at least stopped that sort of cancer that happens to people's uh student loan balances because of the way the system um again had just sort of been neglected for so long in terms of policy makers that really need to get into this problem and you know clearly having um accurate
▶ 1:47:05pricing and real pricing for families is a very loudable uh goal and I and I think you know um there's way too many um students who are starting off in in college with um really not good awareness in terms of employability uh etc. Uh but again, they're also starting off this year with um interest rates on their student on their Stafford loans of six and a half percent. Parent plus are back up in the 9% range.
▶ 1:47:34Again, we went through a low interest rate environment for a while. That's now a thing of the past. And um and and honestly this subcommittee should be looking at this problem which the Department of Education just worsened with their latest announcement in terms of you know the impact on maybe there's people who want to defend that policy but there's no question that you know the out-ofpocket costs that people are going to in are going to experience because now interest is going to
▶ 1:48:04acrue again on on the tens of millions of student loans. loans that are out there that are again now just cascading back into uh deferral uh because of the really uh the I think botched job of the one big beautiful bill.
▶ 1:48:22I mean, it's nice to say we're going to cap the amount of loans people can borrow, but if you're a medical student, you know, I mean, having a cap uh on student on Stafford loans in terms of trying to get a specialty degree um is is no solution. uh it's just going to shove you into the private market where if you don't have any collateral to put down on a on a on a loan application, you're you're going to be in stratospheric um interest levels.
▶ 1:48:50Um so in any case you know another u issue that's happening over at the department of education is that um the national center for education sciences which uh again is the arm of the department of education that actually has the eyes on higher education the staff has been gutted um and um Miss Leighton and maybe you can just sort of talk about the fact that you know if we're really serious about trying to get to the bottom of transparency you know we need to have headlights out there to see where we're
▶ 1:49:22Yeah, I agree with you. I think we absolutely do. And you know, I think we it would in a I don't know if it's an ideal world or not, but we don't live in a world in which you can do these things without people. And you need people who have real deep expertise, not just contractors or people who you can sub in and people who are doing five jobs. I will say I used to work at the Department of Education and the career staff there work incredibly hard.
▶ 1:49:47They have incredibly deep expertise and knowledge and they were underststaffed before the rift started happening and they were underststaffed and doing I think too much before all of the new requirements for HR1 and if we are talking about trying to understand the impacts of some of the changes of uh that we're that you're talking about in terms of the bill like are students going to be pushed into the private market? We need to know that. We need to have the data to be able to understand that. Maybe they won't. Maybe it will lower the cost of college.
▶ 1:50:16Maybe it will be beautiful but maybe it won't and we need to find out and in order to do that you need data and you don't just need random people who are doing the data you need deep the deep deep expertise that we have in the na have had in the national center for education statistics the chief data officer and all of those I mean all of those offices are just shells at this point.
▶ 1:50:37Great. Thank you. I yield back.
▶ 1:50:40Thank you. I'd like to represent recognize my my colleagues from Guam. Thank you, Mr. Chairman and ranking member. Thank you panel for being here today. You know, tri price transparency is perhaps one of the most meaningful ways we can protect American students. Surprise costs under stated related expenses and hidden fees endanger students financial stability and the likelihood if they decide to graduate.
▶ 1:51:09So price transparency is also incredibly important for students from the islands like Guam where it costs prohibitive if I wanted to visit a campus and cities ahead of time and and decisions to go to school can be made without seeing the schools first. I couldn't do that. And students in remote areas like my district Guam rely on clear, transparent pricing to make informed decisions about their future.
▶ 1:51:36I went to Hawaii for school for a couple of years just because my my high school buddies were over there. I thought I could afford it. My parents gave me um couple hundred dollars. That's what I had to rely on. When I got to Hawaii, well, I couldn't make it. Uh but I found a lot of pennies on the ground. And I also did well with green stamps at the grocery stores when buying canned food. But then I I joined the army and the rest is history after that. Uh and I'm I'm still glad I graduated. Eventually got a four-year degree. It's credence goods.
▶ 1:52:07Is that's how you say it, doc? Okay. Um, so my first question is for you, Dr. Gillan. Um, you argued in your testimony that higher education doesn't function like an ordinary competitive market and colleges often compete for prestige in their fields. What effect does subsidy and prestigriven spending have on students like like us from Guam or the rural areas and who may be navigating to the college market for the first time?
▶ 1:52:38Yeah, that is a great question because we we actually see a very different effect with subsidies in higher education than we do in other industries. So like if if you guys decided to subsidize like bread or something, we wouldn't expect for the price of bread to just increase. But there's pretty strong evidence that that's what we do see in higher education is that the availability of these these financial aid programs actually lead the schools to charge more. Uh and it's because we're stuck in that credence good model um that that we're seeing that that impact.
▶ 1:53:06And so uh I don't want to oversell. It's not a one for one thing. So if you provide one more dollar of aid, it's not like they raise tuition by a dollar, but it's not zero either. Um, and so so there's there's a bunch of scholar these studies that tend to find it somewhere between like 40 and 70 cents uh is is is the increase in uh in aid. Uh and every once in a while you do see one that does see a full dollar increase. But uh but yeah, it's a and and that is a very bizarre result that we we don't see in other industries.
▶ 1:53:35Um and and it's entirely because we're in this this strange bizarre uh competitive environment in higher education that subsidies work differently in this industry than they do in others.
▶ 1:53:47Uh thank you. Another question for you. You also talked about price discrimination and just give me a little bit more about disproportionate impacts uh for again the lower middle class income communities.
▶ 1:54:00Yeah. Yeah. Absolutely. So, so one of the one of the great and and bad things about higher education institutions is that they think they're doing really good work and if they're a Christian college, they think they're doing the Lord's work. Um, so they don't exactly feel bad about extracting more resources from from students and parents. Um, and so so as long as they can convince themselves that what they're going to do with that money is is worthwhile and good and beneficial, it it reduces their their their hesitation to do so.
▶ 1:54:29Um and then so then when you look at some of the practices that have occurred so so one of the things that that students do when they go to college they fill out the FASA government form uh the government actually shares those results with the colleges and not only do they do they share like the headline numbers they share you know parent income parent assets like these colleges know more about the students and the parents finances than the IRS does.
▶ 1:54:55Uh not only that, they also the on the fastet form, you also uh list the the colleges that you want to share the the results with and colleges will look at the order you rank them in that list on the assumption that you're going to rank your top school first. And so they'll adjust their financial aid offers based on where they show on that list.
▶ 1:55:14They're like, "Okay, if if if you apply to Duke and I'm North University of North Carolina, but you rank Duke number one, I I might adjust to the the financial aid that I that I offer you to either entice you uh to to enroll or basically say, "Oh, you're a lost cause because you're going to get into Duke and go there." Um and so so the the level of detail uh that that the colleges at the top end like community colleges are not doing this, open access institutions not doing this but at the top end the the level of detail of of
▶ 1:55:45price discrimination that they engage in is is a shocking.
▶ 1:55:50Thank you for your answers. Thank you panel. Thank you Mr. Chairman. Yet
▶ 1:55:54thank you. I'd like to now recognize the ranking member for the full committee. a colleague from Virginia, Miss Scott.
▶ 1:56:01Thank you. Thank you, Mr. Chairman. M uh you mentioned the gentleman from California talked about um inflation of the sticker price. You said there's a lower price. Can you say what the lower price inflation to what people actually pay inflation has been? Has that been closer to regular inflation?
▶ 1:56:24I don't actually remember off the top of my head. certainly has been increasing at a much lower rate than the than the sticker price. Okay. And I'm looking at Andrew to see if you remember. Sorry.
▶ 1:56:36So So I think you're you're talking about net price versus sticker price,
▶ 1:56:40Um and you can adjust both of those for inflation. Um but but yeah, so so net price will always be lower than sticker price. Um, and so like at community colleges right now, like the average tuition sticker price is 4,000, but the average net price is actually minus 700. Um, because students get PEL grants and they use some of it for housing. So like there's there's there's differences like
▶ 1:57:02Thank you, Miss Leon. And you mentioned a couple of times about medical school. It's more difficult because of the big ugly bill. Can why is why is it difficult specifically? Why is it difficult to go to medical school? Well, medical school is expensive and it's really expensive and now with the new loan limits, um you used to be able to have unlimited borrowing for graduate programs of all kinds.
▶ 1:57:26Uh and we can talk about whether or not we used to have unlimited graduate borrowing and that includes medical schools. And now under this under the new law, you have this limit for professional schools which includes medical schools. And in many cases, it's not going to cover the cost of medical schools. And so unless you can cover the costs, you can't go.
▶ 1:57:46Correct. And and so you're either going to you need to have family money that's going to pay for it or you're going to need to go to the private market. And that's going to really I think change who can become doctors in this country, which is probably, at least from my perspective, not an ideal policy
▶ 1:58:01Thank you. And those that have taken out those massive loans actually because they became physicians can actually pay them back. Is that right?
▶ 1:58:10Absolutely. And I think that's that's a really important distinction with the medical with in the medical fields. They will earn enough to pay it back. So they should be able to borrow enough to be able to go and earn those dollars and provide that service to the community.
▶ 1:58:23Thank you. Mr. Wishing. Uh you mentioned se several of the schemes um students subsidizing other students for example. How do any of the pending legislative proposals deal with any of those schemes? Uh I'm not familiar with those uh proposals, sir. Um my recommendation.
▶ 1:58:48I I um I appreciate um the I I I think I let me say this. Uh the one proposal that I'm aware of is like the price guarantee for four years. I do think the marketplace would respond well to that.
▶ 1:59:03Well, marketplace would respond well. Well, how how do colleges know what the costs are going to be three years from now? No, I mean you got
▶ 1:59:10Well, that's a good point. Yeah, that sir, that's a good point. Inflation is is particularly difficult, and I think you'd have to have an asterisk with that. Um, depending
▶ 1:59:21you you would have that safety valve in case you had 8% inflation like we had during during COVID. Uh, you wouldn't stick them with a previous suggestion that the price wouldn't go up. I uh frankly I think it would it would be it could get it could get schools in a bind if you saw a sudden spike.
▶ 1:59:43Uh in inflation, sir. I my my recommendation would be for to to consider that. I think that's I think it would be helpful for families. I do think there's a pretty easy solution here. um uh in in the cost of attendance just um have schools and I think you guys have a lot of this information by the way but just have schools um report their break even cost.
▶ 2:00:09Well that's not I'm not sure that's part of a legislative proposal but let me ask you another it's we have a habit around here of having a proposal and then coming up with complaints and never showing how the proposal actually deals with the complaints. But if a college decided to admit students on a merit needlind basis and guaranteed that everybody who got admitted would be able to afford to go because they'd make the um afford make it affordable.
▶ 2:00:40Some colleges for example say if you make less than $60,000 you can get in. How could you avoid that kind of scheme you've talked about? Um I I'm not sure if I understand the question sir.
▶ 2:00:55Well if if a college is admitting people um need blind um
▶ 2:01:05well yeah that I think that that's an interesting question. I do think in the case of G city sir we do want to know what students need is and we we're very clear about trying to help students fund that need. Well, Mr. Drayton, did you want to
▶ 2:01:22We can help students if we we know what their need is, but we don't want to bamboozle some students to help others.
▶ 2:01:29Mr. Braden, did you want to comment very
▶ 2:01:30Yeah, very quickly, Mr. Scott, I think you're hitting on a very important point, which is schools are looking for ways that they can under some safety net or umbrella collaborate together to be much more transparent, meet student need, but they are very afraid of talking to one another for fear of violating antitrust or being accused of violating some antitrust provisions.
▶ 2:01:52And we have to find some ground to allow them to not control prices uh but find some ways to meet full need or affordability guarantees and still collaborate on best practices to do
▶ 2:02:06Thank you, Mr. Chairman.
▶ 2:02:08Thank you. I'd like to recognize Mr. Gman for a statement.
▶ 2:02:11I'm sorry I misled the committee before. I now talked to someone. I misled him as to what a beginning Walmart truck driver is making. It's about 135 grand a year. I didn't want to overstate it before, so now I've confirmed it.
▶ 2:02:24So, you know, if you if you are advising anybody and they're up in the air with to go to college, make sure they only take the best, not other other truck other companies don't pay that much, but it's 135 grand a year and that's before the 6%, you know, 401k match and all the wonderful bonuses you might get. But just so you know, kind of surprising, huh? And that's just in little old Wisconsin. Who knows what they make in New York?
▶ 2:02:48Thank you, Mr. appreciate that. Okay. U we're going to now look at closing uh doing our closing remarks. I'd like to recognize Miss Adams for her closing
▶ 2:02:58Thank you, Mr. Chairman, and and thank you once again to our witnesses for speaking with us today. Since President Trump took office and congressional Republicans lined up to do his bidding, college has gotten less accessible and more expensive. As the cost of college continues to rise, students and families need adequate transparency and meaningful support from institutions of higher education.
▶ 2:03:21Paying for college shouldn't require families to jump through hoops and navigate opaque, confusing systems without help. And that's why resources like the Office of Federal Student Aid are critical to student success. Yet, the Trump administration has ripped away those resources, slashed grants for students, and overall made college more expensive with provisions in the big ugly law.
▶ 2:03:48I it it's true that colleges and universities must work towards greater price transparency for students and families, but but let me be clear. If we truly want to deliver on our promises to students, then we must take a comprehensive look uh not only transparency but but the broader issues facing higher education today, including high tuition costs, crushing loan debt, and campus safety.
▶ 2:04:17You know, I mentioned ear ear in my earlier comments about the gaps that students face and that families face, but but we got to figure out a way how families fill those gaps uh with aid and scholarship that they that they don't have to pay back. And I can tell you that it's a problem for one size doesn't fit all.
▶ 2:04:37Uh and uh I know that um that closing these gaps for first generation college students as I was uh those um uh are are those are very challenging especially students who attend our H.B.CU. And so while I appreciate uh the discussion today uh in this hearing, it's time that we face reality.
▶ 2:04:58College affordability will not be magically solved by bullying institutions into providing transparency while leaving institutions on their own with no help from the department due to student due to recent riffs. But we must fight back against the Trump administration's unfettered attacks on our education.
▶ 2:05:20And we've got to work with institutions to prioritize affordability and success for all students, not just the wealthy and well-connected. And thank you, Mr. Chairman. Thank you to our witnesses today. I yield back.
▶ 2:05:34Thank you. Um this has been a very enlightening um hearing and I want to thank everyone sitting here. Um, you know, I think about growing up the the concept of college, what it meant, and I I think we've lost our way along the way. Um, it used to be where higher education was a legacy, and I I'm part of that legacy. By the way, my my grandfather was a third grade dropout.
▶ 2:06:00My dad went to war through GI Bill, went to Ohio State, got his PhD in a crime, was uh 40 years and college professor, very successful entrepreneur. uh his legacy is me sitting here going to University of Miami and now here in Congress. That's the way it all has always been in the past. Education was supposed to be our gateway.
▶ 2:06:20HPUs uh during the days of segregation during the time I grew up their mission very simply was to produce the greatest minds ever to go out and and represent their communities to command respect because that's what the goal was. And at that time, uh, black communities, uh, uh, HBUs graduated more a higher percentage of black men than any other any other, uh, race out there.
▶ 2:06:44So, from that point to where we are now means we've we've we've lost the mission and it's it's time for us to bring back talking about ethical um, the the idea of the product should be our kids, not the institution, not to bloat our our bureaucracy with a lot of people making a lot of good It should be what is the mission to make our country the greatest in the history of mankind.
▶ 2:07:10U and I'm so thankful we're finally having this conversation because obviously this has been going on for quite a while to whereas muscle memory you just do it and sitting in in summits and people think of all kind of unethical ways of doing things and they see no wrong with it. That's not who we are. So I'm excited about the fact that first of all you're here to to educate us all. I'll now know what uh credence goods are. I will never forget that.
▶ 2:07:34to my last day I'll say was it really worth Um it is about loss it is about return on investment. Uh we have to be as innovative in this industry as we are in everything else we do. What is it can we do to tweak the innovation to make sure our kids are coming out smarter, better, more hopeful, not ever ever thinking it was a waste of time. Uh and what is the right niche? So we're going to start doing that. I I I'm so thankful we have a a panel here on both sides of the aisle.
▶ 2:08:03We realize we have need need to address this issue. Uh we're going to lean in very hard. I think if I can just make one last ask. Uh I think we have a very innovative legislative body now. House, Senate, and the president. We want to get this right. Our big ask is as legislative uh leg innovative legislators, we need to hear from you. We need to know what does that mean? what does it mean to tweak this so that it's truly the best experience for for the kids coming in for parents thinking that was a great choice for them.
▶ 2:08:32So, we're going to ask you guys to do that. Uh I would say be more proactive you ever have been. Think outside the box more than you ever have been. Know that we're willing to hear this and we're willing to work with you. We have to be as innovative and I think we take the special window that we have now that we're having these conversations and make that happen. So, uh I want to thank you uh seriously for this this particular hearing. Uh, I've learned a lot. Uh, things I had never known about and now I know. And now we we now know we have to get moving to get things get things accomplished.
▶ 2:09:00I'd like to thank the witnesses again for taking the time to testify before the subcommittee today. Without objections, there being no further business, the subcommittee stands adjourned. Thank you so much.