Dr. Wayne Giles, Chancellor
Metropolitan Community Colleges On Behalf of the American Association of Community Colleges Supporting Document - Letter with Recommendations for HEA Changes
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February 28, 2003
Jeffrey R. Andrade
Deputy Assistant Secretary for Policy, Planning and Innovation
Office of Postsecondary Education1990 K St. N.W., Room 8046
Washington, DC 20006
Dear Deputy Assistant Secretary Andrade:
I write as President of the American Association of Community Colleges (AACC) concerning the Department's solicitation for input on amending and extending the Higher Education Act (HEA). As you know, AACC represents over 1,100 associate degree-granting, public and private regionally accredited institutions of higher education. For more than 100 years, community colleges have provided education and training as a means to foster both academic and personal development-providing opportunities for students to develop occupational and problem solving skills, to engage in community service and civic engagement, and to gain leadership experience-necessary to become economically independent and productive members of society.
Federal investment in student financial aid has been integral to the successful expansion of access to college, fostering increased economic productivity and numerous other social benefits. The reauthorization of the HEA presents an opportunity to expand upon our previous successes, as well as to address the needs of both an expected demographic boom and shortages in the highly skilled workforce. We look forward to working with you in the coming months and urge you to consider the following changes to current law as the Department develops its reauthorization proposals.
(a) How can we improve access and promote additional educational opportunity for all students, especially students within the framework of the HEA? How can the federal government encourage greater persistence and completion of students enrolled in postsecondary education?
For community college students, the most important action that the federal government can take to promote access is to provide sustained and substantial increases to the Pell Grant maximum. The Department itself has called attention to the lingering correlation between an individual's economic background and his or her propensity to attend college. And, not surprisingly, the least affluent students have a much more difficult time persisting in college than those who have greater resources. The Pell Grant program and other need-based Title IV student aid programs provide the most effective means of eliminating these disparities, because the availability of grant funding gives the neediest students the confidence and motivation to aspire toward a college education.
In addition, full funding of the Pell Grant program should help reduce the hours that students need to work while they are studying. Numerous studies have shown that when students devote a significant amount of time and energy to working, they reduce their enrollment status in college and are much less likely to persist to earn a degree.
We commend the Congress and the Administration for injecting increased resources into the program in recent years; they have helped thousands more students attend community colleges. Although the current Pell Grant shortfall has created severe fiscal tensions, the shortfall is also a testament to the program's effectiveness-that, at a time of severe economic distress, it can respond quickly and efficiently to the needs of hundreds of thousands of Americans.
AACC also supports (along with other major higher education organizations) establishment of a new program designed to facilitate articulation between institutions. The program should focus on low-income, first-generation college students, who tend to have the greatest hurdles to persisting in higher education. Creation of such a program would send a tangible signal to higher education that the federal government is interested in helping community colleges graduate their students and getting them into and through four-year institutions. This new program might also help dispel the impression that the federal government is simply interested in punishing institutions for what is perceived to be a lack of "accountability," without providing any assistance to colleges to achieve desired goals. This new program should be modest in scope, and include a strong dissemination component.
(b) How can existing HEA programs be changed and made to work more efficiently and effectively? In what ways do they need to be adapted or modified to respond to changes in postsecondary education that have occurred since 1998?
A number of suggestions for program improvement will be found in the following recommendations. Among its high priorities for reauthorization, however, AACC suggests two changes that reflect the changed world of higher education and that beg to be enacted as part of this reauthorization:
(1) Mandate the reporting of transfers-in to the institution at which a student last enrolled. Currently, an institution that prepares a student who subsequently enrolls at another institution has no guaranteed means of documenting that such transfer has occurred. In some cases, the college may be aware of the transfer, through state or other information-sharing systems, but just as often it may have no idea of its former student's educational course. This lack of tracking consistency should be eliminated, particularly as colleges are being asked to provide more information about institutional performance, and, more importantly, community colleges become key gateway institutions for the growing number of students, particularly minority students, who enter higher education through their doors.
Community colleges believe that transfers can be tracked without a concomitant loss of individual privacy; institutions have little interest in revealing the educational pathways of their individual students. Our partners in American higher education should feel an incumbent responsibility to provide the information necessary to promote the effective functioning of the overall system.
(2) Establish a process for the Secretarial review and waiver for Title IV-eligible institutions that are at or above the 50% limit of courses that may be offered via distance education. Distance education represents a monumental change in American higher education, and one overwhelmingly to the good. However, there remains a potential for institutions to abuse distance education program eligibility. Therefore, AACC recommends that both forms of the current "50% rule" be kept in place through the next reauthorization, and that ED be given the authority to waive this limit when appropriate. (At this time, we are not aware of any community colleges being at the 50% limit.) We also note that default-based measures used to assess institutional performance, such as those that have been proposed for lifting the 50% rule, are highly inappropriate metrics for community colleges.
(c) How can the HEA programs be changed to eliminate any unnecessary burdens on students, institutions, or the federal government, yet maintain accountability of federal funds? How can program requirements be simplified, particularly for students?
In approaching the accountability issue, AACC urges the Department to focus primarily on ensuring that program funds are spent as intended by Congress and the Department-i.e., on fiscal and fiduciary accountability for the expenditure of Title IV funds. Despite having made substantial progress in its administration of the student aid programs, the Department still does not do enough to work cooperatively with colleges to ensure that they can comply with the enormously large and complex web of student financial aid laws, regulations, and sub-regulatory guidance. The Department should always be conscious of ensuring that any changes to existing policies are clearly and expeditiously communicated to campuses.
Despite the fundamental importance of federal student aid, such funds received by community college students represent only a small portion of overall community college revenues. Tuition averages 19% of total revenues at community colleges, and student financial aid covers only a minority of those costs, less than one-third. This small percentage stands in stark contrast to the 40% of overall revenues provided by states, and the 16% provided by local governments. These latter sponsors therefore have a greater interest, not to mention a more immediate relationship, with our institutions; the federal government should be acutely sensitive to this fact as it considers new measures in the accountability area. A uniform, "top-down" accountability regime may do little or nothing to improve the operation of our colleges, but much to drain further resources away from where they are most needed-and where other, more financially-invested sponsors would direct them.
The HEA programs would be improved if provisions not intrinsically related to Title IV were eliminated from the statute. This includes the Selective Service and drug convictions provisions. Any objective cost-benefit analysis of these provisions would find them lacking in adequate justification. In addition, the Equity in Athletic Disclosures Act provisions need further review. These have created significant new administrative responsibilities for our campuses.
(d) How can we best prioritize the use of funds provided for postsecondary education and the benefits provided under the HEA programs? How can the significant levels of federal funding already provided for the HEA programs best help to further the goals of improving educational quality, expanding access, and ensuring affordability?
AACC's primary, although by no means exclusive, interest in the student financial aid system remains the Pell Grant program. The Pell Grant program is extremely well-targeted and not in need of fundamental reorientation. However, a review of the need analysis statute should be undertaken. In this context, AACC urges a particular focus on single, independent students, which our campuses indicate may need greater assistance relative to other populations. AACC also is exploring how best to utilize the student aid framework to ensure that older, working students enroll and persist in higher education programs--whether because of the need analysis system or the effect that Title IV program eligibility rules have on the programs in which these students tend to enroll. We may shortly have further recommendations in this area.
Fortunately, community college students are not heavily reliant on loans to finance their educations, but the loan programs are increasingly important to them. AACC believes that the time has come for Congress, the Administration, and the higher education community to work jointly to determine whether the existing terms and conditions for borrowers carry subsidies that optimize equity and bring the most "bang for the buck." AACC believes that special focus should be made to ensure subsidies are directed to recent graduates, particularly those with the lowest incomes and most onerous loan debt, so that they have the means necessary to repay their student loans. Clearly, subsidies should be directed toward making capital accessible to those who need it and then facilitating the resultant indebtedness. If these two goals are squarely in focus the student loan system could be enhanced.
The growing amount of merit aid being awarded to students also concerns AACC. Over the past two decades state funded grant aid has become an increasingly important source of financial aid. According to the College Board, between 1980-81 and 1999-2000, state-sponsored grants to undergraduate students increased at more than twice the rate of federal Pell and Supplemental Educational Opportunity Grants. During the same period, increasing numbers of states began to redirect funds from need-based to merit-based programs. A recent report by the Civil Rights Project found that states set aside one-quarter of all student aid funds for merit scholarships, compared to 11% in 1991.
The growing tendency of states to focus their resources on merit-based aid represents a significant policy change, and one that is counter to the primary federal goal of ensuring access to a higher education for all individuals, regardless of their income. While merit aid programs may claim to promote access as a goal, studies have shown that state merit scholarships are being awarded disproportionately to populations of students who historically, and today, have the highest college participation rates.
The HEA was designed to ensure access to a college education for all Americans, as a means to achieve economic prosperity and numerous other social benefits. Need-based aid and Pell Grants in particular have been instrumental in achieving this goal. Studies have shown that Pell Grants have successfully helped to increase college enrollments by 20 to 40% among low-income students, and 10 to 20% overall.
The rise of merit-based aid has skewed the original intent of higher education policy to provide publicly funded need-based aid to students. Increasingly, merit-based aid is displacing need-based aid as the primary funding source for a college education. As states grapple with budget crises, increasing enrollments and growing workforce demands, it is imperative that both states and the federal government re-focus their higher education policy on expanding access to all Americans, not just a select few.
(e) Are there innovative and creative ways the federal government can integrate tax credits, deductions, and tax-free savings incentives with the federal student aid programs in the HEA to improve access to and choice in postsecondary education?
The Federal government should do more to integrate the I.R.S. Code with student aid programs. Specifically, it should ensure that, wherever possible, tax provisions share a core principle with the Title IV programs-that they be targeted to students and families on the basis of need. For example, the current tuition tax deduction now benefits those with incomes as high as $160,000. Despite the laudable goal of providing greater choice in higher education, it is hard to justify such a benefit when students with much greater need are denied them.
A top AACC priority is making limited reforms to the Hope Scholarship tax credit. AACC hopes that the Department will embrace these efforts, which are embodied in H.R. 442, introduced by Rep. Dave Camp. This legislation would add books, fees, supplies and equipment to the Hope eligibility; and it would eliminate the subtraction of Pell Grant and SEOG funds received from the initial calculation of Hope eligibility. The effect of these changes would be to drive Hope eligibility down the income scale, thereby providing better greater equity in the program.
(f) What results should be measured in each HEA program to determine the effectiveness of that program?
It is not possible to detail in this context the results that should be measured in each HEA program. However, common sense suggests that before a program's "effectiveness" can be gauged, its purposes and goals must be determined, and, hopefully, agreed upon by the affected community. Therefore, AACC urges that when any Program Assessment Rating Tool (PART)-driven or other evaluations--particularly those with budget implications--are undertaken by the Executive Branch, stakeholders be given an opportunity to provide meaningful input on the design and basic assumptions informing the review. It the Administration arrogates to itself the determination of a program's goals, it will undermine the credibility of any results generated by its program assessments. For community colleges, this has already occurred in regard to the Carl D. Perkins Vocational and Technical Education Act.
Below are specific AACC recommendations for legislative changes to the HEA:
General Institutional Requirements
(1) In Section 485(a)(3), a requirement should be added such that when an institution enrolls a credit student that it knows has attended another institution of higher education within the last five years, it should be required to so notify the last institution that the student attended.
(2) In an effort to respond to growing calls for greater accountability, community colleges are willing to provide greater information about their institutional performance, since transparency-and its concomitant, competition-is the essence of accountability. However, the information provided should be specific to community colleges, and derive from information that in large part is currently being provided by colleges--whether to states, localities or the federal government. (Section 485(a)(3)).
Teacher Preparation, Recruitment, and Development
(1) A new section should be added to Title II of the HEA establishing a competitive national grant program for community colleges, with flexible funding authority for the ED Secretary. The program would have a $20 million authorization ceiling in FY 2005. Eligible activities would include the following community college programs providing: the first two years of teacher training, with an emphasis on articulation into BA programs; post-baccalaureate certification education and training; professional development for current K-12 teachers; motivation for high school students to become engaged in teaching careers; scholarships and/or stipends for needy students not adequately funded through other sources; and, enabling community colleges to help meet the requirements contained in the "No Child Left Behind" statute for the increased training of paraprofessionals.
Aid for Students - Outreach and Support
(1) Amend Section 419N(b(2)(A) of the Child Care Access Means Parents in Schools Program to allow institutions to receive grants equaling 5% of their Pell Grant expenditures. This is a fair ceiling that will allow small institutions to qualify for funds while ensuring that grants are distributed broadly.
Aid to Institutions
(1) AACC strongly supports extension of the Strengthening Institutions program authorized by Title III-A. We do not advocate changes to this program. Title III-A does not serve a student population that is as easily, or immediately, identifiable, as those served by other institutional grant aid programs, but its funds help colleges, and students, that have similar educational and economic hurdles to overcome. Title IIII-A has had a transformative impact at scores of community college campuses. We urge ED to keep this in mind as it devises its reauthorization and budget policies.Aid for Students-Grants and Work1) Repeal the requirement in Section 401(b)(3)(a) that delineates the "tuition sensitivity" provisions and lowers the Pell Grant maximum for students attending low-cost institutions. The Pell Grant should be a true voucher whose full benefits can be applied to any institution, whatever its charges.
(2) Clarify that students attending an institution that provides a process determining their need for supportive services and provides services such as orientation, counseling, and tutoring to support their academic success, are not required to pass a federally-prescribed test to demonstrate their ability to benefit in order to receive Title IV student aid. (Section 484(d)).
(3) Alter the "Return of Title IV Provisions" so that extremely disadvantaged students who receive grant funds (particularly those who receive only grants) and withdraw during a period of enrollment are not required to return substantial portions of those funds (Section 484B). AACC is supporting the recommendations of the National Association of Student Financial Aid Administrators. These encompass administrative aspects of the statute as well as policies relating to the amount to be returned.
(4) Eliminate the link between loss of institutional loan eligibility due to high default rates and that for the Pell Grant program. (Section 401(j)). The loss of institutional Pell Grant eligibility is so severe that it should be not tied to default rates, which are an ineffective proxy for quality, especially at community colleges where the incidence of borrowing is low. The Department's own data show that the overwhelming majority of institutions that withdrew from the Title IV programs because of high default rates did so before 1998, when Pell Grant eligibility was tied to that for the loan programs.
Aid for Students - Loans
(1) Give institutions the authority to reduce loan amounts for broad categories of students, such as first-time students, so long as such actions are not made on the basis of prohibited categories such as race, sex, religion, and disability. The current case-by-case standard cannot be applied effectively on most campuses. Community colleges can be relied upon not to threaten student access, which is their first tenet, while also encouraging responsible borrowing (Section 479A(c)).
(2) AACC does not currently support increases in annual or aggregate loan maximums. For the overwhelming majority of community college students, the maximums are not needed; inappropriate borrowing remains a major threat for many students. A variety of sanctions attached to high institutional default rate also creates problems for community colleges, and these have driven many institutions out of the loan programs altogether.
We thank you for your attention to these views. Please do not hesitate to contact me or David Baime, Vice President for Government Relations, if you have any questions or comments about them.
George R. Boggs
President and CEO