Council on Undergraduate Research

Senate HELP Committee Hearing on Recalibrating Regulation of Colleges and Universities

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HEARING BRIEF 

Senate Help Committee Hearing on Recalibrating Regulation of Colleges and Universities

 
Prepared by:
 
Washington Partners (wpllc@cur.org)
 
 
February 24, 2015
 

On Tuesday, February 24, the Senate Committee on Health, Education, Labor and Pensions (HELP) held a hearing, “Recalibrating Regulation of Colleges and Universities: A Report From The Task Force on Government Regulation of Higher Education.”  It was the first hearing of this Congress on the reauthorization of the Higher Education Act and focused on the final report from the Task Force on Government Regulation of Higher Education.  The Task Force was appointed in 2014 by Sens. Lamar Alexander (R-TN), Barbara Mikulski (D-MD), Richard Burr (R-NC), and Michael Bennet (D-CO).    

Members Present

Chairman Lamar Alexander (R-TN); Ranking Member Patty Murray (D-WA); Sens. Richard Burr (R-NC); Barbara Mikulski (D-MD); Michael Bennet (D-CO); and Elizabeth Warren (D-MA).

Witnesses

  • Dr. William E. “Brit” Kirwan, Chancellor, University System of Maryland, Adelphi, MD
  • Mr. Nicholas S. Zeppos, Chancellor, Vanderbilt University, Nashville, TN

Opening Statements

Chairman Alexander began the hearing by providing examples of consequences of excessive federal rules and regulations on institutes of higher education.  First, Alexander pointed to Vanderbilt University’s analysis of its cost of federal regulatory compliance, which amounted to $150 million, or 11 percent of the university’s total non-clinical expenditures last year.  He mentioned that this adds about $11,000 in additional tuition per year for each of the university’s students.  The chairman then held up for the audience the 108-question FAFSA form, saying the form is far too cumbersome and complicated.  He promoted his newly introduced legislation that simplifies the student aid application and repayment process and reduces the FAFSA to just two questions.  Finally, Alexander pointed to a survey by the National Academy of Sciences that found investigators spend 42 percent of their time associated with federal research projects on administrative tasks rather than research.  Alexander asked, “How many billions could we save if we reduced the administrative burden?”  He said, “These examples and others like them,

represent sloppy, inefficient governing that wastes money, hurts students, discourages productivity and impedes research.”  

Calling these examples of waste an embarrassment to the federal government, Alexander then called for Congress and the Department of Education to “weed the garden” of excessive regulations.  He stated, “The Higher Education Act totals nearly 1,000 pages; there are over 1,000 pages in the official Code of Federal Regulations devoted to higher education; and on average every workday the Department of Education issues one new sub-regulatory guidance directive or clarification.”

After painting a picture of the complicated regulatory atmosphere, the chairman introduced the purpose of the hearing, which was to discuss the report commissioned by a bipartisan group of senators to examine the current state of federal rules and regulations for colleges and universities and offer specific solutions.  The report outlines 59 regulations, requirements, and areas for Congress and the Department of Education to consider modifying or eliminating, listing 10 especially problematic regulations.  Alexander said that he and Senator Murray will discuss how to develop a bipartisan process to take advantage of the recommendations in the report and use them as a basis for reauthorization of the Higher Education Act.

Ranking Member Murray in her opening statement stressed the importance of higher education in helping families gain a foothold in the middle class.  She expressed an understanding of the need to ensure colleges and universities can work more efficiently and effectively, and she signaled that she was open to working with Republicans to improve the rulemaking process, but that such reforms should not remove protection for students and faculty.  She stated, “We should also be improving our current protections.  Right now, families and students aren’t able to access the basic-but essential- consumer information on their college or university, like useful graduation and transfer rates, average student debt, or expected earnings.”  She added that she was glad to see the report focus on the need to improve the federal data systems and that “Colleges and universities should be accountable for high-quality outcomes that don’t leave students with debt they struggle to repay.”

Witness Statements

Kirwan began his testimony by asserting the task force understands and supports the important role that federal regulations play.  He said those within the higher education community recognize and embrace their “obligation to be transparent, responsible, and accountable stewards of taxpayer money.”  He said the report found that the federal government layered on regulations and requirements year after year, resulting in a “jungle of red tape” that got in the way of institutions’ ability to serve students and students’ access to education.  The costs associated with compliance are one of the factors driving rising tuitions, he said.

He outlined a few of the report’s recommendations to address 10 specific regulations that the task force found particularly problematic.  First, the report recommends the federal government revise the FAFSA so that applicants are allowed to submit tax information from two years prior rather than the previous year.  Second, he criticized the recent federal regulation requiring institutions offering online courses to obtain authorization to provide education from every state in which a student resides.  The report suggests that Congress should return to the long-term practice of only requiring authorization from the state where the institution is based and not where students reside.  Finally, he urged that the federal government revisit regulations relating to the return of Title IV funds if students leave an institution before completing a term of study.  He argued that it is difficult to determine how much to return since records are not always clear as many students fail to formally withdraw.

Zeppos: The chancellor of Vanderbilt University opened his remarks by emphasizing that the purpose of his and his colleague’s testimony was not to ask for deregulation, but rather for smarter regulation.  He highlighted the findings of the analysis of the cost of federal regulatory compliance at his university that Senator Alexander mentioned in his opening remarks, stating that $146 million was spent annually on federal compliance. He explained that of this amount, $14 million was spent on compliance with higher education related regulations such as accreditation and federal financial aid.  The rest of the $132 million goes towards compliance with rules related to federal research contracts. 

He mentioned that since Vanderbilt is a larger institution, they are able to spread the costs across the university, but regulatory costs impact smaller institutions even more heavily.  He argued that simply revising regulations is not the solution, but that change is needed in how the Department creates, implements, and enforces regulations in each phase of the regulatory process.  For example, the report suggests that the negotiated rulemaking process should be reformed to ensure it achieves its purpose and that unrelated issues should not be bundled together. He added that the Department should provide clear regulatory safe harbors to help institutions that abide by certain standards meet their compliance obligations.  He said the Department should produce the annual compliance calendar Congress required in 2008 legislation, there should be a statute of limitations for enforcement of Department regulations, and Congress should consider developing and implementing “risk-informed” regulatory approaches where appropriate.

Member Questions

Chairman Alexander commenced the question and answer session by asking Kirwan how to make this a continuing conversation and if he would meet with Secretary Duncan to talk about the recommendations that the Department can take care on its own.  After Kirwan responded that he and his colleague would be enthusiastic to do so, the Chairman followed by questioning how many of the 59 recommendations in the report the Department could address without congressional action.  Kirwan responded that about 12 of the recommendations would likely not need congressional approval.  

Alexander then shifted his attention to the cost of regulatory compliance on research and asked Zeppos to verify that one quarter of all research dollars Vanderbilt receives from federal grants goes towards keeping up with rules and regulations.  After this number was confirmed, Alexander asked how the Department or Congress can go about reducing this number. Kirwan pointed to the National Academy of Sciences recent efforts to conduct a cost analysis on research compliance and come up with its own recommendations.  Alexander made clear he believed money is being wasted on compliance that could easily be redistributed to finance more research projects, a sentiment the two witnesses shared.  Later, the senator asked Kirwan if he believed the unnecessary burden and cost of regulations was limited to larger institutions.  Kirwan answered that it was a burden felt by all, regardless of institutional size.  Alexander commended the report for being clear and concise.

Ranking Member Murray noted the task force’s suggestion of requiring better information for students in helping them pick the right college. She asked Kirwan how he thought the current federal data system could be improved to provide better information for prospective students. Kirwan responded that such a change would require collaboration with the Department and representatives from higher education in consultation with parents and students to find out what sort of information was most sought.  He mentioned this information would probably include completion rates, default rates, employment rates, gainful employment rates, average time to degree completion, and availability of financial aid.  

Senator Burr began his question period with a plug for his new legislation, S. 559, that he planned to introduce that afternoon, a bill similar to H.R. 970 that Rep. Virginia Fox (R-NC) presented to the House last week.  He mentioned that his legislation would repeal regulations around defining credit hours, state authorization, gainful employment, and teacher training.  He noted that the task force mentioned repealing some or all of the regulations regarding these topics and asked the two witnesses to expand further on the regulations pertaining to these areas. Kirwan applauded the Senator for proposing the elimination of regulations on accreditation and distance learning.  He then clarified that the task force did not actually believe that regulations regarding gainful employment are inherently bad but that the reporting process required is excessive and burdensome.

Senator Bennet used the beginning of his allotted time to read examples of questions on the FAFSA form that he saw as unnecessary and burdensome.  (Bennet is a cosponsor of Alexander’s “FAST Act” proposal to reduce FAFSA questions to two.)  He then moved on to address the rising cost of college, arguing that the U.S. has a compliance driven regulatory system, not a system that is incentivizing colleges to reduce costs and increase quality. He asked the witnesses what changes in the accreditation process they suggest to improve quality and create better incentives.  The witnesses focused their answers more on the recent trend in state disinvestment in public higher education and the need to fix this trend.  Zeppos commented that outcome goals need to be institution specific.

Senator Warren attended the hearing just long enough to ask a few questions, then she departed.  She began by agreeing with the witnesses on the matter of state disinvestment in higher education, and stated that “we’ve got to get back to investing in education.” She then turned her attention to the $14 million figure that Zeppos said Vanderbilt spends on annual federal regulatory compliance.  Warren said that she calculated this amounts to $1,100 per student.  She then asked Zeppos if Vanderbilt would commit to reducing tuition by $1,100 per student if colleges and universities won the regulatory relief they are seeking.  She asked the same of Kirwan.  Both witnesses replied that some areas in institutions are severely underinvested and that schools ought to have the flexibility to use any savings.  Both said they might try to invest in areas that would increase student access such as need-based scholarships or study abroad opportunities.  Warren concluded by saying, “If you want some changes, there has to be some accountability on the other side.”

Conclusion & Additional Information

Chairman Alexander concluded that the task force did a remarkable job in creating their report and that he was delighted to have bipartisan support to improve the regulatory system.  He said he was excited to have Secretary Duncan’s attention and for his willingness to work with the task force and Congress to make the necessary changes.  Alexander looks forward to taking the advice offered by the report and will incorporate it into a bipartisan process as the Committee begins to work toward reauthorization of the Higher Education Act.  He mentioned that the next hearing regarding HEA would take place in April.

At a press conference later in the day, Alexander also said he planned to complete Committee work on the HEA reauthorization legislation by July so that it would be ready for Senate floor action in September, or whenever there was floor time available.  Presumably the House of Representatives will have completed work on its version of the legislation by then, meaning a House-Senate conference and final legislation could be passed this year.

For more information about the hearing, including written testimony and an archived webcast, go to: http://www.help.senate.gov/hearings/hearing/?id=f5bf107c-5056-a032-52a2-c5f9dbdf4459&autoplay=true

 
 
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