Prepared Testimony of Kati Haycock, CEO, The Education Trust, for U.S. House of Representatives, Committee on Education and the Workforce Forum on Higher Education Act Reauthorization

United States House of Representatives

Committee on Education and the Workforce

Forum on Higher Education Act Reauthorization

March 2, 2016

Prepared Testimony of

Kati Haycock, CEO, The Education Trust

Ranking Member Scott and other members of the House Committee on Education and the Workforce, thank you for the opportunity to address the importance of making sure low-income students and students of color are the top priority in reauthorization of the Higher Education Act.

Last year, this Committee played an integral role in reauthorization of ESEA. Without the Ranking Member’s leadership, along with the Members here in this room, accountability for the achievement of all groups of students would not have been part of the bill that became law in December, and resources meant for the poorest children might have been spent elsewhere. As you turn to the reauthorization of HEA, we hope you will keep those same students in mind—assuring that precious resources are spent on the students who need them most and that results for all students must matter.

The stakes for students and our country are high. Rising inequality and falling mobility threaten the very core of who we are as Americans—our belief that we are the land of opportunity. The rungs on the ladder upward in America have grown further and further apart. Without a postsecondary credential, almost nobody can climb that ladder anymore: 45 percent of those born poor will remain poor as adults, and nearly 70 percent will be either poor or near poor. With a college degree, this rate drops to 16 percent poor.

What those numbers say to us is simple: that, both for their sakes and for our collective sake, we need to make sure that more young people from low-income families get to college and that more graduate.

Since the original Higher Education Act was passed in 1965, we have made a lot of progress on the access side. College-going rates have climbed both for students in general and for students from all economic and racial groups.

But despite this progress, low-income students today enroll in postsecondary education at rates lower than high-income students did in the mid-1970s. And the low-income students and students of color who do enroll in college are far less likely than other students to enroll in institutions where most students graduate and far more likely to enroll in the institutions that graduate few of their students and create disproportionate debt.

Add up all the numbers, and what you end up with is very different rates of degree acquisition for different groups of young Americans:

• For every 100 white kindergartners, 90 graduate from high school and roughly 40 end up with a bachelor’s degree. African-American bachelor attainment rates are roughly one-half those of white students, those for Latinos are roughly one-third.

• Students from high-income families are roughly three times as likely as students from low-income families to obtain a bachelor’s degree eight years after leaving high school. While 54 percent of young people from the highest income quartile earn a bachelor’s degree, only 17 percent of young people from the bottom income quartile do the same.

This is a problem. College graduates earn more. They are less likely to be unemployed. But they also stand out in other things that we value. They are more likely to vote. More likely to volunteer. And more likely to maintain good health.

But even for those who don’t spend a lot of time worrying about democratic participation or social cohesion, we should all worry about these numbers given which demographic groups are growing and which are not. Already there has been huge growth among the groups we in higher education have long called “underrepresented minorities.” But there is even more change to come. By 2050, the population of Latino youth is expected to grow 137 percent (an increase of 31.3 million), Asians by 96 percent (4.4 million), and African Americans by 15 percent (2.3 million). Meanwhile, the population of white youths is expected to shrink by 9.0 percent (5.5 million). Together with low-income whites, these “underrepresented minorities” already comprise a majority of our young people. As they go, so goes our country.

So what’s behind these patterns—and, more important, what can we do about them?

Certainly, inadequate preparation is part of the problem. Though we have made some progress on this matter in recent years, low-income students and students of color are less likely to emerge from their often underfunded and otherwise substandard schools with the skills they need to succeed in credit- bearing work. We think you have made a start on this in ESSA by focusing accountability on college- and career-ready standards.

The rapid escalation in the cost of going to college—increases that far outpace the growth in family income, especially among families at the bottom of the economic ladder—is also wreaking havoc on low-income families. Declining state support for higher education is partly responsible—per-student spending has declined 24 percent since 1989, making students pick up more of the costs once largely covered by states. But so, too, are shifts in federal and state spending on student aid, with dollars going up, but smaller and smaller fractions of those dollars being spent on the students who need them the most.

It’s not just poor K-12 preparation and changing priorities among state and federal policymakers, though: Institutional choices play a role here, too—both in who comes to college and who graduates.  And sadly, many institutional leaders are choosing to shift resources away from low-income students too.

So, much as you sought to do with ESSA, you will want to address both sides of the equation in HEA:  getting resources to the students who most need them and insisting on improved results for all groups of students.

First, resources.

Our approach to financing higher education is, to put it bluntly, insane. In Germany, students pay a few hundred Euros a year for college; in France and Sweden, they pay roughly the same. Indeed, in much of the world, the policies are much like ours used to be: Each generation of adults helps to support, through public finance, the postsecondary education of the next. That is what nation-building actually looks like.

But here, things have gone in a very different direction, with students asked to shoulder most of the rapidly escalating cost of college—mostly by taking on debt. Borrowers from the class of 2013 owed an average of $28,400, and total student debt is $1.3 trillion. For low-income families, the burden is particularly heavy: Even after grant aid from all sources is included, they must find a way to finance an equivalent to 76 percent of their family income, while the highest income students have to devote only 17 percent of their family income to pay for college. And increasingly, the trend toward student loan debt re-enforces class and racial biases. Students of color with debt drop out at higher rates than their white peers. And graduates of color borrow more to receive their degree, even at public institutions.

In HEA, there are two things you can do.

First and foremost, you can protect and expand your investment in Pell Grants, the cornerstone of federal financial aid in higher education. The Pell Grant once covered about three-quarters of the cost of attendance at a four-year college. Tuition increases have eroded the purchasing power of Pell, and today it covers only about one-third of public tuition and fees. This erosion in purchasing power makes college more costly for the nearly 9 million students who receive Pell each year, including nearly half of all Hispanic undergraduate students and more than 60 percent of African American students. On behalf of low-income students and students of color, we ask you to do everything you can to shore up this vital program.

But you and I both know that even generous increases wouldn’t keep up with the fast-growing cost of postsecondary education. And unless those increases can be slowed, you will always be behind the curve with Pell. Your clearest leverage to slow the increases would be to concentrate on reversing the decline in state support for public higher education. We think you can do that through a renewed partnership with states, using resources from non-Pell programs while also protecting subsidized loans to incentivize state investment. The Education Trust will be working with partners to suggest a framework for such a partnership.

But, just as in ESSA, it can’t be just about resources: Colleges need to be accountable for improving results, especially among their low-income students and students of color.

That begins with better data.

Before disaggregation of data was required in K-12, we knew anecdotally that schools were not educating all groups of students well. But we did not know just how significant the inequities were, and we didn’t know which schools were making progress and which weren’t.

That, unfortunately, is where we still are in higher education—especially as regards low-income students. We have some limited research on, for example, overall Pell graduation rates, but we don’t know which institutions are serving these students well and which aren’t: Pell data aren’t included in annual IPEDS data collections. IPEDS also doesn’t include data on part-time students or students who don’t start in the fall or students who transfer in from another college.

Yet if we have learned anything from past experience, it is this: that students who aren’t measured don’t count. If you want these students to count, and I know you do, you need to make the same shift you have made in K-12 to demanding better data. There are a range of ways to do this—from an expanded IPEDS collection to a fuller unit record system. Both are viable. What is important is not how the data are collected, but that they be collected and publicly reported.

You know, though, that public reporting—while essential—usually isn’t sufficient to get the improvements that we need. Institutions need to be accountable for their results.

So far, the conversation about accountability in HEA has mostly centered around so-called “risk-sharing.” Certainly, we understand the thinking behind those proposals, and we are digging into the details of each to understand their implications for low-income students and the institutions that serve concentrations of such students. And we will come back to you with what we learn.

But we want to make our worries clear up front: that the risk-sharing approach will almost inevitably make low-income students even less attractive to colleges and universities than they already are—disincentivizing wealthier institutions that are already doing too little to advance opportunity in America, and causing the burden to fall far more heavily on the least well-financed institutions—the very institutions whose missions focus on graduating this population of students.

So when we come back to you, we may propose an alternative approach—one that will put the progress of low-income students and students of color at the heart of institutional accountability.

Our research and what we have learned from fast-improving colleges and universities show that institutions matter. Take, for example, the University of Alabama and Michigan State University. Both are nationally known, fairly selective public research institutions with large student populations. But Michigan State has a 72 percent graduation rate for Pell students, compared with 52 percent at the University of Alabama. Similarly, institutions that choose to focus on closing gaps in graduation rates between white students and underrepresented minorities can actually do so. At The Ohio State University, graduation rates for underrepresented minorities have gone up 25.2 percentage points over the last 10 years, closing the gap between graduation rates for white and underrepresented minorities by 8.2 percentage points.

This year, Congress will invest over $31 billion in Pell Grants and more than $180 billion in funding for higher education. Federal lawmakers have a responsibility—and taxpayers have a right—to expect results for this investment. As a nation, our global competitiveness and sustained economic growth depend on getting the best possible student outcomes for this investment. Individually, the students whose futures depend on completing college deserve the opportunity to realize their aspirations and move out of poverty. In short, students deserve a fair shot at the American dream. To make that dream real for students and for the nation, higher education must be affordable for low-income students and students of color, comprehensive data on student outcomes must be available and accessible, and institutions must be accountable for student outcomes.

All of us at The Education Trust look forward to working with you on HEA to help secure our future and help low-income students and students of color realize their dreams.