Hearing of the Senate Health, Education, Labor, and Pensions Committee - Reauthorizing the Higher Education Act: Exploring Institutional Risk-sharing

Hearing

"Thank you, Mr. Chairman. And thank you to our witnesses for being here today.

"Clearing pathways for more Americans to attend and succeed both in college and beyond is, of course, important for students. But it is also a critical part of building an economy that works for all families, not just the wealthiest few.

"A highly educated workforce is good for our country. It strengthens the middle class, and it strengthens the workforce we'll need to compete in the 21st century global economy. So we should work on ways to help more students earn their degree and gain a foothold into the middle class.

"Each year, federal taxpayers invest $150 billion in our higher education system. So I welcome this hearing as a way to talk about holding institutions of higher education more accountable to ensure students and taxpayers get a good return on their investment.

"The crushing burden of student debt is going to be a major focus for me in our conversations on reauthorizing the Higher Education Act. When it comes to students who rely on loans to afford the rising cost of college, we have a lopsided accountability system.

"Right now, colleges and universities receive the upfront benefit of money provided by those federal student loans. But students and taxpayers are the ones who bear nearly all of the risk and the consequences of default, regardless of whether the college or university served students well or kept their debt levels affordable.

"We've seen cases recently where some institutions have a pattern of frequent student defaults, or of pushing students toward short-term solutions like deferment or forbearance, where their debt continues to balloon. Yet the institution itself bears little responsibility for their students' outcomes.

"So I am open to hearing more about options like risk-sharing to ensure colleges and universities have a stake in their students' success, debt levels, financial literacy, and ability to repay.

"Of course, there are key protections that need to be in place. For example, we should recognize that risk-sharing could lead some institutions to become more exclusive to reduce their risk. So any proposal would have to be carefully crafted to avoid unintended consequences, and should reward institutions that remain accessible and affordable.

"And any risk-sharing proposal that comes before this committee should not be a way to roll back other accountability measures. We should continue to hold schools accountable for career education programs that can leave students with worthless credentials or with debt they cannot repay.

"We should continue to target our existing accountability requirements toward colleges that have unacceptably high default rates and students leaving with high loan debt.

"And we should close loopholes to rules that are supposed to prevent colleges from receiving more than 90 percent of their income from the federal government.

"Quality programs and institutions should always have students or employers willing to invest in them. In fact, accountability is also an important component of some of the broad themes that I'm going to be very focused on in our discussion of reauthorizing the Higher Education Act.

"For example, all students should have access to a safe learning environment. So I hope this Committee will focus on making sure colleges and universities are doing their part to prevent sexual violence, assault, and bullying on campus. Sexual assault turns students' lives upside down and we must do more to stop this crisis and prevent it at our nation's schools. This is going to be a top priority for families and students across the country, and for me.

"We need to make college more affordable. This is first on the minds of students and families. And, as I have already mentioned, I believe the federal government has a role to play in holding states accountable for maintaining investments in higher education.

"More students -- from all walks of life -- should have strong, clear pathways into and through higher education. So as students and families shop for college, they should have access to key information on the academic quality, affordability, and outcomes of the colleges and universities they are interested in.

"Students across the country today are working hard. They are investing in higher education, so they can have a solid place in the middle class. We need to make sure we protect those students and protect the integrity of the federal taxpayer dollar with strong accountability.

"I'm looking forward to hearing ideas and feedback from our panels of witnesses today. Thank you."

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