Opening Statement of Howard P. "Buck" McKeon
Chairman

Committee on Education and the Workforce
Subcommittee on 21^st Century Competitiveness

Hearing on “The College Cost Crisis Report: Are Institutions Accountable Enough to Students and Parents?”

September 23, 2003

    Good afternoon and thank you for joining us to discuss this important topic. We’re here today to continue our efforts to explore the issue of affordability in higher education, an issue I’ve been personally concerned about for quite some time.

    A few weeks ago Chairman Boehner and I released a report called "The College Cost Crisis," which declared that the nation's higher education system is in crisis as a result of exploding cost increases that threaten to put college out of reach for low and middle income students and families.  The report concluded that decades of cost increases, in both good economic times and bad, have caused America's higher education system to reach a crisis point. It also concluded that students and parents are losing patience with higher education "sticker shock" and that institutions of higher learning are not accountable enough to parents, students and taxpayers – the consumers of higher education.

    The report also found that the amount of information available to consumers about tuition increases is inadequate, inhibiting the ability of consumers to "comparison shop" and hold institutions accountable for tuition hikes and, while significant tuition increases are the norm, they are not unavoidable.

    This afternoon witnesses will testify perhaps about the findings in the report, but more importantly, I’m hoping to hear a discussion of the broad issue of affordability in higher education, as well as solutions on how best to address the problem. This is not a new problem. In fact, a decade ago when Congress was considering reauthorization of the Higher Education Act much as we are today, Senator Frank Lautenberg of New Jersey expressed concerns about the staggering growth of tuition over the past decade, and noted how the increases were outpacing the Consumer Price Index by two to three times. It sounds familiar, doesn't it?

    My concern over this issue is not new either, nor are my efforts to work toward solutions. That’s why, in 1997, I created the "National Commission on the Cost of Higher Education" to study the problems of increasing tuition and rising administrative costs and to make policy recommendations on how to hold down these increases.

    The following statistic is one I’ve repeated many times, and I will continue to repeat it until we can find a solution and interested parties start taking this issue seriously. The fact is, according to the Advisory Committee on Student Financial Assistance, cost factors prevent 48 percent of all college-qualified, low-income high-school graduates from attending a four-year college and 22 percent from pursuing any college at all. The statistics are similarly bleak for moderate income families. At the rate we are going, by the end of the decade, more than two million college-qualified students will miss out on the opportunity to go to college.

    Over the past year, my colleagues and I have been working hard to reauthorize the Higher Education Act. Since 1965, the Higher Education Act has made the dream of college a reality for millions of students, providing billions of dollars in financial assistance for students and families in need. We should all be proud of this accomplishment – after all, helping students reach their educational goals not only encourages success for the students, but it also provides great benefits to our society.

    Yet over the past few decades, the tens of billions of dollars we invest in higher education each year has begun to lose its tremendous power for expanding access to higher education. The cost of college has gone up rapidly, and our investment in federal student aid simply cannot keep pace. That is not to say that we aren’t doing our share – in fact, we’re pumping billions of dollars into student aid through grants, federally-backed loans, work-study opportunities, and numerous other financial aid programs. Over the ten year period ending in 2002, inflation was about 30 percent, yet federal student aid increased by 161 percent. We’re dramatically boosting federal support for higher education, yet we still cannot keep pace with tuition increases.

    The cost of higher education is daunting to many students and their families – even with grants and scholarships, the average student is graduating with about $16,000 in higher education debt. There are many causes for increases in the cost of higher education; I hope the witnesses today will help to explain some of those reasons. However, the fact is, the consumers of higher education – students and parents – are losing patience. Parents are scared that they may not be able to send their children to college. Students dread the day when their student loans will come due. And that frustration extends beyond simply the sticker price of tuition.

    As the price of college increases and their pocketbooks are squeezed, students are beginning to question how those tuition increases are being spent. Recently, a letter appeared in the student newspaper at the University of South Carolina that explained some of this frustration.

    There was a statement in that letter that particularly caught my attention which I would like to share with you. This student discussed the contrast between numerous new, state of the art facilities on campus available even though many students cannot even register for classes. She said this; "Attending a university is not about how nice the dining facilities are or having as many different chic eating places as possible; it is about learning and preparing for our careers. It is very disheartening when students’ educational needs are sacrificed for capitalistic modernity."

    I agree that there are likely many causes for the rapid increases in the cost of higher education, not the least of which over the past few years are the state budgets which have led in some cases to cuts in higher education funding. However, it paints an incomplete picture to blame state budgets alone. For months, and in fact years, I have been looking for answers to the question of why tuition has perpetually increased faster than students and families can afford to pay. Indeed, I hope witnesses can help us to understand what is causing the college cost crisis so that we may propose effective solutions.

    I believe that when a student believes her educational opportunities are being hindered by investments in the campus façade, and when institutions consider spending money and increasing tuition in order to increase their ranking rather than increase opportunities for their students, our higher education system is facing a very real problem.

    Earlier this year, I put forth a proposal to closely monitor tuition and fee increases by developing a college affordability index that will serve as a standard measure for institutions of higher education to measure increases in tuition and fees. This will also provide a tool by which students and families can understand those increases in relation to the Consumer Price Index (CPI). The proposal would also create College Affordability Demonstration Programs for those colleges and universities that want to try new innovative approaches to improving higher education while reining in skyrocketing cost increases.

   While the bill will soon be introduced, I want to be the first to make it clear that this bill is not about price controls. I have never supported such a thing and will never do so. What I do support is empowering the consumers of higher education by giving them the information they need to exercise freedom in the marketplace.

    Over the last few months, I have sat on the sidelines and have let various people degrade this proposal, choosing to wait until the bill is actually introduced before talking about the specifics. But no more. I will not sit idly by and listen to the detractors who want to continue the status quo, hoping that this issue will go away. We all can do a better job of making college more affordable and more accessible.

    We are working hard to revitalize our higher education system through the reauthorization of the Higher Education Act and ensure that every student who strives for postsecondary education has the opportunity to achieve it. As we work toward that goal, we will continue to seek solutions to the college cost crisis. I hope some of those solutions will come to light today. The future of our higher education system, and in fact the future of our nation, will depend on our ability to address this crisis and keep college within reach for students and families in America.

    With that, I would yield to my colleague, Mr. Kildee, for any opening statement that he might have.