drugs for the united states government is the only customer, and if we are spend ag lot of money developing the drugs for the united states being the only customer, you know, why is it that the stockholders get all the profit if we put up a significant portion of the development money, when, in fact, the united states becomes the customer? i think there's some policy issues around this at large. you know, i think this has come up in the anthrax vac nation, another large, no-bid contract. i'm looking at the policy of no-bid contracts 234 this particular arena, and looking at the facts of it, it's way too early to speculate whether or not there was, you know, any motives to, you know -- we have to think about is this the only company that has the drug? that removes any problem there was an appearance of helping out somebody who had given money to

the president. >> any determination this smallpox treatment was even necessary or needed by this government? >> well, you know, first of all, i'm not going to be somebody with the expertise to make that determination, but we obviously are gathering all the information surrounding this, including the justification for the purchase of this drug in the first place, and what documentation was out there that supported the need for this. you know, this plan was done back in 2007 in the bush administration, as to what kind of stockpiles we needed for a bioterror threat in the country. my predecessor did a lot of work on this, and co-chairman of the bioterrorism task force, and they worked hard looking at whether or not our country is prepared for the threat of terrorism in the form of a bilogical weapon, so, you know,

i think you have to go back and look at the history of this and why this came about and it was that recommendation back in 2007 that drove the purchase of this particular drug, so we're going to be taking a look at all of that. >> i'm curious how your bill prevents things you've seen to make an end run around the moratorium like the armed services 1234 >> well, i think there's a couple of ways in which it makes it difficult to circumvent the ban in our bill. specifically, individual senators are empowered with making the decision about whether an earmark is an earmark in our bill opposed to the current arrangement in which the chairman or leadership decide whether it's considered an earmark. secondly, our bill establishes a 67-vote point of order, so if a senator believes that there's an earmark that is prohibited, he or she can raise that point of

order, not subject to the opinion of any other member of the senate at that point, that point of order can be introduced, and then the 67-vote threshold to allow the earmark to remain in the bill, that's a pretty high threshold so i think that combination makes is very likely we'll be able to sustain the objection and therefore prevent the earmark in the first place, which is really the goal. >> sounds like a senator can think of anything as an earmark. >> no, no, it's precisely defined in the bill. it's not subjective, and they ensure that the senator who raised the point of order was invoking the bill properly. >> okay. >> thank you, all, very much. >> thank you very much. [inaudible conversations]

>> a hearing on college tuition

affordability. the chairman of the house subcommittee on higher education, representative virginia fox, says parents and students should be informed shoppers when choosing a college oar university. this is about two hours. [inaudible conversations] [inaudible conversations] >> this is a fairly small room, and we're all going to be very friendly today. [laughter] because we're in tight quarts, and it -- quarters, and it might get a little warm in here, but i want to welcome everybody to this hearing. a quorum present, the subcommittee will come to order. i'd like to thank the witnesses for joining us today. we appreciate the opportunity to hear your thoughts on the growing cost of higher education in america.

over the past decade, the cost of attending college has increased dramatically. according to the college board, in-state tuition and fees at four year colleges and universities increased approximately 72% since 2001. in my home state of north carolina, the sticker price has jumped 25% in the past two years alone. this struggling trend of higher prices has several causes like weak local economy, increased spending on student service and academic support, and state budget crisis. states facing deficits and persistently high unploament are forced to cut speaning across the board, and as a result, public colleges and universities can no longer rely on the same level of state and financial support and make tough decisions including cutting services or raising student fees. leaders in washington long recognized the value of higher

education and for paying students 20 compete in the global work force. in 1965, congress created the higher education act to help low income students pursue a college degree. as a result, last year, more than $169 billion in federal financial aid was dispersed to undergraduate students, up 81% since 2005. however, as our nation struggles with trillion dollar budget deficits and unprecedented national debt continuing to increase federal subsidies to supplement the growing cost of college is simply unsustainable. in the last school year, the federal government provided three quarters of all student aid. despite this taxpayer investment, millions of students are still struggling with significant student loan debt burdens. clearly, the rise in the cost of higher education in the united states is a problem, but the answer cannot be found in loan forgiveness gimmicks or federal takeovers of the student loan

industry. as we continue to rethink the role in education, we need to use the influence to encourage kt and transparency. the end goal is for the state institutions and students to determine the best path forward. higher education remined fundamentally unchanged since inception and with most universities and colleges relying on professors lecturing to students who live on or nearby the campus adding significantly to their cost of attending college. to help reduce tuition and fees, institutions of higher education should be looking for innovative ways to incorporate new technology and better address student needs. under the current system, there's little incentive for schools to enact lasting changes or accountability measures for the billions of taxpayers' dollars spent each other. states, students, and parents have to demand accountability for the investment, not depending solely on the federal

government. in fact, in some instances, the federal government has done more harm than good. for example, we have seen your administration restrict academic freedom and tamp down on innovations through inappropriate regulatory policies. perspective students and their parents have to make it a priority to educate themselves about the true cost of attending college. meanwhile, colleges and universities have to do their part to streamline costs and lessen the burden for students whenever possible. fortunately, some innovative institutions have already taken it upon themselves to do just that. many colleges and universities have dramatically reduced administrative costs by eliminating or consolidating duplicated services. others found ways to make classroom space offering courses late at night on weekends to help working students pursue a degree. the university of washington and

others recently implemented accelerated degree programs which help the institution save on operating cost and pricing student services while allowing students to reduce their debt load by graduating in a shorter period of time. as the chronical of higher education recently noted, cabrini college in pennsylvania is working to cut tuition and fees by 12% without lowering scholarships for freshman. mesa university in colorado are working to we deuce costs, and we look forward to learning about their initiatives in today's hears. each ensures more affordable college educations are available for students across america. we should continue to share best practices like these while also encouraging increased transparency in the reporting of annual college costs. by making the most up to date information on tuition and fees available to the public, students and their families can better understand the costs, any

loan commitment they make, and develop a plan for managing any resulting debt before stepping foot on campus. i look forward to a productive discussion with my colleagues and witnesses on how to work together to help keep college attendense within reach for students nationwide. i want to recognize the ranking member for his opening remarks. >> thank you, chairwoman foxx. i'd like to welcome and thank you or distinguished witnesses for joining us today. this hearing is an opportunity for this committee to reaffirm commitment to football, accessibility, and student success in higher education. as we look for innovative strategies to reduce college costs and bolster completion, it's important we do not create new obstacles for low income, first generation college, and

non-traditional and minority students. these populations are entering our colleges and universities in record numbers and must have the opportunity to go on and succeed. as ranking member of the subcommittee, i'm deeply concerned college costs have risen in the last decade. according to the college board, between school years 2010 to 2012, in-state tuition at public four year institutions rose by 8.3%, and at the two-year institutions, experienced a sharp increase of 8.7%. in a recent national bipartisan poll conducted by the young invincibles, the institute for college access and success known as ticas, and the demos, 84%

said making college more affordable should be a priority for u.s. congress. today, thousands of students find themselves incurring inordinate amounts of debt to finance their education. college seniors who graduated in the year 2010, for example, had an average of $25,250 in student low debt. these trends are especially troubling given that the jobs of tomorrow will require students to have at least two years of post secondary education, and most states are slashing their education budgets. in the past several years, democrats have taken historic steps to make a quality higher education more accessible and affordable for greater numbers of of students, by the passage of the student aid and fiscal

responsibility act enacted as part of the health care and reconciliation agent of 2010 made the largest investment in student financial aid since the gi bill. in the 11th congress, democrats ended the taxpayer subsidized federally guaranteed federal family education loan program known as felp replacing it with the ford loan making college loans for stable and efficient at no cost to taxpayers. by transitioning to the direct loan program, congress is able to reinvest $68 billion in federal student aid. they in connection in connection -- increased the award, enhanced the majority of institutions, and community colleges and

strengthened the income base repayment and increased investments to other federal programs. the bipartisan passed higher education and opportunity act of 2008 increased transparency, and investments in federal student aid. under 1805, u.s. department of education is required to collect and publish lists of tuitions and fees at all u.s. post-secondary institutions holding colleges accountable for rising fees and tuition. those institutions with a largest percentage increases and prices must submit a detailed description to the department of education outlining the reason for the increased costs. 180a also encourages the use of innovative strategies to reduce costs such as need based grant aid incentives.

while the democrats have made great strides in tackling this issue through the federal investments and pell grants in direct loans, the american opportunity tax credit, and enactment of 180a, i agree with education secretary, arne duncan that we have to do more to reign in costs and student debt. i look forward to hearing from today's witnesses on how to expand affordability, accessibility, and student success in higher education and reach our nation's college completion goals. thank you. >> thank you so much. pursuant to committee rules 7c, all members are permitted 20 submit written statements to be

included in the permanent hearing record, and without objection, the hearing record is open for 14 days to allow statements, questions for the record, and other extraneous material referenced during the hearing to be submitted in the official hearing record. it is now my pleasure to introduce our distinguished panel of witnesses. jane wellman is the director of the delta project, a research and policy organizations working to improve productivity in higher education through more effective management of resources. since 1995, she's also been a senior associate with the institute for higher education policy. dr. ronald manahan is the fifth president of grace college and seminary serving as president since 1994 and served at the school's professor of biblical studies, vice president of college academic affairs and

provost. mr. jamie merisotis -- got it -- [laughter] is the president and ceo of the lym that foundation. before joining in 2008, he was the founding president of the institute of higher education policy. mr. tim foster was appointed at the 10th president of colorado mesa university in march 2004. mr. foster previously served as the executive director for the colorado commission on higher education and is head of the colorado department of higher education. before i recognize you to provide your testimony, let me briefly explain our system. you will have five minutes to present your testimony. when you begin, the light in front of you will turn green. when one minute is left, the

light will turn yellow, and when your time has expired, the light will turn red, at which point, i ask you wrap up your remarks as best as you're able. after you testified, members will each have five minutes to ask questions of the panel. i now recognize ms. wellman for five minutes. >> thank you very much. good morning, madam chairwoman, and members, it's a pleasure to be here to speak about the research down by the delta project, a non-profit, non-partisan research group focusing on where the money comes from, and where the money goes in higher education. i'm going to speak quickly about what we see as some of the major patterns or major trends in the revenue and spending data for higher education. our data covers public and private non-profit institutions. i'll be focusing on the time period roughly 1999 to 2009 because we use expenditure data as well as revenue data.

there's a bit of a time gap involved. the -- so you can mentally adjust for some of the numbers i'm going to talk about for the last couple of years since 2009 when we know that there have been continued dislocations in times particularly in public institutions. first comment, first pattern, we have some slides, but i think they're not working, so this will be nor zen than usual, so you have little tiny versions of this in the testimony. bear with me, and i'll go through them quickly. first pattern is levels of extraitification and the real differences between public and private. there we go. something's popping up, between profit and non-profit institutions over this period. one of the really big stories over the last decade has been the growing bifer cation between public and private institutions with the majority of new enrollments, a million-six plus

of new enrollments into new community colleges, and an awful lot of increased spending occurring primarily in a relatively small handful of elite institutions with endowments. you can see on this chart the way we've organized data is by broad sector carnegie categories. on the left, there's private research universities. on the right, community colleges. the green line here is what's happened in increased spending per student on average, and in that sector since 2009. the purple line is where the enrollments have gone, so you can see sort of quickly here what the differences have been. if you go to the next slide, one of the consequences of this is you'll see is a real unevenness in access to resources between the relatively small handful of elite institutions in the ma majority of institutions where students are enrolled.

with average spending purr student and the elite institutions somewhere around $35,000 per student versus public community colleges where spending is closer to $10,000 per student, so it's a real pattern of differences and other than this one, generalizations about funding in higher education is always suspect with such differences. second major comment has to do with what's been happening to tuition, which i know is a primary interest to this panel. you know the story of rising tuition, which have been continuing to rise well above inflation for the last 20 years; however, there's been a growing difference between grow prices charged to students and spending per student cost per student so the growing price in cost gap is one of the other big pat terns in higher education. for the majority of institutions, increased tuition revenues are not translating into greater spending.

the reason for this is cost shifting as other revenue sources are evaporating in the institutions, rather than reducing their spending and some might argue they can't reduce spending that much, but rather than reducing spending, they shift the costs on to student tuition, so costs are here, tuitions are here, and what you see in a year like 2009, a time of recession, what you see is both cost cutting by the institutions and price increases and having those two things happen simultaneously is one of the real unsustainable patterns in higher education. if you look at some of the data here, this figure here shows just the one year change between 2008 and 2009, and what's happened in tuition revenues, how much the institutions are capturing in revenues per student versus what they are getting in public institutions from state and local resources versus what they're spending on

the students, so looking at that fap between revenue -- gap between revenues, spending -- tuition and state revenues in spending gives you a pretty good picture of what's going on, just to read one of them, in private and public research universities, tuition revenues average increase in one year is $369, at the same time the institutions losing on average $751 per student from state and local appropriations. despite that, they spent about flat, an increase in $92, probably spending down reserving during that period. the next chart is a ten year pattern with the same numbers, and what you see is that over that ten year period, most of the new spending in higher education is coming from from tuition revenues. same kind of pattern of price and cost disconnect over that period.

third comment, i don't have charts on this one, so let me just speak to it which has to do where the money is going in higher education. one of the patterns weave seen and it's commented on widely in higher education is a modest erosion, but a consistent erosion in the amount of money that is going to pay for the direct cost of student instruction, and an uptick in spending that's going for at min straitive -- administrative activities, academic support, which could be computing, and other types of functions, so you see a winding down, modest, but consistent, in all constitutions from the elite ivies to community colleges is a reduction and increased spending in administration. what we saw in 2009 was an interesting and we hope welcomed slight change in that. in the first year of the great recession, when you see evidence of spending cuts of an institution, this time we saw

greater attention -- sorry, i'm red already -- to the efforts to control administrative expenses and make cuts there versus of spending on instructions, so the protecting instructional spending. i'll jump quickly to another major point, and then i'll stop. if you look for a smoking gun in higher education about where the spending has been going up, single biggest factor for increased spending is in employee benefits and specifically health care, up 2% -- 5% per year consistently overtime. if there's one area we spend has to get cut if we're going to take care of tuition, it's got to be health care. pardon me for rushing through that. five minutes goes by fast. my apologies. >> [inaudible] >> madam chair? i ask unanimous consent that we all agree to extending the time of five minutes to a minimum of

seven, possibly eight so that we can really go over these numbers that have been extremely of great concern to many of the members from both sides of the aisle, and i think that it's worth giving them that additional time if you have no problem with that. >> thank you. let's see how our panelists can do within the time frame, and ms. wellman has set a pattern here, and we'll try to be fair to everyone involved, but we won't set the time at seven minutes, but leave it at five, and try our best to let people finish the thoughts, and we'll be fairly lenient in the questions, how's that? >> i have no problem with that. >> thank you. dr. manahan? >> thank you, distinguished committee members for the opportunity to testify this morning. i'm ron manahan, president of

grace college and seminary and accredited residential credited institution of arts and sciences in indiana. grace offers undergraduate and graduate programs and enrolls over 1600 students from 36 states and eight countries. thank you for the opportunity to testify and provide you with information regarding our institution's efforts to address the rising costs of college education. for a number of years, we had been concerned about this issue, but the economic turbulence of 2008 and beyond made even clearer that our campus had to address rising costs with greater urgency and that federal and state support of higher education was challenged. we would not simply stand by and wait for help. grace has received the most attention because of its three year degree option. we reviewed many aspects of our

college, and we have more to do to determine where savings and reforms can be made. specifically, we addressed rising costs in four ways. in 2007, our strategic plan called for the evaluation of every academic program in terms of data points such as enrollment patterns, staffing, cost effectiveness, demand among high school students, job market issues, ect.. each program was placed in one of our four categories listed in my prepared testimony. the review was completed in 2009. ..

plan operations, food service, publications, marketing and printing and regional businesses that provide services. we've been able to maintain or reduce costs. the third lady address the cost is by exploring innovation. we developed a degree option for

every baccalaureate program offered. this innovation required an intense two year development in preparation process and ed five goals among which are requiring 120 credit hours for all baccalaureate degrees and achieving increased accountability. though the option began very very early results are positive. 40% of freshmen students indicate the plan to gradually and three years. freshmen are averaging a semester nearly 17 credit hours. applications and deposits for next year are up substantially. partly, i think, because of this new option. the three year degree option

reduces cost 25% compared to the four year option. a second innovation at nursing cost is a two year degree program designed to make education affordable and and more at risk areas among individuals with much to lose in this economy. fort wayne in indianapolis are the first to locations. we are looking seriously at other great lakes cities. this program matches the first two years of our on campus four year degree option. the annual cost for a full-time student in this program is only $7,800. before any aid is applied. a third innovation is grace's placement promise. students meeting certain criteria may be eligible to earn an additional year of

undergraduate education tuition free. if they don't find employment or gain a graduate schools acceptance within six months of graduation. a fourth way grace addressed cost was through collaboration's and partnerships. for a sample, greece collaborated with four of the two institutions to offer at nursing and engineering and design offered the nation's only graduate program in orthopedic regulatory and clinical affairs in order to meet a regional and critical business need. we realize that our three year degree option and the school are not for everyone. we believe they are right for us. we believe our changes address cost and strengthen education and access, and we have more to do. thank you for the opportunity to tell you about our efforts.

i'm grateful for federal funding to help students. but how your education must be vigilant in controlling costs and ensuring access and increasing employee ability. thank you for your interest in this topic. >> thank you, doctor triet good morning, chairwoman fox, chairwoman hinojosa, thank you for the opportunity to be here. i am president of the loom and a foundation that the nation s the these conditions largest foundations focused exclusively on postsecondary education access and success. streamlining cost reducing tuition in higher education isn't just a good idea, it is essential to our future. equity of educational opportunity is an american dalia that gives every person the chance to succeed and contribute. but the most important reason for streamlining costs and reducing tuition in the modern economy is simple, it's jobs. recent estimates show by 2018

more than 60% of american jobs will require some form of post secondary education. today only about 40% of american adults have an associate or bachelor's degree. for young adults between 25 and 34, this level was only good enough for the u.s. to ranked 15th among the developed countries. by comparison, a stunning 63% of young adults and south korea have a college degree. we believe 60% of americans will need a high-quality degree or credentialed by 2025 for the u.s. to remain economically competitive. much, if not most, of this increase will need to come from low-income, first-generation, minority and adult populations. unfortunately, we don't have the resources to scale of our current system to the size it needs to be in order to produce the number of graduates our economy needs while maintaining or improving the quality of its graduates. the best way to increase the number of highly qualified college graduates to the level

but we need is for the higher education system to become more productive. to meet the big goal of raising college attainment rates to at least 60%, connectivity improvements will require a substantial increase in the number of high-quality degrees and certificates produced at a lower cost for the degree awarded a while improving access and equity for the least well served populations. to this end, lumina is working with states and institutions throughout the u.s. to redesign higher education to produce more graduates of lower-cost. working with our partners to confront the core assumptions of how higher education is structured, funded and delivered. our work and productivity of higher education is based on four specific strategies. the first is performance funding or targeting incentives for colleges and universities to increase college completion for underserved populations to shorten time to the degree of the credential and to reduce the cost of delivery. many states are moving to

performance funding models that base some portion of institutional support on the number of graduates produced rather than just the number of students enrolled. tennessee is now distributing 70% of its higher education appropriations based on results and quality rather than just enrollment. this concept has spread rapidly with nearly 20 states already using are developing performance funding systems. the second strategy is using student incentive to course completion. a good example is found right in my home state of indiana at university indiana kokomo where students commit to completing 30 student hours per year maintaining continuous settlement and making satisfactory academic progress receives three successive years of discounted tuition producing a savings equal to one full year to the end of the program. their strategies to develop and implement the models of delivery. fer symbol a consortium led by the university of texas at

austin is working with carnegie mellon's open learning initiative to offer redesigned general education courses which can be completed faster, in some cases twice as fast, than traditional courses with the same or better student performance and knowledge retention over time to read the fourth strategy for increasing productivity of higher education is to introduce business efficiency to produce savings that can be used to graduate more students. much of what needs to happen here is to encourage cooperation and collaboration among the institutions to improve quality and reduce cost. since ohio began requiring annual efficiency savings, their public colleges report more than $900 million reduce cost. now in my written testimony i discuss some of the implications of the state and institutional efforts to increase productivity related to the critical issues of the financial aid, data systems and quality assurance. for now, let me say federal student aid continues to be the bedrock of support for

low-income populations and must be sustained. but innovation and creativity will be required to serve the increasing numbers of college graduates that our nation needs. in addition it is urgent we develop comparable data at the national level on the student progression towards degrees, call the church of asian and ultimately job placement. in terms of quality assurance, we need to realize we are on the cusp of a fundamental change in american higher education. a shift away from a system based on time to one that is based on learning. in the knowledge based economy, the degree and other credentials must represent real skills and knowledge, not the amount of time a student has spent sitting in a classroom. increasing the number of americans with high-quality postsecondary degrees and credentials is vital to our economic future. these dramatic improvements cannot happen unless we streamline costs and reduce tuition by making the higher education system more productive. as you heard, lumina foundation is working on this issue on many

fronts, and we stand ready to share any and all of what we are learning with all of you. thank you very much. >> thank you very much. mr. foster. >> thank you, madame share, a ranking member and a josette and members of the committee. it is a pleasure, in fact, to be in front of you and it's actually in honor of having not been in front of a congressional committee and probably a little bit more nervous than jamie. we are supposed to be in denver talking about this very topic but decided to come here today instead and testify in front of your committee. our state is -- [laughter] based on the plane flight i.t. was a bad choice. our state is home to one of the most efficient, according to the delta project, systems of higher it in the country. i think we are second as you measured baccalaureate or bachelor's degree is based on dollars invested. we also rank among the top five or ten, depending on the year, percentage of the population of

a bachelor's degree or higher. that said, we face the same stress and strain the institutions and other states face. we took the 30% reduction in the state support over the last two years. the governor's budget proposes an additional reduction of another 10%. and quite frankly we anticipate that might increase to 25%. this is not news to anyone. we've been watching the growth medicaid which is driving this kind of cost shifts in the state budget, and so we have been preparing for this for the better part of seven years. countered intuitively, what we have done is on the revenue side, we went to a pricing model that charges students for every credit hour that the take. surprisingly enough what we stock and the students pay for each credit our directed to the actually wind up rather than down. and we think that their speed to the degree will accelerate. we also have done a lot of different things in terms of financial aid. and so, we do financially systems where if you are at 375

or above and have one or the other two at the top 5% in your credit rating class or 29 we give you a full tuition fee scholarship. what we found was 59% of our students who have the need also qualify for those scholarships. and so, what we also found is because we have higher expectations in terms of academic performance, the retention of those students is high year and we think the graduation rates are going to increase as well. for middle-income students who have left out of the financially conversation, we looked at the work study and work study i think has been one of the same sort of ignored at the federal and state level because students who are engaged in the work study also retain higher levels and so, we are offering up to 20 hours of work study money to students regardless of the need, and again, seeing significant increase in the retention. and it's really the connection to the institution in connection to people what the institution which we think is the critical element in that game. on the expenditure side, and

with some trepidation with chairman fox, wearily on the side and looked at our structure and administrative structure, president, vice president of academic affairs, beans, chairs, faculty, students and we spent a lot a million dollars six years ago on the dean's. we made a decision on our campus to do away with beans. apparently we will save a million we save conservatively about half a million dollars and one of our faculty i think mr. that voice in the administration i don't think our students have missed the expenditure of the funds whatsoever. we also -- because of the ongoing budget reductions it is a sort of continuous budget cutting exercise and i say budget cutting and i will tell you that in talking with folks in the region that pushed me a little bit and say budget cuts are efficiencies coming and i would have to concede most of them are in efficiencies. and so, we've done a number of things in addition to the deans the copy systems to having our largest renewable energy program where we used ground source heat

and exchange to heat and cool buildings which seats about 75% of the cost of heating and cooling buildings and we get suggestions like in the summer we now concentrate all of the class is in one or two buildings and so we don't cool and maintain and quinby of the buildings. i could go on and on but i would be way over my five minutes and get in trouble with the chairman. i will tell you according to the state agency thereof for 500 accredited institutions of higher learning in the state of colorado if adam smith anticipated a perfectly competitive market place, i would submit to you we see it in higher education and i think it is true in most states. if we are not doing a good job, our students tell us and if we are not doing a good job our parents tell us. i have an open hour and meet every two weeks with our student government. i go to every door of every semester and we have pizza and talk about their experience is and we try to listen to what our students tell us in terms of what we are doing.

recently we have been fortunate i think mr. hinojosa talked with the percentage increase. our percentage increase this year was 4.7% on tuition fees. regrettable, but again, there is a to rich claim which is affordability and quality. and i would submit to you that if we slash the quality i don't care how or for what is it is not worth experiencing the and it's not worth spending time and money on and the readers. its high quality and you can't afford it then it is absolutely meaningless. i will tell you, and a little nervously, we do spend a lot of time and energy trying to comply with and understand directions from the u.s. department of education. for example, we offer a satellite campus and colorado and have for about 20 years. that committee asked us to bring our medical office assistant program and because of recent roles with the department of id, we have to actually submit a formal change request which is about authority page document and will take us the untold

hours and time to try to get that approved so we can meet the needs of that community. we'll suspend the financial aid office an inordinate amount of time every year poring through policy directives because the goal posts move every year. last but not least sort of my and and with apologies this is a requirement in terms of what information we have to put where on our web site it has to be one or two clicks away. this cost us hundreds of hours of staff time and again i guarantee you with 500 choices students if they can't find the information that is contained here conveniently whether it is expense, safety, quality of programs, again they let us know and they let us know by going somewhere else. so, i would -- i've gone over a little bit and so with my apologies, madam chair, i will wrap up right there and this is a critical issue the future of the country is based upon our continuing efforts in educating

both young people as well as adults. >> thank you very much mr. foster. again, thanks to all of you. i think you did a commendable job of transmitting a lot of information in the short period of time that you were given, and i appreciate the effort you gave. i will begin now with our questioning from the members to you all, and most of us make some comments before we go ahead and do the questions, and i did want to say that i appreciate -- i read your written comments last night and these will be in the record, and i want to say to anyone who is interested in getting a perspective on the

things you said while i commend the materials that you submitted, and i will make two or three brief comments and then i will ask a couple questions. number one, mr. foster, i really appreciate your saying you didn't mention this in your comments that cmu understands to our customers are, students. i think someone who worked in institutions a higher education i think too often there is a failure on the campuses to recognize that. ms. wellman, at some point i think we should talk a little bit more about the area of benefits and how that is driving cost because i am not sure that we have had a full discussion of that, and as somebody who has again worked in the system for a long time or did work in the

systems for a long time, i'd like to see us talk a little bit more about what we've known about innovative programs for a long, long time, and how they are working it seems to me we have known a lot of these things. we've known a lot about student learning styles and about dual credit and things like that that perhaps don't get enough attention in the public arena and are not presented as alternatives to increasing spending. there are ways we could reduce cost. mr. merisotis, i couldn't let this meeting ago by without commenting on the really impressive comments that you made about the system based on learning and not on time. i'm very impressed with that approach to the lumina foundation is taking, and obviously we need to do more about that. in the higher education.

i wonder if ms. wellman, if you have any other examples that you would like to give about how institutions are dealing with state spending shortfalls very, very quickly. do you have any other examples you would like to present? >> the general pattern as i mentioned as likely has been for public institutions to off load a lot of the reductions in state spending on the student tuition. i think in this recession institutions figure they have hit the wall on that and we see much more evidence now of big public systems as well as small institutions paying a lot of attention to the cost connectivity. they are cutting back on -- they are paying attention to student credit accumulation. they're going into purchasing cooperatives, they are tackling health care, so i think there is a lot of good examples more now than we have ever seen before.

>> mr. foster, would you mention something more about what kind of scaling back you mentioned scaling back administrative and operational costs. tell me a little bit more about how you address those concerns. i am intrigued about flexible the summertime using only a couple buildings and cooling them. that seems to be something more and more schools could do and the same thing in the wintertime. would you mention something more about that and how did you interest concerns that were expressed on your campus. >> when i first got to camp as we were operating in the red and so that is not a sustainable model as we all appreciate it. the concept came up and we did the traditional approach which convened a committee. unfortunately the even numbered committee. not seizing the time and they came back three period three and

said we were tight whether we would eliminate all the other three safe money is an issue we would have to join those who say that it's time to walk away from the deeds. we also engaged as a whole the classroom idea in the summertime we had a suggestion on a spot on our website and we did suggestions all the time. we have rebuilt our instruments and we were able to pull out of the state's insurance pool and effectively were underwriting the department corrections and transportation which are obviously much riskier than teaching on a college campus and so we were able to save money there. from the student perspective i should go back and say because we chatted a little bit earlier. one of the things our students have the ability to do and was the experience you had when you were president was students who in high school could take college credits while they are in high school and in colorado the district actually pays for the courses we have students that increasingly start with 20, 30, 40, as much as a full gear under their belt and so would just gets them a running start

and really maybe they are not completing it in three years but it somehow feels like they are paying for much less. >> one more quick question to the program you mentioned that you want to take to another place, is that program already approved by all of the approval systems on your campus and you are having to do the regulatory process all over again just because you are moving it to another place? is that what i understood? >> yes, ma'am. what's ironic is in colorado -- and it is one of these federal agency tromping state kind of state statutes or state regulations we are designated as a regional the education provider for the western part of the state about the size of the state of west virginia and sell what we are supposed to do is deliver all of our programs which are all completely approved and as you describe so it is a matter of that community would like us to take that program within the region 50 miles down the road,

and for some reason i think it has to do with the debate on the proprietary schools and those sorts of things here fairly recently. so they've been trying to ratchet back and tightened controls on the college abilities to offer programs and just it makes absolutely no sense to me whatsoever of people write authority page report. >> the subject today is not regulatory reform but it is an issue we are very concerned about. mr. hannah josette? >> i have found your presentation coming each one of you, very interesting, and i certainly hope that and take advantage of your sharing success stories. my first question is to jamie the federal government continue role in ensuring access to low-income and underserved populations is important throughout the country.

tell us how do you square the national goal of increasing the number of college graduates with controlling costs? >> thank you very much. there is no issue more important than increasing the high-quality degree of attainment for the nation's least served populations, low-income first generation, minorities and the important population of adults as well. i think that we need to think hard about these issues of productivity and not see that productivity has something that is actually being done by somebody to somebody but in fact represents an opportunity to increase the capacity of the system to serve more students. we can't expect parents and their students to bear the increasing cost of higher education without there being a very high consequence for us as a country. what we have done in the last decade or so is essentially shifted more and more of the burden to them, as a productivity represented best path forward in terms of increasing the capacity to get

the students into and through college as quickly as possible and help them to become productive members of the workforce and the society. >> will you elaborate on how the federal government can work with states and institutions to better collect and disseminate clear and concise information on those college costs that you will talk about? to read estimates wendi important we have comparable data based on progression, completion and on job placement for students there are lots of cases where the data systems and we don't allow us to make effective decisions about how well students are doing and whether the student of education is serving bowl as a country. in moving from that time based that learning a system of higher education that i mentioned where the student is the unit of analysis and not institutions i think we have an opportunity to better serve the students by using these federal data systems as well as the state institutional data systems and collaboration to help us better and understand where the challenges are and how to serve

the students better. >> thank you. >> ten foster, in your written statement you use the phrase arbitrer a financial calculations. what do you mean by marjorie financial calculations, and are you referring to the calculations used to determine student eligibility for the federal title for program? or is this something else? >> we would be referring to the pell grants and eligibility for the pell grants as well as student loans and how those change and how much attention we have to pay on our financially. the staff have to pay because the rules change every year if you are in this major making this much progress and at some point i served in the state legislature and i will never forget the district attorney we were debating says we have to have some confidence in the district attorney's judgment, and i would submit to you that we would be much more effective if we had a little more confidence in financial aid

officers abilities to package and have flexibility in terms of students that they want to give that to and feel are making progress. trust me they are not out there trying to give aid to students who are not progressing and they just are inconsistencies in terms of what my major is and if i feel this class and it is not my nature then i am still eligible but if i feel this and it's in my major and i am not eligible than it is a sort of one-size-fits-all parameter that just gets in the way and ends all sorts of crazy gyrations and machinations to try and maintain the students in college. >> cmu sites for 800,000 by e eliminating all of the dean physicians. will you point specifically to where the savings was invested in students attending cmu students? >> what we have been able to command in the chairwoman will appreciate this on the college campus you can start new programs because new programs are like small businesses they

lose money the first year you can imagine if we start a new program a bachelor's degree and a construction management program mechanical engineering and of them would be enrolled or hear themselves and so that half a million dollars of savings allowed us to do was to have an actual revenue over expenditure so that we could start those kind of programs and it's those kind of programs, and i guess i go back to the old naacp and which go to college, get a better job, all right. if you don't have those degree programs coming and we have added the better part of about 20, all of which have double digit employment opportunities over the last decade, and this first-generation students who in particular find it very compelling as to all students if i go into this major what am i going to do it afterwards to start with one year to year, for your degree programs for wonderful opportunities and for us our strength as a community as a two year and for your

graduate institution you can come in in one year have your certificate be in a nursing aide and working to pursue to continue working to pursue door bachelor's of nursing continue working, come back now and get your doctor's nurse practice and so those sort of things are what we think are going to help people and keep them committed because they lose focus. >> thank you to read my time is expired but i hope one of my colleagues will address greece, which's three year degree program because that really caught my attention. i yield back. i can ask that question. >> excellent. i liked your discussion with us, your dialogue on the program saying that it ends up offering 25% savings to the full-time students paying tuition, room and board. tell us a little bit more about the few years that dewaal

carried this out and why more colleges were not using your model. >> thank you for the question. our understanding is that we were in some sense beholden to more of an agricultural calendar on the academic year, and we asked the question is there another way to conceptualize the academic calendar, and we did. the basics of the program is simply this, that each semester is divided into the two weekly sessions with an extended weekend break between them, and that is repeated both in the fall semester and the spring semester and students enroll in the three year degree option they take the 33 our courses in the first eight weeks, so the focus is narrowed down to three as opposed to five courses and

it comes out that more quickly if you will. they repeat that in the seven or eight weeks so at the end of the first year they've completed 36 hours. sestak is the equivalent of taking 18 credit hours per semester under the regular program that we know. >> that's correct. >> and what we have learned about that is this, having taught for a lot of years in the more traditional format and monday, wednesday, friday, salon, there is a lot of stop and go traffic that happens in the classroom. you teach and then there is a long weekend and you come back and you are looking up to the previous time and you are moving forward. this reduces some of that and we have learned from students that once they adjust to the piece of

it, they are intrigued with and seem to prefer narrowing the focus to three as opposed to five scattered over a long the purpose of time. >> that's an interesting response to my question and i will close by saying is it possible that those taking that program, that they could work some number of hours per week of say ten or 15 or 20 hours? is that possible? >> i think it is. if they chose to -- another element of that three-year degree option is that we require of all students 12 hours of applied learning. that is they must participate in an actual real world situation to test the value of what you're getting in the classroom, how they are progressing and we do that to advance their employability and there are some other elements to that.

>> thank you, madame chair. >> thank you, madame chair and for holding this hearing. i think this is a really very timely and important and thank you all for being here. i am thinking about this in the revenue that come in the one thing that was not mentioned, and i know that colleges really try and keep their alumni involved participating in the fund-raising that the universities and colleges to. maybe mr. foster you could speak to that. we've seen a reduction in the appropriations from the state and federal. is there -- has there been a decrease giving by the alumni or others to the university's?

>> as you identify those reductions in the state support and one way that we can try to make that is in fact with particularly alumni, and i would say that while the dollar amount per gift has declined, the number had increased so we have a broader pool although they are giving less intensely and so it helps. it's not the entire solution. it's not like any problem you have you look around and you try to find as many possible contributors to solving that program and that is certainly one of them. >> thank you. ms. wellman, you know, there is fault to be the view that in higher education institutions like to keep up with the joneses and the other universities to take a tour from one of the universities in my state of illinois it was great. the one thing that i noticed was this huge building that was just

being built and it was beautiful, huge. i asked what it was and they said it's the fitness center. i am very -- this is important to me and illinois is the only state that only has pe every day for k-12. so fitness is very important, but in this time and i asked why are they building this? they said because we need to have that to get the students to come to the university. how can we make sure that the colleges provide the things that are necessary for kids? is this something that is done to really keep up with other universities in competition? >> it's a good question. i don't have a good answer. i think that many institutions face a double-edged sword in this environment. it's a very competitive environment. they are looking more and more to the students as a consumer

and the need to get the students that have the money to pay. the students who have the money to pay one to have those facilities so they say the need to have it in order to compete in a market they are in. i think the competition for the amenities rather than for academics putting the money into the academic program is a great concern to a number of educators. uzi spending going up and athletics more than it's going up and academics. it's going up in dorm's it isn't going up and student support. i think it is the nature of the consumer regality that those kinds of immediate palpable benefits are ones that students seem to want to have and so i think it is attention that isn't easily resolved. >> thank you. i co-chair the house financial economic literacy caucus with mr. anamosa and we have had this for years and years. i think that it is important that it is critical for

information for this to be available for the students and their parents and mr. foster, given your close interaction with students, how much of this responsibility should fall on the students to be informed consumers and our day coming to the school, and is there more that students and parents can do as consumers to help you increase the competition among the institutions of higher education's? so that they are picking the school that really fits their financial needs? >> i would say lot of responsibility falls on our shoulders in terms of making sure that information is available to them and we look at a good match where the student is critical for us. not having them pertain and finished at colorado universities a personal affront to us and i will tell you increasingly and we can probably go back to 9/11 that all of a

sudden i think you saw a change in terms of family, parents and students and non-traditional behavior in terms of their inquiry and pursuit of information relative to if i come will my son or daughter finished, what is the total cost of attendance and we emphasize to them the total cost of attendance because they always want to whittle it down and assure themselves they will be able to afford it and we try to say don't do that because you've got to be prepared for this cost money to cover cost significantly less than a lot of the institutions we talk about, but it's a two-way street would be my answer and i think it is a police agencies can play a big role in terms of when i was at the department higher and we transition away from the regulatory role to be more published to the consumer guide and found that people in, rather have more faith in that and was a third-party objective listing of cost expense gracia ration rights, retention rates and then you can evaluate for yourself

which school you want to go to. >> mr. bishop? >> thank you madam chair and very much for having this hearing. it is a very important topic and i think our witnesses have provided us with very helpful testimony and very enlightening testimony. mr. foster, i wasn't going to do this but i just want to start you made reference in response to the question from mr. hinojosa to shifting the eligibility with federal assistance on a student's academic major. i'm not aware of any eligibility standard that the federal government maintains that differs from any of the title programs based on the student's major am i missing something or -- >> let me give you some additional information. i'm not a financially expert. i'm just a president so we are the least informed but as we talked about in preparation of this hearing, we talked about the fact if in fact its ties to

the satisfactory progress, and so if i'm teaching biology flexible as a biology major and i feel that course, then in fact that puts it in doubt, my understanding, my eligibility for federal financial aid. if i'm not a biology major line of political science major i feel that second course. >> i'm going to respectfully disagree with the advice that you've gotten. the eligibility for financial late on the federal level to the best i know and i had ministered student financial aid programs for a number of years before i came here it is rooted exclusively in information provided on the fafsa methodology that is itself a bottom line of inspected family contributions which by the way is not perfect but it is the best system we have, so if you do learn something i think we would -- i at least would like to know about it and i think you.

ms. wellman, thank you for your testimony. i just want to be clear you have found that the principle drives of increased student tuition is cost shifting. that is to say reduced state appropriations for publicly supported colleges and for all colleges reduce philanthropy, reduced income from endowment and so on; is that correct? >> in the public sector in particular it is cost shifting. there is a little bit more evidence of increased spending driving tuition among some private but not all. >> when using some private with increased spending driving tuition is that more localized what we might refer to as the elite private -- >> actually not. it's the institutions that don't have the endowment. >> so they are trying to walk that tightrope that mr. foster talked about increasing the quality while at the same time maintaining affordability. >> that's exactly right. >> one of the things we hear frequently is that -- and there

is a very forceful proponent of this notion i'm about to suggest. a man named richard vetter we here tell us frequently the reason the cost is increasing is federal student aid is increasing and because federal student aid is increasing, but gives college administrators the license to raise the cost beyond what they normally would. as your data give you any evidence that that is true? >> nope. >> i appreciate that. dr. manahan, i administered a small college that was particularly good at being not-for-profit and i wanted to commend you for your efforts, and i really think that they are very good and very innovative. but i wanted to quickly -- a little over $10 million of institutional aid that you administer what proportion of the tuition revenue does that represent? so a mother of -- in other words

it is 40 or 41 per cent. >> if you will come in your gross sales or 100% and net sales are roughly 60%; is that right? and does that represent discounted tuition or does that represent in come from endowment and philanthropy allows -- >> it is almost entirely from to v3 this been a key discount to addition to that. do you have any sense of where that pleases you among the comparable institutions? i was in new york state when i was in the new york state the average discount rate was somewhere in the low 40's. it was nine years ago. do you have any sense of where that puts you? >> yes, i do. there are a few discount rates over 50%. depending on endowment levels if you think of it comparable endowment for two hours you might find some in the upper

thirties we have worked religiously to move to this level and find an operation tough to succeed. >> is the 10 million principally need based or is it a combination of the need and merit? >> it's a combination of need and marriage, but given the nature of the students who serve and families which come -- scirica the merit -- >> it would have been justified by the need anyway. >> thank you very much madame chair. >> thank you dr. bishop. >> thank you met on chair for the testimony today and the student aid and the cost of the post secondary education is personal on two levels one been 23 and a half years since i graduated medical school and what i call my second mortgage on my student loans and the fact that my daughter is a recent graduate from her deferment period that is about to end.

intrigued by both mr. merisotis's, and dr. manahan on the kind of training to success opposed to the military if there's one thing experts added this training to time and not to tender we are the foremost experts and cramming 30 minutes of information into two hours to read of all the areas we talked about driving the cost, two questions. do you believe anybody that there is an increased cost deutsch to duplicity among the programs in states and systems of higher education and to tell you that in my statement and we went through period community colleges decided to offer four years degree is the state colleges decided to get into advanced degrees and the competition that causes with the four year economic research adversities and secondly, is there in increased cost due to the need perhaps to provide corselet foot matriculating who aren't quite of to standards and is that due to the track during

of the k-12 post secondary approach as opposed to the jay approach to education? >> the question on the duplication -- look, i think what that has been eliminated. there is still some of that but in the economic crisis we face there been a lot of trees is that institutions have tried to make in the states and one way i think you can see that being promoted is through the performance based on the models i mentioned in my testimony you differentiate by the mission to have a better chance of being clear about what you expect of institutions based on the institution mission there for you can create incentives so you don't have overlapping programs and things like that, so that is in that time period of the cost cutting and i think we've gotten pretty close to the end of but not a lot left to cut in a lot of states what we are seeing is that these efforts to differentiate the mission is a very important outcome and a potentially positive outcome of the unfortunately challenging economic times. >> anybody else on the issue of

the requirements for the remedial work and the cave riddle post secondary approach for the jay approach to the overall education? >> remedial the education is a cost driver. it's not a smoking gun cost driver it is a fairly low cost education. the big problem with remediation is is it working very well, the proportion of students that getting to it that are successfully mediated and go on to some kind of academic success is just way too low setting we have a big conundrum about making it more cost-effective, reducing the cost of actually making it work better that is a big problem. >> i think it is a student cost driver. it is a zero credit course and developmental course as that is so it is amazing what percentage of students come and require primero wimax but significantly in reading and writing as well. the chairwoman and i spoke a little bit about the dual enrollment and we have some districts taking a lot of leverage been covering the we have the community colleges as well as ours that partnership

with some of our area high schools and we identify the students that need development of education at the junior level when they take the act and then on the campus actually we send instructors over in the district pays for those instructors and then when they graduate they are college ready. but it really is more in individual cost driver deleting them on time as well as in the tuition. >> thank you. i yield back. >> you get a gold star for today. [laughter] to fix the mix before madame chair and for the hearing. mr. merisotis jay i see it right? >> it's fine. [laughter] >> i have a lot of vowels come to that. you're point is a very good and all that point but let me ask a little bit about not the

phenomena but the reality of the income disparity that is happening in this country coming and one of the ones -- the major tool to close the gap is education. in particular the post secondary education. and so, as we look at making sure that that educational equity part of the discussion is applied to the next generation, let me talk about the trio program. and can you discuss how increased investments in those programs and similar programs across the country might help mitigate first the increased tuition cost by helping students degree and the preparation gap that also has to happen? >> absolutely. look, you're point about equity is absolutely right, which is the equity of educational but in these extremely important and has to include both improving access to higher education and ensuring that those low-income first generation minority and other students have an opportunity to succeed, and i think that is a lot of what is going on in the performance based on the models is efforts

to ensure they are successful. in indiana the performance based model actually takes into account the success of low-income students and the population. the federal programs have been one of the most important efforts of the federal level to increase opportunities for first generation and other students for decades, and i think they are important in terms of the future. we have to recognize that students don't just pay for college. they actually have to be prepared for college and the have to succeed academically, financially and socially. that academic, financial support comes from the programs because they help students better understand the system, work their way through the system getting to and away for college. so trio is a very important part of the overall federal landscape. >> and if i may, mr. foster, just -- you mentioned the regulation issue that mr. bishop

asked you and i agree the regulations should be streamlined for schools, but i think it is also important reasons for them. they are important to help us to understand the rising costs, prevent accidental or intentional misuse of taxpayer funds, and you mentioned you have spent hundreds of hours as additional cost in preparing the school information students expect to have and they have to have before they make their decision. a dozen that information make the information we've to generate from the federal government also available in the same sense? >> it's important to read all of the information that came out

and was required to be one or two clicks away was contained in different places we felt were more intuitive and we spend a lot of time like dr. manahan would focus groups, with students saying where did you look for this information, what do you want from us, what do you want to make a decision? specs and you say they are not comparable. >> we had collected we thought where the students would go and then what we have to do is reconfigure to make sure students could be one or two clicks away. >> if i may mr. foster, let's talk about the reconfiguration. one of the things that i think is a great accomplishment in the last congress did was creating the income base repayment program so that students would be able to manage their debt. can you speak to efforts your call which has taken to inform students about that program and has a means for them to people to manage that debt? is that a part of the information that they receive?

>> actually apart from that information to one click away which is a different sort of information than you are talking about we look and monitor the average student loan debt and it is an issue which to check very close to coming and so what we've done is actually added a personal or financial lead office, will they do is get counseling because in student loans, unlike in a banking situation, nobody sits down and says this is how much you can afford to pay back based on your occupations we tried to create that person who sits down with those students and says this is how much you can really afford to borrow as a graduate and want to pay it back you want to pay it back in a reasonable amount of time. >> that's excellent. the elephant in the room on the debt side, 40% of the debt that students have as for profit colleges which represents about less than 30% of the student enrollment, and do you see that as anyone to you see that as a

factor affecting cost and as a factor about the regulatory intent of trying to find out what it is and who is responsible for that debt, anybody? i'm out of time. the was my best question, too. [laughter] >> if i might very quickly. the data we have on spending, revenues and spending, we can't include for profits because of problems in comparable data. it's something that the fed ought to deal with coming and we ought to step up to because i can't be answer your question because the data isn't there. >> thank you very much madame chair. >> thank you. dr. rowe. >> thank you madam chairman. think the panel for being here. i think the to higher education system in america is the best in the world. i think there are two great issues that we face in this country right now and it's rising health care costs and rising education cost. probably neither one of us sitting appeared the diocese hasn't benefited from a great

college education, and basically public education. i went to school for 24 years and dr. manahan went to medical school in three years. i wouldn't recommend that to my worst enemy but that is what we did then. one of the concerns i have is i went to college while lived at home, i had a job, my father worked in the factory, we had no student loans then. i was able to work, live at home, go to college and finished college with no debt. number two, because medical schools affordable at that time i graduated from medical school with no debt. i was able to move to east tennessee and appalachia, and underserved area, because i didn't have hundreds of thousands of dollars of debt and to plus salary and serve that area. i see young people now that leave -- i get letters all the time and i assure everyone of us do with hundreds of thousands of dollars and debt. how has that happened where a

young man like myself from the middle class family quite frankly it was very simple when i went to medical school. i have solved the tuition was it the one private, great private university not too far from where i live was more than my father made in that year and the university of tennessee in memphis which wasn't and i made my decision to go there. both great schools. a lot of people do that. that's not hard information to get. and i think the lord, the three children of mine all are graduated from college and they are out on their own. but how has that happened to us? because we cannot sustain this current seven, eight, 10%, kids like myself will never be given to go to college or as the doctor said, spent 25 years of your life basically paying for our house, which is what it costs to go now, $50,000 a year to a private university. when i went to school probably the state of tennessee covered eda were 90%. today it is under 50% in the state of tennessee at a public

institution, and it is all being shifted to the students. any comment? >> look, i may have a walking effort as a way of a pell grant, student assistance -- >> are you out of that yet? >> i got support from the institutional went to, i worked, i did all those things. there was 30 years ago. the problems for today's students have multiplied greatly because of the rising cost of higher education. and to your point, i think the challenges that students and families really are at their limit in terms of their capacity to be able to do with these issues. i think a part of the challenge comes back to the point in my remarks, which is that we can't afford to reduce the capacity in the system to produce graduates. it is very important to the economic future of the country that we increase the number of highly qualified graduates in this country. that means we have to make the system much more productive particularly for the students that haven't had the opportunity, who haven't had the

prior success from their families, etc., and i think that is an important issue for us to understand from the state policy perspective, the institutional perspective and from a federal policy perspective there are many things that need to be done to enhance productivity. >> i served on -- the foundation board and i still on the foundation board at the public university both coming and we have raised money on the private side, and we have shook everybody down that we could come and i know mr. foster has probably done the same thing in his college and dr. manahan also but there are limits to all of that and i don't know, where does this end? >> i think the good thing about this recession has been that we finally i think our starting to hit the wall. for many years in the public sector states and institutions were both complicity and allowing this to happen. nobody decided to make it happen. it happened because of an offense. budgets went down, two visions went up as institutions have too

long believed more money was always necessary for more quality, and i feel we are turning the corner. i don't think we've turned the corner. .. >> the university of tennessee, kings college, northeast community college have classes in there, so there's not an incredible investment in bricks and motar in trying to attract

students. you can get associate and ph.d. without having to transfer credits. there's online classes we're doing. we have to do these things, or as i said, folks like myself will never have a chance or number two, will never be out of debt. i thank you, all. >> thank you. mr. tierny? >> thank you, madam chairman. >> wondering if we could get help from dr. poe. seem to have some lose cash around. [laughter] i saw he was on like a beat on that basis. [laughter] i want to thank the witnesses. it's been helpful. this is an issue that troubled us through the last reauthorization and forever on that. you know, we've been troubled by the fact that this is a partnership, the federal government, the state, the

families, supposed to be partnering to get more people in college in an affordable way and accessible to move on. states, i think, routinely backed away from the partnership in the last period of time, and we put in a provision, heard tremendous feedback from community colleges and four year colleges as well, if we had not done that, tuition costs would have gone up more, and it would have been more and more difficult. should we enhance the program? are you feeling it's not necessary anymore because schools are dealing with this stuff on their own? >> i don't have a good answer. i think the problem of state budgets is so much bigger than what's happening in higher education that the pressure on states to cut funding are going to be with us for the next several years. whether the federal maintenance of effort of requirements puts brakes on that, i think they probably do. this is not the time to take them off. whether they can be strengthened or rewritten, i don't know. i don't think the thing that's

causing the cuts from states is related to federal funding. it's reletted with what's happening to state budgets. >> yeah. well, thank you for that. endowments, a lot of well-off schools and institutions are on that. senator grassley and i started on this path last time and many of those schools don't even pay 5% of their income back into education related efforts on that. now, they still maintain their tax exempt status. is that an area where we ought to be expecting more, ought to be exacts those schools with millions of dollars in endowments to maintain their status and put that back into education efforts maybe what helps two year and four year institutions on that basis? anybody can answer. >> the wealthiest institutions are already spend ag lot of money for endowments. i'm sthettic to your question. my question is whether they continue to raise tuitions at

the same time they have the level of revenue requiring a higher payout in this environment in those institutions is like putting gasoline on a fire. they already have a lot of money. >> an institution with $30 million and endowment spending $3.4 or less than that -- >> i think the issue of the public purpose is really an important one. >> thank you. we see that one of the drivers, i mean, a number of drives, and i listened on that, and i also was a state college product and able to afford to go and get through on that, but the cost of safety now, and campuses are communities, responsible for the safety of their students, energy costs, technology is far more expensive than it used to be, the cost of construction, you know, and the benefits, as you mentioned, all of them because, you know, paying for your staff, whether it's administration or the cost of the benefits. a lot of schools switched to adjunct faculty. i don't know that's a great

thing, but essentially looks as a cost shift, so now the school might now pay for the benefits of that person, but the individual does, so they are paid less, higher out of pocket cost for benefits, or shift on to a health system within the state or that basis. that doesn't seem the wisest way to proceed. another alternative here? dr. foster? >> that's the hardest question, so glad i got the first two. [laughter] there's a temptation to do what you talked about, and some schools have gone down that road, and most that have, have turned around and gone back the other direction because it somes down to quality and quality of people, and i think we all are scrambling trying to find other places to contain costs. i was nodding because it is technology -- we used to think -- it's a cost driver because this generation of students just demands way more rebust technology than you and i consider feasible, and so it really has us searching

everywhere possible to reduce the costs and see if we can't simplify what we do and what's extraneous to the core mission of what we do. our faculty has four courses per semester, which is double that of most r-1 institutions. you know, there's just those sorts of metrics that atsome point, you know, you can -- you're ready to be a college president sounds like to me, so we'll switch places. [laughter] >> sounds attractive some days around here. [laughter] lastly, you know, on that transparency issue you talked about, mr. foster, i think you're probably unusual if you had all of the transparency provisions that the higher opportunity education act asks for. i commend you if you did. the idea of having institutions with the largest percentage increases in tuition prices, submit explanation for that. did you add that on to the act? >> we didn't hit the percentages, so we didn't have to deal with that particular -- >> and used innovative

strategies for price increases and use the incentives to keep costs low. >> we do. i do a monthly e-mail to all of the parents of our students, and try to do two things. one, communicate the issues, and secondly, as i tell them, the more engaged they are in their students' education, and if you're like me, ask yourson -- i have four sons -- what happened today, i get no answer. if i have a little bit information, i get more back. we say this is going on in campus, and they engage with their student and say midterms are coming, ask them if they are studying, and those things, we think, help the dynamic. >> what kind of feedback have you had with your institutions online with the price calculator? >> you know, i guess, the feedback i've gotten, i go out and help move students in, and so this year was the first year that i probably had a half dozen parents say we were considering this institution, generally a private and couple instances, a

public, and we looked at your programs and your price, and we chose here because you are this much less, and so it was the first time i had someone just out of the blue say that was a consideration and that's why we're here, and so i assume they were doing that using our net price calculator as well as the other institutions they were comparing us to. >> great. thank you. thank you, madam chairman. >> thank you. >> thank you, chairwoman. thanks to the panelists for, i think, a very, very good hearing on a very important topic in terms of access to affordable education. a lot of time in committee talking about federal legislation and all forms of education. this question's specifically for dr. manahan and mr. foster. your experience with your universities, you know, did you have a sense about how much time you spend on federal regulatory and reporting compliance and do you have suggestions for us on about how regulations reporting

could be eliminated without jeopardizing integrity of the federal and financial aid system programs? >> i'd be happy to begin with that good question. we have calculated on our campus that, and we're a small campus -- we spend about $460,000 a year on salary and benefits to address regulatory issues, and then that's not counting equipment and other things we need to provide them, so what that equals for us is we spend about $# 00--- $300-plus a year per student to care for regulatory matters. we certainly believe there's a number of regulations that are very helpful and protective, but

those that have less value, perhaps, and fewer changes to continue adapting to -- that is a way to reduce some of that cost because that is passed on in the cost of the institution. i would grant you that there are regulations that are very helpful as well to the student as a consumer and other such things, but over reaching regulations make it challenging to grant funding. >> we have not quantified, and i'm glad i haven't because i would be absolutely under my bed leapting how much we -- lee lementing how much we

spend. we track things the delta project putsous, and you never know how well you're performancing or poor you're performing, and the collection area is beneficial for all of us because you use common definitions, and everybody knows exactly what that is. it's below that radar screen in terms of increasing, and i appreciate the difficulties with proprior tear schools and whatever other issues you deal with, but it pulls us into the vortex that's starting to tilt and have us spend hours. we can get more discreet suggestions, but if we stop changing the definitions of federal financial aid, that would be great because we could know and tell students year to year exactly what the criteria are. >> i just wanted to quickly commend to you the brand new report on student federal assistance that looks at 15 major areas of higher education

act regulations in ways in which burden and overlap and other things can be reduced, and i think that may be helpful in terms of decision making for the committee. >> what role, from your perspective, does the integration of online learning, virtual campus have in increasing access and frankly, potentially decreasing costs? >> huge. like i said, we represent or cover an area that's fairly rural, more jack rabbits than people in western colorado, and so people to access classes online, it's also a matter of convenience for the students. the overwhelming majority of campuses' online activity is students taking classes on campus, and use it to balance their schedule and time management whether they work or other thing, and there's the obvious -- it's more intense. the theory was you could scale

it and have hundreds of students in a classroom and the experience 1 not that way, but it's avoiding bricks, and it's extending the life of our classroom buildings to grow -- we an anticipate about 20% of the credit hours are online because of those sorts of things, and 24r*s a 0% -- there's a 20% bump in terms of how many classrooms we won't need because of the online activity. >> i mentioned carnegie's open initiative dliffing the same -- delivering the same outcomes in half the time. the other is online competency based learning model delivering programs in only four key areas, teacher education, business, i.t., and nursing, and they are having very high success rate with the competency model using online deliver ri -- delivery model. >> we would agree with that. we, in fact, in this three year degree option, the three years

that allow the summers in between to be taken online by courses provided for our campus or from our campus, and those are tuition free to the students. it allows the student to go, perhaps return to their home for summer employment, whatever they need to do. if they need to fulfill some degree component, traveling to another country still allows that, and we have other uses of online as well in our graduate programs. >> okay. thank you. >> thank you, mr. thompson. ms. davis? >> thank you. i want to switch the scale here for a second and talk about california if i may, and i'm not expecting that your experts necessarily in that system, but in terms 6 what you know and -- of what you know and to apply as you probably know as well, the governor's 2011-12 budget is below 98 funding levels with

75,000 fewer students than the 2037 students enrolled today, so clearly a different scale than what we're talking about, and, of course, thousands of people have been laid off, ect., but i'm wondering at what point does the streamlining in the savings hinder student learning? how can a large system like that really afford to go to afford graduates both an opportunity to graduate, but to graduate with something substantive to contribute? >> california, i worked there for many years including in the legislature in the ways and means committee. i would know more about it than i know what to do with. >> well, that's good. >> it's a tough one. they are already cutting access, probably cutting quality. you can't cost manage your way out of the problem california's

got. having said that, california has weakened its policy capacity in the last decade so that they no longer have what they once had which was a way to look at integrated comprehensive solutions so they are all on their own sort of flailing. there's got to be a return to policy capacity in that state to once again look comprehensively across those institutions. as bad as it is, california still has a lot of money in higher education, but it's not being invested as well. >> revenues coming from students at this point. >> right. >> i tell members of any district in san diego that i recall writing checks for $89 for a semester at berkeley. i won't say when that was, but it sends a message to me that the state thought i was pretty important because they made an investment, and i don't think students feel that way today.

i wonder if would cow talk about the transparency issue because i understand what you're saying that people figure out how they want to make comparisons. they know if they have some assistance, some scholarship money, whether it's cheaper to go to one school than another and still get quality, but are there other things that families and students really should know? i heard a statistic this morning that 85% of graduating seniors this year will be living at home. >> uh-huh. >> that's pretty striking. what is it that you think is fair for people to know as they are making those comparisons? does the federal government have a role in that? should, perhaps not be fiat or by rage -- regulation, but how is it that we can assist and help parents and students better information,

or is there nothing else that needs to be done? >> well, i think there's a lot that needs to be done. this goes to congressman roe's question, and that is, where's the individual have responsibility to seek the information out. that falls apart with first generation students because they o don't know what to ask. it's surprising to me the questions you get when you interact with parents and students and sometimes it's safety, sometimes it's cost, sometimes it's what are the dorms like. it's just a myriad of things. like i said, i think most of the institutions i'm familiar with are trying to push the information out and make it as available as possible. we do a lot with high schools, with first generation students to try to educate them and help them understand because the barrier for them is they have a desire to go to college. if they have a complete -- they tend to shut off when it's too expensive, i can't realize that. we say there's a lot of

opportunities for you as a first generation student, but you know, i don't think there's a limit in terms -- any question, you know, the perspective students and families want is fair game. i go back to margaret thatcher which is the market is more powerful and more reliable and more liberating force than the government can be. the pressure we get from those folks 1 ten times what you do in terms of a policy directive. >> three things i think a student or families should know about an institution. one is our -- are students completing at that institution? second, what are they learning? how can we tell? third is are they getting jobs? those three areas of outcomes represent important things all students and families should have access to as a result of a better data systems. >> i would just say this -- to the degree there is a lack of

transparency, it diminishes the value of the education and people begin to sense that deeply, and i think the more transparent we are up front with real costs adds to a better value of the education and trustworthiness in higher education as a whole, and i think every campus bears responsibility to make its own contribution to set a level of transparency that helps people make a decision. we notice this remarkably on our campus. as the value of homes decrease and people had less access to home equity, they became quite well schooled in asking financial questions, commitments, and a number of fronts, and we do get people coming to our campus saying how does this cost compare to that cost and what am i getting into,

so it's important. >> thank you, ms. davis. i want to, again, thank the panel very, very much for taking time to testify before the subcommittee today, and i want to thank all of the members of the committee who came and asked such great questions. one of the wonderful things about congress is the diversity we have, and that diversity causes us to ask lots of different kinds of questions and get many different perspectives. mr. ihossa, do you have closing remarks? >> thank you, madam chair. i thought it was very interesting and informative. i like some of the new ideas discussed. i can't help but think of the some of the comparables to

dr. manahan's three year program, the western governor's university, and how they are doing it a about half the cost and without having all the campuses and all of the expensive athletic programs that we have in many of our big flag ship schools where we pay coach's upwards of $4 million to be a football coach or other expenses that are never discussed as part of the cost of running a university, but i think that what i like is the fact that more and more we are accepting that online courses are going to be more and more acceptable by the employers. particularly, when they are

producing a graduate capable of coming into business or to a program and take it to a new higher level in effectiveness and profits and so forth, so i think that we're making progress in this committee in terms of new success models, and i want to thank the witnesses for theiring share insights with us this morning, and i look forward to working with all of you and my colleagues on this committee to make college more affordable, and to achieve our nation's college completion goals. thank you very much. >> thank you mr. hinojosa. i want to repeat what dr. rose said earlier, and sometimes we forget to talk about it.

i think we have had the best higher education in the world in this country. i think like many things that are being threatened, i think the quality of higher education in this country is being threatened these days, and not just because of the lack of money. in fact, i think the lack of money is probably the least reason that higher education is being threatened, and i agree with what someone else said, ms. wellman, i think it was you, that perhaps the budgets have been a benefit, not a negative because it's forcing people to look at what they are doing. i think that one of the big problems we've had in higher education, and what i've seen happen in higher education in my lifetime is having institutions of higher education decide what it is they want to do. i think that mr. foster's

comment about focusing on the students as customers is very important, but are the institutions focusing on what learning the students are getting or seat time or are they providing income to maintain the institution? i think there's much that we need to need higher education to be looking at, and i agree with ms. wellman. i think that having this money crunch may be helpful, and i go back to the comment when the committee was split three and three and one side of the committee said, well, if money's an issue -- well, money's always an issue, however, in higher education, people have not thought that, and i remember when i was a community college president that the president of our system came to the presidents one day and said the days are gone, ladies and gentlemen, when i could go to

the legislature and say we're doing the lord's work, therefore, you should be giving us lots of money, and i think that i thought that was going to happen a long time ago because i think we had a booming economy, we -- that got sort of waxed over, but i also want to say in conjunction with what dr. rose said, it's still possible to graduate from very fine institutions in this country without a dime of debt. it is up to the student and up to the parents to shop, and i think sometimes you sell parents and students short. i think our whole society does in terms of their ability to make those decisions. we go out and buy cars every every day, go to the grocery store, and we're capable of going out and shopping. transparency, though, i think, is going to be one of the biggest issues, and i think that

is something that has to be looked at. i want to thank all of you for emphasizeing both affordability and quality. i think we can have both high quality and affordability i should say, and i think that's an extremely important concept for us to keep in mind. we do want again, i think, too, as tennessee has done, to concentrate on funding results, not necessarily enrollment, so there's some things to be done, and i think you all have brought up some really, really important issues to us, and i'm extremely please with how the panel's gone today, the questions raised, and the issues that have been raised, and i want to say again on the issue of parental involvement, we've known for 50, 60, 70 years that what makes a

good elementary and secondary school is a good principal, good teacher, and parental involvement. that is not different from higher education, should be exactly the same thing. you'll get good results if you get the customers involved with checking out the quality of the goods they are receiving. i want to thank you for being here, and i again, thank the panel, and no further business, this subcommittee stands adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] >> in a few moments, a discussion of u.s. and israeli perspectives on iran in light of that country's nuclear program.

>> now, a discussion on u.s. and israeli perspectives on iran. the israel policy forum in new york city hosted this hour and a half event that included a look on the attack of british embassy in tehran and a look at a city that houses a nuclear plant. [inaudible conversations] >> okay. let's kick things off, if i may. everybody finish or enjoy your lunch, and we have a very

exciting topic today, and i'm sure everybody wants to get into the conversation, so let us maximize the opportunity by kicking off. first of awcialtion thank you, all, for -- first of all, thank you, all, for joining us today. i'm peter joseph, president of the israel policy forum, and by way of introduction, as many of you know, the forum was founded in 1993 to serve as a strong base of support from leaders in the american-jewish policy and business communities to support a u.s. diplomacy aimed at securing lasting peace in the middle east. today, the israel policy forum continues its work to mobilize a prominent leadership network in support of a strong u.s.-israel relationship as well as a

responsible and effective u.s. diplomacy aimed at a lasting negotiated two-state solution to the israeli-palestinian conflict . aaron david miller, a former state department official, recently described ipf as idealists without illusion. those of you who joined our security symposium in september may recall that our close friend, former israeli deputy defense minister defined ipf as an organization that provides the right combination of being pro-israel and pro-peace. today, we are particularly concerned with the current atmospherics within the jewish community and within the body politics in washington, d.c.,

particularly, when it comes to the u.s.-israel relationship and the effective use of the u.s. diplomacy in the region. that is why we're committed to convening forums of civil dialogue like the one today on pressing issues that face shared american israeli interests. there is, by all accounts, no more pressing issue today than iran's nuclear ambitions. in the past two weeks, there have been two mysterious explosions at iranian military installations including one just yesterday. in israel and in the united states, politicians and pundits are openly discussing the

possibility of an israeli-military strike against iran even as new sanctions have recently passed which have escalated the pressure against the iranian regem. the iaea report earlier this month provided the clearest example or the clearest evidence i should say yet that iran has pursued nuclear weaponry, and that, in turn, has escalated fears of an iranian nuclear threat as well as a considerable debate on how to proceed. these are just some of the issues which we hope to engage you in today and will be discussed by our expert panel. we're delighted to have with us professor david menashri from

israel, tel-aviv university, barbara slavin and trudy rubin, and i want to introduce outer who will be the moderator and then listen to the panelists, and then have open questions for the audience and have a full exchange because i know this much is very on everyone's mind. most of you know trudy rubin from the "philadelphia inguyer" and a member of the editorial board. her column appears weekly in the inquirer and runs in other newspapers across the country. she has special expertise on the middle east, russia, and south asia and is a feect --

frequent guest on npr and pbs. before joining the inquirer in december of 1983, trudy was the middle east correspondent for the christian science monitor covering israel and the arab world. we're really very gratified and delighted to have trudy rubin lead this lively and timely discussion. thank you, trudy, and thank you, again, all, for joining us in this conversation. [applause] >> well, it's certainly an opportune time as we've heard. the -- in tehran today, the british embassy was taken over by youthful radicals who for two hours went about trashing the building, but apparently the iranians are not going to

percent a rehash of the hostage episode, and so it now seems as if the place may be -- police may be stepping in, but this just reminds of us how immediate the issue is, as you all know, eni was recently in israel at a time when the headlines were full of debate over whether prime minister benjamin netanyahu and defense minister were or were not urging the cabinet to have a strike on iran, so it's a great privilege for me to introduce the two guests, which i'll do briefly, and then they will be speaking on the issue after which i will ask them questions and then turn the floor over to you. as many of you probably know, david menashri on my left, one of the most distinguished academics on the field of iran, the president of the academic center of law and business, and founding directer of the center

of iranian studies at tel-aviv university. i think you all have his bio. you know of his work, so i'll be brief to give everyone a chance to talk more. barbara slavin to my right, one of the most knowledgeable journalists in the field on iran, a senior fellow at the atlanta counsel south asia foundation, an author of "bitter friends, enemies: iran, the u.s., and the twist the path to confrontation." that says it all, doesn't it? barbara worked for many newspaper starting with the economists latest as assisting managing editor at the "washington times," and so we'll start with barbara who will talk u.s. policy, pros and cons at the moment, and then we will

move to professor menashri taking about iran and israel's point of view, and what is to be done. >> good afternoon. it's great to address this crowd. i know a fair number of people in the audience, and i was just rem necessarying about the good -- remembering the good old days with peter who represented the policy forum and did a great job. back in the days when we had a peace process, i know that you have a commitment to diplomatic solutions to seem -- who that teems intractable problems, and so do i, that may explain my attachment to iran. in my book i wrote a few years ago, i wrote about missed opportunities between the u.s. and iran when george w. bush was president, and i thought, frankly, we reached rock bottom

during his administration, but it looks like that's not the case. unfortunately, things have not progressed. there's obviously fault on both sides. as you all know, president obama devoted a certain amount of time to engagement and pivoted smartly to what's known in washington as the pressure tract, sanctions, sanctions, and more sanctions, and we've seen a steady ratcheting up of the pressures now, but no progress towards a solution. recent comments by u.s. officials are especially disheartening when you consider the early promise of obama. just last week at the brookings institution, tom donaldson gave a speech listing five elements of u.s. policy towards iran. they ranged basically from songses to more -- sanctions to more international operations to the military option, and nowhere did he talk

about real diplomatic engagement. there was a reference to, quote, "keeping the door to diplomacy open," unquote, bracketed in the last point of the military option. it's nots in the mind of the administration. obama and his people are not entirely to blame for this sad state of affairs. there's a curse to the relationship that whenever we are ready to engage, the iranians are ready, and iranians are not ready, and, of course, vice versa. there's a long litany of mutual grievances and missed opportunities back to 1983 and the cue against mossadegh, and under my mind in the bush administration after 9/11 when the iranians then under the

leadership tried every way they knew how to get negotiations started with the united states. every time a read a book, i see another overture through another individual of george w. bush to get him to talk degreely to bush -- directly to bush when they were president. there were talks, as many of you may know on a tactical level in europe from the fall of 2001 until may of 2003, u.s. and iranian diplomats met in paris and discussed afghanistan, al-qaeda, and even talked about iraq until the talks were revealed. i have to admit a little bit of cull pability in this because i wrote a piece on the talks because i was excited, and then immediately after that the bush

administration shut them down because they were embarrassing of talking to an axis member of the evil. there was a may 2003 agenda for talks written by the then iranian ambassador to paris and sent by the swiss to washington where it was read and chuckled over and received no response. there were some talks that took place on iraq, but they department go anywhere. there were efforts by the national security adviser after ahmadinejad was elected president in 2005, and efforts to get talks going with his counterpart in washington, and efforts through the iaea, efforts through the swiss, and i mean, in this case, you say success has thousand fathers and failures, and iran's case, it's the reverse. failure has a thousand fathers

i'm afraid when it comes to the u.s. and iran. we were in a pretty bad situation when obama came in, and at that time, of course, there was considerable anticipation in both washington and tehran this corse was going to be broken, and initially obama made all the right moves. he used respectful language in a persian new year's message that was addressed to the islamic republic of iran to the government as well as the people, and he sent two leaders to supreme leaders in the spring of 2009. as you all know, we had iranian presidential elections then in june 2009. there was rampant fraud. a massive crackdown on peaceful demonstrators, and the situation became much more tricky for both countries. iran was still interested in some sort of negotiation with the united states, but the domestic politics was mori --

mori poisennous. there was an effort, again, 2009, there was a confidence building measure presented initially accepted by the iranians, but it was shot down in tehran by opponents of ahmadinejad who has done an excellent job of making enemies for himself in the iranian political system. there's been two meetings since then between iran and the so-called p5 plus 1, the five members of the u.n. security counsel in germany, but discoer row progress -- zero progress towards the solution. efforts were a made by brazil and turkey which would have sent out quantities of uranium for in exchange for isotopes. it was agreed to by iran of course on the eve of a new

sanctions resolution in going back to the negotiating table. now, obviously, while all of this has been going on, iran has been progressing on its nuclear program, but i still have a rather less alarmist view of the nuclear program perhaps than some even following the iaea report referred to earlier. there's fairly solid reports that iran did research into a nuclear weapon from the late 1990s through 2003. at that time, iran shut down a systematic research effort and what has continued since then have be smaller scale efforts. as far as we know iran has not built any nuclear devices or tested one, and we don't know for sure the leadership made a decision to go forward with nukes, but we're on such a

downward spiral now, the tray -- trajectory of rhetoric is such that i worry very much we're in a bad place. the administration recently announced new sanctions against iran. we already have historic legislation last year that was passed by congress and signed by president obama as well as a very, very tough u.n. resolution, and the iranians are feeling the pain of this, but congress, of course, is not satisfied. they want to cut off all ties with iranian central bank there by making it very, very difficult for iran to sell oil and receive hard currency in return. to think that we can keep adding on sanctions without response, to think that covert and not so covert activities such as these recent explosions outside teheran at a missile facility and another one, we're not sure what the target was,

assassinations of several iranian nuclear scientists, this think one can continue all of this pressure and not see an iranian response in return is, i think, naive, and the business with the regime was a warning shot. i'm afraid we're going down the iraq route, more and more sanctions to decimate the iranian economy and hurt the iranian people frankly more than the regime, and that inetbly could be a -- inevitably be a prelude to military action. at some point they say enough is enough, kick out the iaea, withdrawal from the nuclear no proliferation treaty and go for the bomb we've all been worried they were going to develop. i think we need fresh approaches. one thing i think would be helpful is perhaps have someone on talks with iranians. it's ironic the obama

administration continued this diplomacy that got us nowhere under the bush administration. if you look at the so-called p5 plus one, that's all we've had, and there's been one with bill burns and iranian nuclear negotiator in fall of 2009, 45 minutes they met. that's it for one-on-one with iran since obama came in. i think that should be changed. we have the u.s. election campaign which is so helpful to intelligence foreign policy in this country. we have, apart from ron paul and lately herman cain, of all people, we have the republican candidates competing with each other to see who can be more hawkish. newt gingrich helpful suggests not just destroy the program, but destroy the regime at the same time. i'm sure that was met with great

interest in iran, so, you know, i think we do need some fresh approaches. i suppose they're going to have to wait for the end of our presidential election cycle, and just hope that nothing really terrible happens between now and next november. i can think of a lot of terrible things that could happen between now and next november that would not help to resolve the situation, would make it worse, and could also have a lot of unintended consequences on the region, but we can talk about that in the q&a. thank you very much. [applause] professor menashri. >> thank you. nice to be back with the policy forum. it's a group that i found closer to my views or i'm closer to their views compared to other huge organizations in my

government. i was asked to give a tack about -- a talk about the israeli view, which with permission, i'll limit it to an israeli view. [laughter] i'm not a good person to speak about policy because i really struggled with the -- what i regard as unwise policy of israel, vis-a-vis, iran, and not because iranians are good, but better, i believe, ways to meet the challenge of the iranians other than going public every day, boom, boom, boom iran. i know there's a lot to be on the table, and i know it's a lot you know, so i want to raise three questions and maybe trying to just give you some idea about my thought, my views about things. i want to speak about what is the problem if iran goes nuclear? whose problem it is, and what can be done. i'll try briefly. i think the world should be a

world that we are facing a severe problem if iran goes nuclear, and all signs that iran is on the way to its nuclear, to gain or to be able to reach a point in which they can decide to get the nuclear capabilities. i think it's beyond question or so that there is also some military dimensions to the nuclear problem whether they stop or renew it again. we have 2003 that they -- 2007 that they start in 2003. we have 2011 that they started in 2007, but it's clear that every day the iranian nuclearized site is going to work and do their progress. with all the difficult things that others trying to put on

their way and with all the different difficult objectivities they face in running such a huge program. the problem is, i think, the combination of nuclear capabilities with such a radical regime. i am one of the few israelis who for many years was not that much frightened by the iranian ideology because at the end of the day, iran was more faithful to the states than the ideology. in each individual case, almost, if you check what was ultimately the policy of iran, they always went -- when they had to decide between ideology and interest, they opted for the interest. i don't mean that the leader wakes up in the morning saying, well, what can i do today against ideology? that's not the case. they want to do what they pledged and promised to the people, but when there's a clash

between ideology and interest, and they have to make the call, they usually have been on the pragmatic side of considering the national interest of the state. i think today we're in a new phase. it's not anymore the national interest vis-a-vis versus ideology which now may be in the phase we're confronting a country or talking about a country that all that matter is nos the national interest, but the survival of the regime and the calculation of leadership that is its first priorities to preserve the continuation of the regime may be different than one that's focused on the national interest, and i think that from recently, we are already, in my view, in the phase of not only national interest, but the interest of the ruling e -- elites. if iran goes nuclear, turkey would be nuclear, saudi would

be, egypt would be, others would be. this region is a mad house without the toys in the neighborhood. what happens if all these countries will have it? what is the policy would be of the hezbollah operating under the umbrella of nuclear iran? what's the price of oil in case iran is nuclear? so we -- i think we're confronting a very, very serious issue, and nuclear issue is not just small thing that whether they are will have, not use it, of course, there's difference if they use it or not use it. i live in israel, i know what it means. twenty years ago i was in discussions in israel with the government and would attack israel with missiles. some thought he would not, others thought he would, and he ultimately did. would it be wise for us to give them the rights to make the call to use or not to use?

no doubt in my mind that the best thing is that iran will not have this luxury of having to make the call from here it's clear what i think about whose problem it is. i think this is the problem of the free world, and it's very naive and i think in a way i am angered, but also flattered that everyone asks, well, when israel is going to do the job? forward god's sake, why israel 1234 the iranian nuclear program in case iran has a nuclear program or in the stage that it can by its own will get there, is the problem of the free world including the middle east, including saudi arabia, including europe, of course, also israel. part of the blame that everyone

thinks is the problem of israel is our politicians. they speak all the time about the iranian threat. they make the impression as though it is the only problem of israel, that we -- thank god we know what should be done and ready to do the job. we can tell you at the end of 2008, i was frightened to death that one day president bush would pick up the phone and say, okay, boys, go and do the job, and then what? i think with all of this statements, we signal, we are trying to get ahead, signal to the world that this is exclusive proof israel -- this is exclusive problem of israel. while israel's policy should be it's not only our problem, let others with the capabilities, let the super powers, and we are not, do what needs to be done. it is the problem of the middle

east, problem of saudi arabia, see how scared they are, go to the wikileaks, other sources, see what they think about the iranians, and also the saudis, and then in the newspapers, saudi arabia is willing to give israel rights to fly over the space of saudi arabia do attack the iranian nuclear facility. don't do us a favor, go do it yourself. you're next door to them. why give us the exclusive rights 20 your air space. we don't want to violate it. go and do it. egypt is afraid, saudi arabia is afraid, and others are afraid. the problem is also of europe and beyond europe. it's the problem of the stability of the world, the stability of the middle east with implications of the world, and therefore, i think my answer to the question of whose problem it is, i think it's a problem of

the free world. it is flattering to think that israelis the most important thing in the world. you think it's about israel? we are important country? i tell you how they viewed world. the world was based on two pillars. soviet communism and american capitalism, one of them is gone and the down of the other is soon to comb. islam is the future ideology. ..

people saddam hussein koren ahmadinejad. so again the problem is not solely but even mainly the problem so what can be done. i think there is a lot to be done short of the military power. i don't mind if they say all options are on the table put on the table whatever you want and i wish today there will be the use of military force on this

issue. not by israel or the united states or any other country. i may be 94 optimistic to believe the iranians are open to wisdom were. i was one of the first i hope he will forgive me i was one of the first who spoke in favor of obama's idea of dialogue when he was still a candidate to the presidency and many people ask what do you think about the idea vote for but not because i think there was a chance but i think there is no chance. and you cannot take any measure against iran if you don't start the dialogue first to make sure if it's successful, wonderful. if it's not, at least we know where we stand. the problem is it was not a dialogue it was in between and

right now we have a partner? we don't have a partner. in the midst who it is all the domestic crisis and i think this policy of dialogue hasn't been put to the test. but the dialogue was since i don't think that iran has the final with the united states. i think that those one-on-one dialogue is changed as far as obama is concerned because the dialogue with is the revolution of iran. what remained in the ideology in the united states so you have to bring i think the problem is not obama but with khomeini for

reasons i cannot delve into war right now. you can never tell what is the last straw to break the camel's back so the last straw one day may do the job. what is the pressure? why should i go to the option of a can go to the moral issue of human rights in iran will. what is the world when it comes to the moral issues and human rights of the iranian people? what do you find? what is the european model, what is the unity of the world to pressure iran? after what happened with the british embassy i tell you what i would ask all european countries to return to the ambassador of tehran. this would be a punishment. bring them for christmas or hanukkah for two weeks. get them out of tehran and see

how damaging it would be on them in 1997 after they found the leaders guilty in act of terrorism or the countries with the exception it was a devastating situation and i think it is no coincidence that after he became president is i want to be loved. the prospect of the world. when you will pressure them on human rights, diplomatic pressure they love to come to your country no, the ahmadinejad would not miss an opportunity to come to new york city. each year and his presidency came to the u.s. one and was treated as the head of the state while he is not the head of the state. what the revolutionary guard

will this is a big punishment. you don't punish the people of iran you publish the people to target who are being responsible for the policy of the regime the economic sanctions will i don't think you should mention not much russia, china or other issues that shortly exist as you know it's not that simple for russia and china still backing in a way practically at the policy and after even the iaea statement is to continue to back iran policy and iran is taking advantage of these diversity's and differences in what the world and i think unified it's

not just here of and the united states. it is on the issue of iran and the common policy on iran. of course there is the other measure that can be taken to delay the policy. a unified between the policy of iran going nuclear. maybe -- i recently held one of your heroes in my defense minister saying had he been iranian he would have loved to have nuclear weapons. if you are to be leavitt white you have to speak like this? tell them i think if i were a iranian i think it was very much against the nuclear program because so much money is being spent. i held this from ai iranian professor. how much money was spent? where is my money? in 2009 it is a demonstration

people went to the streets with the slogan where is my work? i volunteer for them and send them with another slogan to go with that and i didn't even charge anything for copyright. where is my oil money? more than 90% of the income of the last century came in the last ten years. where is it? if we are so rich why we are so poor? and believe me there are other ways to pressure. but it is animosity to the outside world and to strengthen themselves inside the country. i fink in short the solution short of military action, to speak wisdom with the iranian people and the iranian government, to prove to them that for their own sake it will be good to put the nuclear program side for a few years, and in the next few years things

may change, the situation may unchanged but one thing i think is crucial is since it is such a radical ideology as long as we see that they have mercy for their own people i think no one in israel will live in a piece when this country would have nuclear weapons even if they follow my view about iran were take the opposite view of iran i think that we would find it very difficult to follow the situation that the decision to use the nuclear weapon would be taken by such a radical regime in the islamic republic of iran. thank you. [applause] >> well, if i -- if i were to summarize what i have heard here i think it would go like thiscolin -- and either of you can correct me if i'm wrong and then i would like to lay it out and ask some questions: what i

have heard is what better chance there might have been for the negotiations -- one-on-one -- is gone. we have an internal struggle inside iran. we have a supreme leader, khamenei, who doesn't want this, even when ahmadinejad seems more amenable it was clear that khomeini was not interested. so, in that situation if we don't want military action we are looking at sanctions, but the economic sanctions so far are not tough enough, and diplomatic sanctions, human-rights, this sounds excellent, but would it be enough to change iran's policy within the time frame work we have before iran was nuclear? and then living in the background is the military issue, and the questions of if there were a military strike by

whomever, would it be effective? i think it is fascinating that until recently the head of the military intelligence said recently in tel aviv something very similar to the professor. he said we have to make it clear to the world that israel was all alone in this game, and there are those who have better operational capabilities than we do, in other words, the israelis recognize that going it alone is not really going to give away the program that much, and so then the question is if the west went with them what it delayed the program enough to make it worth the costs. so that seems to me where we are which is almost no wear. no negotiations. sanctions don't work, and military strike may be too dangerous, so let me start with the question. first of all, let me just ask

professor menashri -- and i'm only going to ask a few and then i will through the floor open to use the six at this point do you feel that the internal conflict in iran effectively ruled out any kind of useful negotiation even say with intermediaries such as turkey and brazil tried to be? >> between the iranian elite, i think next year there will be provincial elections from the last significant until after we saw what kind of connections they had last time, so who cares. the change would be the decision to who is the next supreme leader and will be very crucial. but that's one thing we don't know. we don't know what will happen.

it will come one day but we don't know when. the other thing is when the people of iran will start moving to the new direction. iran is the only country which is the policy has been shaped by the people of iran from the constitutional revolution and the only country which had the constitutional revolution. iran is the only country in the middle east which is the islamic revolution by mentioned the period with the popular uprising and we saw the 2009 limit on medicare. so the iranians in history more than the countries who had never had this kind of mass movement are prone to go to these movements. they tried in 2009 and they were suppressed.

in the least there is a cliche that nothing succeeds like suppression. and the iranians have learned to know that all of suppression rows of better than anyone else. the run-up to the leaders of the opposition. what is that -- and these are not even the position. they are another segment of the ruling elite. it's hard to call them in supposition. within them there are differences. they are more pragmatic and less pragmatic. no one speaks about him anymore and other pragmatic elements view of the foreign relations as a tactic not as a strategy. so we can change the policy if it is neither to advance the growth. today the regime, the people worried power are engaged in their survival with their domestic enemies.

so for them i think it is making all of this noise around the british embassy or other issues is good so what led to the november 4th, 1979 when they occupied the american embassy there was something that strengthened them, strengthened the policy. i don't believe those who say there is no difference between the grain movement and the others. i think there is a difference. i don't care of what regime the iranians want to have. it is entirely their problem. if the on the islamic regime let them have the islamic regime. i care what the policy of the regime and the policy issue to be changed. what i see from khatami doesn't change. a menace of is the first president to become more radical in office than before taking office. usually when you turn to the

president he would be more pragmatic. you have to feed 75 million people. so, this combination of radicals would order refs beyond them it is a good recipe to start i don't think the dialogue is something that isn't on the table anymore. i think it is more likely there will be a dialogue. and i think that the dialogue should be still pursued provided in the dialogue we know and a certain strength time. it is yes and no and then we ask about what question to ask the iranians they always say i'm a teacher teaching at the university. when i give an example to my students i want to be able to grade their answers the answer is clear i know the typical iranian also is between yes,

but-to know, however. [laughter] so you have to bring a direct answer which is something that is difficult for them. >> well, let me follow on that because you have written and spoken about in the past about the mischances for dialogue. do you think there is still a chance and i raise this because everyone has spoken on the chances and military only, but if so, dialogue by whom? who would dare start it and if it can start in this next time frame of elections and internal turmoil in iran, then do we have to look elsewhere for examples to sanction? >> a couple of things. first, you said sanctions are not strong enough. actually i think in some ways they are too strong. i believe with that -- agree

with the professor b8 there should be more attention on the human rights questions. europeans have sanctioned a lot of iranian individuals -- more than the u.s. has -- identifying people who are believed to be responsible for human rights ehud uses. it's very popular in iran and to be to target and focus the sanctions to make them smarter, not done. they are getting dumber. the more they are getting loaded on and on and on the more they are hitting ordinary people some of what you are and i really an american and you want to send money home to your mother in the is on it is almost impossible to find any bank that will handle the transaction even though there is a so-called "humanitarian exception" to sanctions, and if we formerly sanction the bank will be even more difficult. so i think that actually we've gotten carried away with sanctions and become the default option and, you know, that's all they talk about in congress because there is another pro-israel organization for whom it is all they do is write sanctions bills, and you know who i'm talking about.

in terms of whether the dialogue is still possible, obviously it is very difficult because of the divisions, but ahmadinejad came to the u.n. and he repeated three or four times -- i was at one session that he said it -- that iran would stop enriching uranium to 20% u-235 iran got fuel for their research reactor which by the way was provided by the united states and back in the 1960's under the atoms for peace. as far as i know, no one in the u.s. state department or the nsc ever got in touch with iran and said let's talk about this. and i asked some very senior u.s. officials and some encounters i had with them recently has there been any approach? no, no, we are waiting for the p5 plus one. hello, who is the superpower here? we have to wait for the baron as catherine ashton to issue the letter before american diplomats can talk to the iranians? that's why i said we are going right back to the old bush mentality we set preconditions.

the last thing i heard is we will only talk to them if we think they are serious. how are you supposed to find out if they are serious if you don't talk to them? iran has a now relatively former minister. mahmoud ahmadinejad got rid of the last one last year and this one happens to be an mit educated physicist who is comfortable in our culture, who has represented iran at the iaea in vienna. who better to talk to them ali, and are there any efforts going on? leedy there is a little discreet track but to my mind we have this leverage now in the form of the terrible sanctions and so on. we should use them to try to get something going with them. if it doesn't work, okay. the worst that happens is the united states shows once again it is willing to go the extra mile and help solidify the international consensus against the nuclear program. and there's just a small possibility that it might work.

iran is going to have parliamentary elections next year then presidential. a couple of the names that are discussed for the next president of iran one of them tried repeatedly to get the talks going with the u.s. when he was the national security adviser, and i dhaka and a lot of this in my book, and the other one is the mayor of tehran who is also considered to be very pragmatic. he's a pilot who goes every year to france to remain his pilot's license and he goes to switzerland and norway and he is a very worldly type. so don't wait. we always make the mistake of waiting until the elections are over with their elections are over. i don't think we can afford to do that and i think we have to be much more proactive and obama should not be so apologetic about trying to resolve the issue from diplomacy. >> i'm just going to ask one more question on this, and a couple more points.

as you remember there have been instances in the past when people who wanted to talk were reined in the last moment and stopped from talking. i recall the last time i was in tehran i can't get a visa any more. don't know what crime i can read it and i never will know. i was talking to a very senior iranian official who said i don't want to be the one who talks, because whoever that one as is going to suffer for it mightily meaning of the iranian side. because anyone who talks to the americans is than totally vulnerable in the internal politics of iran. so i come back to my question. if we have a timeframe when iran is moving towards at least being able to make a bomb if it wanted to come and if in that timeframe we have elections, which is not the moment when people would take risks, and on the other side, on the iranian side, and

unlikelihood that anyone is going to be able to do anything dramatic even if a hand is out reached, then what? is my promise reasonable? and if so, how we then proceeded to proceed. some of the different actors on the scene -- i think as long as the iranian constitution and the power structure is putting the supreme leader as the head of everything it is very difficult to juxtapose. at the end of the day, he decides, and as long as -- this is the situation -- as long as the associates say if 20 million people will walk one way and he says something else, he's right.

now this is not the western democracy. the islamic republic of iran this is the end of the constitution and this is practical, so i think that we are speaking about the difference is now and there are of course many of them and some of them are nicer than the other. he was quoted i could mention here the chief of staff of iran who went on television recently and stated in the war of 2006 a group of his surgeon's what all of a sudden see on the battlefield paralyzed and couldn't move and on the irony in television by the chief of staff. he said he was asked what happened? why you don't move ahead? don't you see these people riding horses led by the imam

are confronting us? these are the visions and if they can speak like this -- i don't think they are stupid, crazy, nothing, but i think the figure using some of this that doesn't allow to really make a difference, and i tell you for me if there is a chance of dialogue or not unfortunately it doesn't depend on washington. i think it depends on right now the iranians. they have to show the sign that they are willing and i don't know if i missed a part of your -- >> i think you have the answer. now i'm going to go to a floor for the questions. there was a gentleman here. >> would anyone like to discuss antigovernment forces inside iran or outside iran?

and what, if anything, can be done to strengthen them? >> i think the administration is already giving a lot to try to prevent the jamming of voice of america, trying to provide ways for people to get around the fire wall so that the armenians can communicate with each other. i think that there is a vast constituency in the country that would like to see change, but they are weary of going out in the streets again after what happened to them in 2009. and also, not eager to see another bloody revolution like the one they went through in 1979. but they are there and i think one has to have a certain faith in those people and try to tailor policies in such a way that we don't lose the support of the pyrenean people which is why i am a little bit concerned about the direction the sanctions are taking now.

in terms of groups outside, no. there is one called the mujahideen which has been very aggressive in hiring former senior u.s. officials for large speaking of 10,000 to $50,000 a pop, a long list of people, some of whom were quite eminent in their day and they have somehow been convinced with all of this money that this group is worth supporting. it's not. it's a very anti-democratic organization. its leader hasn't been seen since the u.s. invaded iraq in 2003. his wife lives outside of paris and there are about 3,500 members at a sort of camp in iraq called kemp - roth and there is a legitimate concern for what would happen to them that they are not being about to leave, even those who want to

leave have been frustrated sometimes because of the cold like control over them and the international red lacrosse will get access to them and the unhcr also to try to talk to these people and see where they can be resettled. so, we have to be patient. you know, sometimes you don't have to do something. that's how we get ourselves into these terrible policy problems, because we don't -- we can't sit back and be patient for certain things to sort of run their course. i personally am not -- i don't want iran to get a nuclear weapon. but for iran to make that decision and go after the weapon is a very big step and that is why in all of these years they haven't done it even though the program dates back to the 1960's. you know, while since iran started its nuclear program, china, india, pakistan, north korea, israel have all got in the nuclear weapons, while iran, you know, is sort of like a, you

know, the horizon. it's an imaginary line that as you get closer to the eight dits further and further away. the or the developing the material but they still don't have a weapon. so i think we can take a deep breath, you know, and try various means, better enforcement of the export controls against providing materials that iran can use for centrifuges. this is something that we should strengthen. this is less by the u.n. security council, and in fact there has been a good bit of progress. david albright, whose a nuclear expert in washington says that the iranians are having a terrible time getting the kind of steel they need and the carbon fire to build advanced centrifuges. very few sources and those sources have dried up and now there is the ability to go and interdict the shipments that seem mysterious. so, we have some tools and we should use the ones we have. ha shouldn't always feel like we