September 13, 2012
Statement of Senator Harkin at the Senate HELP Committee Hearing:
“Improving College Affordability: A View from the States”
*As Prepared for Delivery*
“As the fall semester began in recent weeks, more than 21 million students enrolled or returned to college, whether on campus or on line. While this number sounds impressive, we were reminded again on Tuesday by the Organization for Economic Cooperation and Development that America continues to lag other advanced nations and now ranks 13th when it comes to younger adults with degrees. As we know all too well, one of the main reasons that America has fallen from the top spot is that college is becoming increasingly unaffordable for a growing number of Americans.
“During the August break, I heard repeatedly from students and parents across Iowa about the financial squeeze they’re facing from the spiraling cost of college and their anxiety about student loan debt. These are the real stories of financial hardship behind the statistics we have all heard over and over: how student debt crossed the $1 trillion mark, how average loan debt topped $25,000, and how public college tuition has tripled since the 1980s, outpacing both inflation and family income.
“America’s system of higher education is one of shared responsibility: students, families, states, and the federal government all take part in funding a college education. But in the past 30 years, we have witnessed a gradual and structural realignment of each partner’s share of the growing costs of college. States are contributing less while students and their families are shouldering a heavier burden, financed largely through the federal government’s financial aid programs.
“This cost shifting means that state and local support per student is lower today than 25 years ago, in constant dollars. States collectively spend $6.12 per $1,000 in personal income, down from $8.75 in 1990, though personal income increased by 66 percent over that period. Moreover, states’ spending on higher education as a share of their budgets is declining. States now spend an estimated 11.5 percent on higher education, down from 14 percent 20 years ago.
“This declining investment means that students have to pay more, as public institutions try to cover the state cuts through tuition hikes. Net tuition accounted for just 23 percent of educational revenues in 1986. Today, it has climbed to more than 43 percent. With tuition and fees at public, four-year colleges jumping by more than 70 percent and real median incomes declining by 7 percent over a decade, this means that rising tuition has forced more students to borrow and borrow more to pay their college bills. Given the fact that 70 percent of America’s college students attend public colleges and universities, the national implications of this state retrenchment for college access and success are obvious.
“And while states have increased their spending on financial aid – from $6 billion in 2000 to more than $9 billion last year – the rate of growth was less than one-third of the growth in federal aid. Also, much of this growth was in the form of merit aid, which does not help those students with the most financial need.
“For its part, the federal government has stepped up efforts to help students pay for college. But I think we all acknowledge that this model of shifting costs is neither sustainable nor desirable.
“To be fair, these trends mask significant efforts by some states – admittedly only a few – to increase investments in higher education. And it also obscures the fact that funding alone will not necessarily make possible what I hope is our shared goal: for each and every American to have access to high-quality postsecondary educational opportunities, regardless of one’s background. While funding is essential, smart policies are integral to maximize the impacts of such investments.
“As with the Committee’s previous hearings on college affordability, today’s hearing will focus on what is being done and how it can be replicated or adapted by others to keep the dream of higher education alive for students. The previous hearing emphasized promising strategies employed by innovative colleges and universities to curb costs while improving student outcomes. Today, we’ll shift our attention to states and their policies for improving affordability.
“We are fortunate to have a distinguished panel of guests. They will shed light on state efforts, policies and initiatives that hold promise for prioritizing and improving college affordability. And they will identify state barriers to innovation, efficiency and effectiveness at both the systems and institutional levels.
“States still have a primary role to play, whether it’s setting performance goals to get low-income students to and through college on time and providing institutions with financial incentives to attain them; redesigning their financial aid to target those most in need; establishing statewide articulation policies to facilitate seamless transitions among institutions for transfer students so they don't waste time and money, or promoting accelerated learning opportunities to get students through school faster and with cheaper. In particular, this Committee would benefit from hearing about state efforts that fit within a comprehensive framework for achieving state objectives and meeting state needs, supporting and complementing economic and workforce development plans, and recognizing human capital development opportunities caused by shifting demographics. We are also particularly interested in what Congress and the federal government can do to encourage and support state reform and innovation.
“There is much room for progress and improvement when it comes to our system of higher education, and it seems to me that a consensus is emerging from these very productive hearings on the need to break with business as usual. Increasing college affordability is going to take leadership. It’s going to take collaboration among all the stakeholders. And it’s going to take a real sense of urgency.
“I look forward to our continued work with our distinguished ranking member, Senator Enzi, and my colleagues on both sides of aisle to ensure that our higher education system remains affordable, accessible and results-oriented, both for students and taxpayers.”