U.S. Senators Zero In on Higher Education Regulatory Costs

U.S. Senator Lamar Alexander (R-Tennessee), Chairman of the Senate Health, Education, Labor, and Pensions Committee, has committed to finishing a rewrite of the Higher Education Act by the end of 2015, vocalizing strong support of a plan backed by colleges and universities that would reduce the burden of federal regulation on higher education.

At a Senate hearing on Tuesday, Vanderbilt University President Nicholas Zeppos said that complying with current federal rules and regulations cost his university nearly $150 million each year, or 11 percent of the university’s total non-hospital expenditures.

That figure comes from a new report illustrating the “jungle of red tape” American colleges and universities operate within.  The study was commissioned by Sen. Alexander along with Sens. Richard Burr (R-North Carolina), Michael Bennet (D-Colorado) and Barbara Mikulski (D-Maryland) and reinforces Sen. Alexander’s optimism that there will be a bipartisan effort to shape the act’s reauthorization to benefit both higher education and the taxpayer by providing appropriate, but not excessive, oversight.

Legislators plan to use the report as a “blueprint” to the reauthorization of the Higher Education Act.

“I have talked with Secretary Duncan more than once about this effort, and he is eager to do his part to solve the problem. I look forward to working with him and with the President on eliminating unnecessary red tape, saving students money, and removing unnecessary regulatory obstacles to innovation in the best system of higher education in the world,” Alexander stated.

Governor Bill Haslam Launches Drive to 55 Initiative

Driveto55HorizontalLogoGovernor Bill Haslam today officially launched his ‘Drive to 55’ Initiative, the goal of which is to increase the percentage of Tennesseans with a post-secondary credential in order to meet Tennessee’s current and future workforce and economic needs. A broad assemblage of higher education and business stakeholders as well as members of the Tennessee General Assembly attended the launch.

“We want Tennesseans working in Tennessee jobs. We want Tennesseans to have an opportunity to get a good job and for those in the workplace to be able to advance and get an even better job,” Haslam said. “Currently in Tennessee, only 32 percent of us have a certificate or degree beyond high school, and studies show that by the year 2025 that number needs to be at least 55 percent for us to keep up with job demand. We have a lot of work ahead of us.”

The governor outlined Tennessee’s current situation including:

· Nearly 70 percent of Tennessee students entering community college need remedial classes before they can take college level courses;

· More than 20,000 Tennessee high school graduates choose not to continue their education each year.

· There are approximately 940,000 adult Tennesseans that have some college credit but haven’t earned an associate or four-year degree.

· On the state’s current path, Tennessee is projected to reach 39 percent of citizens with a certificate or degree beyond high school by the year 2025. To reach 55 percent would be 494,000 more people.

· Tennessee is 20 percent below the national average in terms of degree attainment.

Among other speakers, the governor’s special advisor for Higher Education, Randy Boyd,  gave an update on the progress made to date on the ‘Drive to 55’ initiative including:

· $16.5 million in this year’s budget for equipment and technology related to workforce development programs at Tennessee colleges of applied technology and community colleges, which institutions will begin receiving in the coming weeks.

· Launch of WGU Tennessee – an online, competency-based university aimed at the 940,000 adult Tennesseans that have some college credit but didn’t graduate with an associate or four-year degree.

· Newly created endowment of $47 million using operational reserve funds from the Tennessee Student Assistance Corporation (TSAC) to provide nearly $2 million each year to support scholarships for “last dollar” scholarship programs such as tnAchieves. These scholarships fill the gaps between students’ financial aid and the real costs of college including books, supplies, room and board.

· Launching the SAILS program, Seamless Alignment and Integrated Learning Support, to give students who need extra support in math attention during their senior year in high school so they can avoid remediation when they enter college.

· Legislation sponsored by Majority Leaders Mark Norris and Gerald McCormick to create the Labor Education Alignment Program – or LEAP – to better coordinate key stakeholders on the state and local level to address workforce readiness.

· And new online learning innovations in Tennessee through partnerships with edX and Coursera.

Haslam appointed Boyd to the position in January, and he has consulted with a formal working group made up of the governor, executive director of the Tennessee Higher Education Commission (THEC), chancellor of the Tennessee Board of Regents (TBR), and president of the University of Tennessee.

In his presentation, Boyd also placed emphasis on the importance of dual enrollment and other high school pre-college programs, a topic many legislators have been avid to address next session. Boyd stressed that a successful effort to reach 55 percent degree attainment will require the state to focus on more than two and four-year degrees.  An increasing emphasis will be placed on certificates at technology centers and community colleges.

The governor will be traveling the state in the coming weeks to further discuss Tennessee’s workforce development needs and the ‘Drive to 55’ Initiative.

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With two hearings, Congress takes first steps toward rewriting Higher Education Act

From Inside Higher Ed, By Libby A. Nelson

WASHINGTON — There was no opening bell or official declaration to mark the occasion, but on Tuesday, Congress nevertheless began to take its first steps toward the next renewal of the massive law governing federal financial aid programs.

The Higher Education Act, last rewritten in 2008, expires at the end of this calendar year. No one knows when Congress will actually finish renewing it or how the deep partisan divide that pervades Capitol Hill will complicate what is already a lengthy process. Last time around, it took five years to renew the act after it expired. When the Education Department announced plans for a sweeping regulatory agenda on Monday, some saw it as a signal that its officials didn’t expect Congress to finish its work anytime soon.

But a Senate committee and House of Representatives subcommittee kicked off the process regardless, holding the first broad hearings on higher education since the new Congress took office in January. Despite the scope of the hearings, and the divisions between the two parties that control each house of Congress, both ended up discussing how to simplify the complex federal financial aid system. And the most urgent item on Congress’s higher education — dealing with the interest rate on federally subsidized student loans, which is scheduled to double in July — made only a brief cameo at both hearings as panelists and lawmakers focused on broader issues.

The House hearing was billed in part as a chance for members to get up to speed on higher education issues as they prepare to rewrite the Higher Education Act, with written testimony that included an overview of the 40-year history of federal financial aid. The Senate hearing was narrower, focusing on students’ views of the financial aid system. Both quickly made their way to calls to make the financial aid application process easier to understand.

At the House hearing, Rep. John Kline, the Minnesota Republican and chairman of his chamber’s Committee on Education and the Workforce, asked for specific suggestions on how to simplify the federal financial aid system, saying simplification had long been a “major goal” of his.

The suggestions, from Patricia McGuire, president of Trinity Washington University, and Dan Madzelan, a longtime senior Education Department official who retired at the end of 2011: start with the application process, the Free Application for Federal Student Aid, long criticized for its complexity and impenetrability.

At the Senate hearing, the need for standardization and simplification was also a major theme. Ranking member Sen. Lamar Alexander, a Tennessee Republican, suggested that the costs of complying with federal regulation, as well as states shifting money from higher education to pay for rising Medicaid costs, were the reason for the tuition burden on students.

“We have so many regulations precisely because we have created such a complicated system,” said Sara Goldrick-Rab, an associate professor of education policy at the University of Wisconsin at Madison, who testified at the Senate hearing. “There’s an incredible need to simplify this … and to simplify this means to go back, to revisit where we were when these programs started out.”

Simplification is a “terrific goal,” said Terry Hartle, senior vice president for government and public affairs at the American Council on Education, as he began his testimony at the House panel — in fact, he said, simplification has been the “holy grail of each reauthorization for the past 25 years.” Still, each reauthorization has arguably made the financial aid system more complicated, not less. There are now seven options for repaying federal student loans, for example.

Maintenance of Effort?

Tuition prices, college costs and whether students get good value for their money have been a focus for the Obama administration for more than a year. Questions from members of Congress from both parties suggested that those questions will preoccupy lawmakers as well as they prepare to rewrite the Higher Education Act.

Panelists at the House hearing repeatedly pointed to state disinvestment in higher education as a major driver of college costs, an argument made early in the day in the Senate. Those offering testimony called on Congress to hold states accountable for maintaining or increasing their spending on public higher education.

“Public higher education, which educates 70 percent of students in the United States, is about to cross a historic threshold,” said Sen. Tom Harkin, an Iowa Democrat and chairman of the Committee on Health, Education, Labor and Pensions. “For the first time ever, students will pay a higher percentage of the operating costs… than state governments.”

But the system of federal financial aid is constructed in such a way that putting together strict “maintenance of effort” requirements — requiring states to keep funding public higher education in order to receive federal dollars — is difficult because states receive relatively little money for higher education from the federal government. As a result, previous maintenance of effort requirements have been “nibbling at the edges,” Madzelan said.

Rep. John Tierney, a Massachusetts Democrat, asked if there were any proposals for maintenance of effort “with teeth.” As part of the Gates Foundation’s Reimagining Aid Design and Delivery project, some outside groups recently called for turning some federal higher education programs into block grants to give the federal government more leverage over the states. But those suggestions — which if enacted would be a significant change to federal policy, particularly if Pell Grant funding was involved — didn’t come up at Tuesday’s hearing.

Income-Based Repayment

Another idea discussed at both hearings: improving the system by which students repay loans based on their income. At the Senate hearing, Ethan Senack, federal higher education associate at the U.S. Public Interest Research Group, called for making sure more information is available to students and “streamlining” income-based repayment.

The House hearing went further, discussing enrolling all borrowers automatically in income-based repayment. Rep. Tom Petri, a Wisconsin Republican and longtime advocate of such a system, recently introduced a bill to enroll all borrowers in the income-based program and collect loan payments through paycheck withholding — the same system used for paying income taxes.

Petri’s proposal is the “most complete and thorough proposal we will ever have,” Hartle said, and he argued that a system of automatic income-based repayment would deal with two of the three challenges facing student loan borrowers. It would eliminate, or at least alleviate, the burden that high loan payments can put on a graduate’s earnings. And it would do away with defaults in the federal student loan system.

But automatic income-based repayment could also worsen the other problem confronting student loans: students might borrow more than they should, Hartle said.

Little on Interest Rates

While the Higher Education Act expires at the end of 2013, that date isn’t a hard deadline — the law will remain in effect, and no one would be surprised by a delayed reauthorization. But July 1, when the interest rate on subsidized federal student loans (loans that don’t accrue interest while students are enrolled in college) will double to 6.8 percent without Congressional action, is a much more immediate issue.

In his budget request for the 2014 fiscal year, put forward last week, President Obama proposed a change to interest rates for all loans that would allow them to rise and fall along with interest rates in the overall economy. The proposal drew mixed reviews: Congressional Republicans praised it Tuesday, but student advocates — and some of their allies among Democrats — said the lack of a cap on the market-based interest rate could endanger students if interest rates spike.

At the Senate hearing, Harkin indicated that he wasn’t pleased with the lack of an interest rate cap in Obama’s plan. And Senator Al Franken, a Minnesota Democrat, joined with Senack of U.S. PIRG in asking Congress to act before interest rates double in July.

“The reality is that most students graduating from college these days, they’re not making enough money to pay the bills, let alone pay back these loans,” Franken said.

Philosophical Questions

For the most part, the House hearing focused on the technical side of broader questions — how to simplify the financial aid system to ensure access, helping students succeed while holding down costs (using strategies both large and small — McGuire, the Trinity president, told lawmakers that she does not serve cookies at faculty meetings because “our students go into debt to pay for college; we cannot be eating their tuition”), and collecting student data that accurately measures college completion rates.

But there were a couple of detours into the larger philosophical questions that underlie the federal government’s involvement in higher education. When his turn to question witnesses arrived at the House hearing, Rep. Tim Walberg, a Michigan Republican, opened by asking if too many students are going to college. Walberg said he was concerned about the growing number of students who need remedial classes. “Let’s make sure students are pushed, but it takes academic qualifications, and it takes excellence,” Walberg said. “Let’s not manufacture students.”

And near the end of the hearing, Rep. Luke Messer, an Indiana Republican, asked witnesses about the role of federal financial aid in driving up college costs. “Does federal student aid influence tuition? No,” Hartle said.

“You really believe that?” Messer said in response.

By the end of the hearing, the shape of any future Higher Education Act proposals — or even what members of Congress would like to see included in the legislation — remained unclear, as it probably will be for some time. The witnesses, though, set forward a few guidelines, emphasizing simplification and urging Congress not to regulate colleges too much.

“First,” said McGuire, as she began to lay out the principles she’d like to see underlying the next iteration of the Higher Education Act, “do no harm.”

Zack Budryk contributed to this article.

Haslam Announces Higher Education Initiative

Corporate leader & UT Alumnus to spearhead effort in coordination with state leadership

NASHVILLE – Tennessee Gov. Bill Haslam today announced that Randy Boyd will join his administration as special advisor to the governor for Higher Education to focus on affordability, access and quality of state programs.

Boyd will consult with a formal working group appointed by Haslam made up of the governor, executive director of the Tennessee Higher Education Commission (THEC), chancellor of the Tennessee Board of Regents (TBR), and president of the University of Tennessee.  Although Boyd’s position will be full-time, he will be working for the state on a voluntary, unpaid basis.

“Over the past six months, I’ve spent a lot of time learning from experts in our state and across the country about the challenges we face in higher education,” Haslam said.  “Only 32 percent of our state’s adult population has a post-secondary degree, but if we are going to a have a workforce that’s job-ready, we need to be at 55 percent by 2025.  The conversation needs to be about K to J with the ‘J’ meaning jobs.

“It is clear to me that unlike K-12 education where there is general consensus about how to improve education. That isn’t the case when it comes to tackling the ‘iron triangle’ of affordability, access and quality in post-secondary education. I am grateful that Randy has agreed to join our team to head up this crucial effort.  He will bring a business, workforce alignment perspective and a demonstrated passion for improving access to higher education to this issue. I believe it says a lot about the importance of this issue to the future of our state when someone of Randy’s caliber is willing to come from the private sector and serve in this way.”

In 2009, Boyd helped start tnAchieves, a non-profit organization that has sent over 3,200 high school graduates to community college free of charge with mentors. Of those students, 68 percent are the first in their families to attend college, and more than 65 percent have family incomes below $50,000.  The organization serves 26 counties providing universal college access to those high school graduates.

“I am passionate about improving educational opportunity for all our citizens,” Boyd said.  “To achieve the governor’s mission, we will need to broaden the net and to provide greater access.  I’m excited about this opportunity because Gov. Haslam is determined to make a material impact.  I believe our state has a rare opportunity, and I am honored to be able to assist.”

Boyd, 53, is chairman of Radio Systems Corporation, which he started in 1991.  Radio Systems is headquartered in Knoxville and has more than 600 associates worldwide with offices in seven countries. The company produces over 4,000 technology-based pet products under brand names such as Invisible Fence, PetSafe, SportDOG, and Premier. It is a private company with sales over $300 million.

Boyd received a bachelor’s degree from the University of Tennessee in industrial management in 1979 and a master’s in liberal studies from Oklahoma University in 1988.

Boyd also currently serves on the board of a number of organizations including the University of Tennessee College of Business Dean’s Advisory Council, the University of Tennessee Alumni Association, and Knox County’s Great Schools Partnership.  He also established the PetSafe Chair of Companion Animal Behavior within the Small Animal Clinical Sciences department of the College of Veterinary Medicine at the University of Tennessee.

He has received several awards including Ernst and Young’s Entrepreneur of the Year for the Southeast in 2008, Tennessee Business Magazine’s CEO of the Year in 2009, UT’s Entrepreneur of the Year in 2009, and was inducted into Junior Achievement’s East Tennessee Hall of Fame in 2008.

He and his wife, Jenny, have two sons.  Boyd begins his role in Nashville today, January 15.


Higher Education Governance: Not the Focus of the Haslam Administration This Year

After a series of discussions on higher education and workforce development with business and community leaders, elected officials, educators and administrators, the Haslam Administration announced yesterday evening that they will not be seeking legislation to alter the structure of higher education governance this year.

The Governor stated that his administration had nothing major in terms of legislation planned for public higher education institutions.  However, the Governor did state that he remains concerned about the rising student cost to attend college, and announced that his administration will continue to look for ways to help relieve the burden of that cost.  Expanding scholarship opportunities is one potential avenue the administration is considering.

Quoted by the Chattanooga Times Free Press, the Governor revealed some of the items up for discussion.  “We’re looking at everything from broadening the scholarship program we have now, tnAchieves, and helping people go to community colleges free or whether we can make better use of an online education program that might work for some people to continuing what Tennessee started with the Complete College Act.”

The Tennessee General Assembly convenes on January 8, 2013.  Check back for updates on the Governor’s higher education agenda as well other legislation that would impact the University of Tennessee System.