Testimony of Dr. John Brockman
President, Coastal Bend College
Beeville, Texas

Federal Student Loan Program

Coastal Bend College (CBC) is a Hispanic Serving Institution (58%) with its main campus in Beeville, Texas, and with three satellite operations in Pleasanton, Alice, and Kingsville. CBC serves all or part of nine counties. The population is majority Hispanic. All of these counties have populations with per capita incomes and median family incomes that are below average for Texas and for the United States.

CBC dropped out of the federal student loan program in 1989 because an increasing default rate placed all of our federal funding in jeopardy. Community colleges such as CBC offer a variety of programs from cosmetology and child development to fuel cell and nanotechnology. Most of our programs lead to well paying jobs, but some lead to very important jobs, child care workers for example, that don’t pay so well. When CBC was in the loan program, all students were eligible for student loans no matter what program they entered and with no questions asked. The college had no say in who received loans. So, out of the number of the students who took out loans, some of them would enroll in programs that would lead to jobs with less than desirable pay. Apartment rent, car payments, utilities, food costs could consume all of their paychecks with nothing left for student loan payments. Because of the increasing default rate, the Department of Education began to send a series of letters that appeared to threaten all of our Title IV funds. We elected to drop out of the program in order to protect our Title IV funding. (I understand that colleges now can have some say in who is eligible for a loan and who is not, but I also understand that denying a student a loan is difficult. I also understand that today the lending institutions are more diligent in servicing loans that are in default. In other words, there have been some changes in the way the loan program is administered.)

A quick and easy solution to our problem with the student loan program would be to provide HSIs with the same default rate protection afforded to Historically Black Colleges and Universities (HBCUs). Another solution might be to drop the default rate penalty altogether and hold the students accountable rather than the colleges or universities. An alternate solution might be to restrict federal student loans to students enrolling in certain designated programs. There are multiple federal grants and programs that single out certain programs or majors for scholarships, namely mathematics, science and engineering. Now students planning to teach school are eligible for a number of different kinds of scholarships offered through various federal grants. Perhaps community colleges should have the flexibility to designate certain programs as being loan eligible.

I know the loan issue is complicated by proprietary schools, community colleges, and private and public universities and the desire to make one set of rules fit all. Perhaps it would be better to make different rules for different types of higher education institutions.

Title V and HSIs.

The set aside for HSIs, first under Title III and now under Title V, has been a great benefit for CBC. We have used the money well to improve our college and to increase access to higher education in South Texas. As more and more colleges become designated as HSIs it is necessary to increase the funding for Title V or the impact on HSIs will be diminished. The current proposal for an increase from $93.4 million to $94.4 million would, in practical terms mean a decrease in funding due to the increasing numbers of HSIs.

At the same time, I would like to point out that all HSIs are not alike in terms of financial resources (and I’m sure this is also true for HBCUs). As a group HSIs receive less than one-half of the federal funding per student on average compared to all other groups of degree-granting institutions. But among the HSIs, there are some colleges and universities that are well funded and others that are not. While "adequate funding," is in the eye of the beholder, it can be substantiated empirically by spending per FTEs. I want to give you two examples of community colleges in Texas---College A and College B, equal in size, equal in FTEs. College A has expenditures of $30,000,000, while college B has less than $15,000,000 to spend. College A has a grant writing office and it sends several people to grant writing workshops every year. College B does not even have a full-time grant writer and no money for workshops. Both colleges submit grants. Which college’s proposal is more likely to be funded?

Pell Grants, student loans, and most other federal student aid programs are "need based." Shouldn’t federal grants such as Title V grants to colleges and universities also be need based?

Federal Mandates

Texas community colleges have three main sources of income: state appropriation, local tax levies, and tuition and fees. (Most of our students in South Texas depend on Pell Grants for their tuition payments.) As the level of state support declines, local taxes and tuition must increase. The community colleges along the Rio Grande, in South and Southwest Texas, serve students who live in counties where the per capita income and median family income are the lowest in Texas. Yet the rates of tuition and fees in this same area of Texas are, on average, the highest in Texas for community college students. While the opposite should be true, it is fairly easy to explain why this is so. Where per capita income is the lowest, home values are also the lowest. As a result local tax levies are small. CBC raised its tax rate 43% last month and we are still near the bottom in local taxes per FTE.

When CBC dropped out of the federal student loan program, we consoled ourselves and our students by saying that our tuition and fees were very low. Our students could afford to go to CBC without student loans, we thought in 1989. Since 1989 our tuition has increased at least 435%. It is a lot more difficult to say that our students can get along without student loans today. While CBC has raised tuition 435% and recently raised local tax rates by 43%, we are still very near the bottom of the state in expenditures per student.

Spending per student among Texas community colleges varies obscenely and as a result the poorest students pay the highest rates of tuition. When I point this out, I am told, "so what, higher education is not a right, it’s a privilege." There is no state or federal mandate for equality of opportunity among community college students. In other words, an obscene variation in spending per community college student is constitutional. Does that make it right? This committee can change this. Mandate that the total of state and local tax spending per FTE in public community colleges must be substantially equal, state by state, to qualify for Title IV funds.

New Programs and Buildings for HSIs and Rural Colleges

Rural HSI colleges with limited tax bases have a difficult time starting new programs and almost no chance to initiate higher tech or health related programs. Nor do rural colleges have funds for building buildings to house new programs. Is it any wonder that rural areas of Texas (and the nation) continue to decline economically and in population. Texas community colleges often have to eat start-up cost for a year or two before any state funding kicks in. In Texas, maintenance and utilities are the responsibility of local taxpayers or students. If a community college has a limited tax base, then a heavier burden falls on students, as I have shown. If a community college has a limited tax base, it is out of luck with regard to start-up funds or new buildings. When the state of Texas, in response to a MALDEF suit concerning unequal higher education opportunities, initiated what became known as the South Texas Initiative, hundreds of millions of dollars were spent on new buildings and new programs at South Texas universities, but not a penny on new buildings or new programs at Texas community colleges because at community colleges buildings are a local responsibility.

I believe that there is a move to create a set aside for rural colleges similar to what has been established for HSIs and Tribal Colleges and for HBCUs. I support this effort. I have seen wonderful new buildings at community colleges in Eastern Kentucky that were built with federal dollars. I think these came through "earmarks" as opposed to grants so there was no RFP or anything like that. I would like the opportunity to apply for federal funds to build buildings and to start new high tech or allied health programs to support the economic development of my area of South Texas. I would not object should this new set aside be need based.

Thank You.