>> i hope so. it's really up to him. the president in our system is unique, only one person in america back and find something into law and only one person in america can deliver the members of his party to support a deal that he makes. and the speaker and i have tried to engage the president for four

and a half years to tackle the issues of our time, unfunded liabilities, our current debt which is stunning, and i think as part of his responsibility what i hope is sometime in the next three and a half years he will decide to engage in a serious discussion about how to get an outcome to the biggest problem facing the country. we haven't seen that yet but i haven't given up hope. i can't give up hope. it's three enough more years. i had hoped for a different government but we have the one that we have. >> senator, do you have any thoughts about reauthorizing the independent counsel statute so we could get some of these investigations out from under the thumb of epartment of justice?

>> i've joined chris dodd and happily let that expire in the late '90s. i don't think the independent counsel served the country well at all and i would not be in favor of bringing it back there it was one of the post-watergate reforms. most of those have not worked out very well, and i don't think going back to that would be a step in the right direction. >> hello. i meant internet freedom works. i was curious what your thoughts are on the nsa's overreached as far as wiretapping? what are your thoughts on that whole process and how do you think it should be addressed? should continue the way it is or do you think yo need to be reformed? >> i think we would be happy to talk to you about that going to contact my office. i want to talk to things larger related to the subject of my speech, an independeindepende nt counsel in ways related to that because the part of the

post-watergate reforms. any other questions on the topic that we've been talking about this morning? how about right here? >> i just wondered if in relation to public employees unions and your desire to have been scaled back, i wonder if you wanted to comment on what scott walker's accomplishment was and how that can be translated nationally or two other states? >> i think it's been a remarkable success for him. i'm told, i may not have this totally accurate but i'm roughly accurate, that once the employees in wisconsin were given the option of not paying the dues, apparently the support plummeted from somewhere up in the '80s down to in the teens. meaning that i guess the

employees, when basically given the choice of keeping their money and deciding representation was not that important to them. but regardless of whether you have check off or don't, the larger question i wanted to raise today is the question of the appropriateness. that's why i went back to fdr, and i guess it was george meaning in those days. the appropriateness of unions in the public sector because you see in every negotiation there's a missing person you're an innocent person is the taxpayer. the negotiations between today's public official and today's union leader. reaching an agreement to obligate taxpayers in the future. and there's no taxpayer there. so i believe that's why fdr and at least initially be afl-cio felt the unions are appropriate

in the private sector. it's done in a way that companies can try to convince their employees it's a bad idea if they want to, there's an election, secret ballot election. the winners win and the losers accept it, but it seems to me it's fundamental incompatible. if you look at the results of that, the pension problems all across the country, virtually every state and local government is awash in pension problems. you look at her own situation here where you have people who work in the government as of today, actively discouraging and bringing the power of the government down on people who think that federal government is too big, and it strikes me that as i think i quoted john as saying this is a 50 or mistake and it's time to kind of have that discussion again of the appropriateness of unionism in the public sector. unionism and the private sector,

fine. i don't have any problem with that, but i think it's time, because we're suffering the consequences of it. i'm going to take one more and then i'm going to head out. >> my name is david keating. first an observation about norms comment earlier where he talked about social welfare and exclusively. when congress said that that statute in the '50s, there's no evidence that congress intended to exclude political activity. and i wanted your thoughts about this. do political activities where people are trying to improve their government, couldn't that improve the social welfare in our nation? >> obviously that's my view. i think we're to be encouraging this sort of thing, not discouraging, and particularly when we know this whole disclosure came, had nothing to do with anything other than going after your donors.

that's your thing for. they were never offended by this until the last few years when conservatives started doing more of that. all of the sudden this is a fairly recent outrage here. nothing other than getting the names of your donors so you can go after them. we ought to be discouraging that in everywhere we possibly can, and encouraging this kind of participation. my goodness, this kind of involvement we ought to have. and goodness gracious, to have the government itself picking winners and losers in a game of political speech is a true outrage. arthur and, therefore, i appreciate the opportunity to be here. thank you so much. [applause]

[inaudible conversations] >> a discussion on the history of student financial aid and a look at ways to improve the system. and live at 10 a.m. eastern, the u.s. senate continues work on the immigration bill. >> today, the senate banking committee examines private student loans and how they regulate. the committee will hear from the consumer financial protection bureau, fdic, federal reserve, and office of the comptroller of the currency. live tinian eastern on c-span3. >> today, president obama delivers a major speech on his plan to tackle climate change. he will announce executive orders to direct federal agencies to reduce greenhouse gas emissions that cause climate change. live coverage from georgetown

university 1:35 p.m. eastern on c-span3. >> are you grand marshall is an associate professor of constitutional law at john jay college. thanks for joining us. >> thank you. >> a number of rulings on the supreme court as its term winds down but we'll focus in on one. what did the court decide in the fisher versus university of texas case? >> abigail fisher had challenged the failure of the university of texas to admit her and she said it was based on the 14th amendment, equal protection, discriminatory action and their admissions policy which uses race as one factor was discriminatory. and the court today decided that the first part of the admissions process which is to take 10% of the high school classes around the state was fine, but the second one that allowed race to

one component was one in which the lower court had not scrutinized to the highest level possible whether or not there was some race alternative that could've been used in getting the same results without using raise. and so the court sent the case back down to the fifth circuit for further review. >> how did it progress all the way up to the supreme court? >> abigail fisher was one of those high school students who did not meet that 10% requirement. she then applied under the second process which takes a number of different issues or concerns into account. for example, whether or not a student is in a single parent household, if english language the language spoken and all these other factors as well. she still was admitted but she said the cuts one factor was reece petty would the racial factor that prevented her admission and then she said.

>> does this decision have broad implications, or is it just kicking the can down the road to? >> if we are kicking the can down the road, we're taking down the road toward a hall where it will fall and remained there. because at this point what justice kennedy said in reading the decision that he wrote, that we're going back to a time in which the reviewing court, when they decide whether or not raise can be taken into account, get look at whether not there some other race neutral alternative that would produce the same educational benefit of that university. so we are taking race have completely. say we're going to go to the force people into that's one of the things we will use. where is the remedy for the 300 years of racial discrimination suffered by people of color? when we're saying we will not use race and if we can help it, and what we are talking about is the basis of affirmative action. >> justice ginsburg was the only one to dissent, and she read her

descent from the bench. what was your argument? >> her argument basically was that that 10% of the high school is a race conscious program only you're not allowed the use race. but she even said but for the de facto race discrimination that taxes have practiced for hundreds of years we would need a 10% high school program. so why deny that race is a factor just by not using the word race when you know that's a reason for having these programs in the first place. >> what could we see happen next? >> what will happen next is that the admission programs around the country will hold their breath waiting for the fifth circuit to determine if there is any other way to get the same level of diversity without using race as even one single factor in all of the admissions process. >> decisions and other major cases are expected this week. we will cover those rulings on the c-span networks are gloria browne-marshall, thanks for your

help today. >> thank you. >> the american enterprise institute held a daylong conference on student financial aid on monday. next, government officials and education experts on the history of student aid policies and how they evolved through the years. this is about 90 minutes. >> good morning, everybody. it's two minutes after nine. i want to give us on schedule. i'm andrew kelly, resident scholar here at the american enterprise institute and the founding director of the center for higher education reform. and i'm thrilled have you on behalf of my colleague and coeditor, sara goldrick-rab, professor at university of medicine wisconsin. we want to welcome you to reinvented financial aid, the trillion dollar question. we are thrilled to have you all

the. we have a great lineup of authors and discussants. the papers are outside, nine new pieces of research on reforming financial aid and the opportunities to do so, the obstacles that stand in way, and said interesting new ideas how to make these programs better. so first let me thank the authors for providing with great pieces. uk did wonderful job. one of the things they are and i set out to do with this roster of folks was to bring some new voices into the conversation, some folks that are not always as prominent in the d.c. debates are the d.c. folks tend to block and tweet a lot to each other but not to notice what's going on in academia a lot. we are really, really happy to have some really talented young academics. and some folks have been at this for a long time. [laughter] the first panel specifically -- yes? [inaudible] >> the first panel in particul particular. so we really appreciate them and

a thanks to our discussants quickly before we get started. so just some quick housecleaning notes, just quickly. the papers are able out the. please turn your cell phones to vibrate before we starts we can get that out of the way. you can get on the wireless. there's information about how to get on the wireless if you want to tweak and blog and whatever else you going to do, e-mail. and the important times tremendous lunch is at five after 12 and go be a wine and cheese reception, the best part of it at 5:00 in the evening. and i would also like to take a minute to thank the gates foundation for their generous support of this project and a program officer in particular has been incredibly helpful and openness thing for the project. so thank you to them for that. so i've been told that the most important thing to get across in my introductory remarks is the hashtag for live tweeting. so the hashtag is there.

it is reinvent -- it is apropos to talk about hashtags come to start with hashtags because the origins of this project for me with this hashtag which was a popular last year but it has become popular again this year. it is of course the hashtag rooted to the fight over the student loan interest rate. it went on last year or about four or five months but it's going on industry. in classic congressional pressure we're still dealing with the question we should have settled months ago. what jumped out me about that debate and about the current debate still is that we spend so much of our time in quote unquote higher on education -- quote unquote higher education calls making these issues which are important but their technical questions and they're susceptible to short-term, short fixes, things we can hammer out instead of thinking about the structural issues that underlie a lot of the financial aid

programs. so i went to syri sara and i sat sort of frustrating that we don't tend to actually ever launch a comprehensive systematic reform agenda in financial aid. we kind of do this opportunistic policymaking. we go from one point to the next. we make policy based on deadlines and politics rather than good research. and sara said, you know, we don't agree on very much but think we agree on that. [laughter] so great common ground for a project. and i have some slight but i will flip through them quickly or to give you guys a sense of why we're here. why do we need to reinvent the system lacks we're going to talk a lot today about some opportunities for reform. we're not going to talk as much a think about some of the problems with the criticisms i thought i i would lay out a few those. we have made big new investments in financial it over the years,

as i said policymakers are content to think with these things and the questions on the underlying assumption that were made 40 years ago in some cases. and now, of course, programs that were great in the 1960 to promote access, we are asking them -- a totally different question, it's a new policy goal. and yet we are sort of take our existing stable of policy and we say huck we rent them up and make them better rather than revisiting the question of how their design in the first place. as you all know pell grants spending is gone through the roof recently. programs have gotten bigger but not necessarily better. the purchasing power has gone down of the pell grant because tuition prices have gone up. we've given out lots more money in student loans, but we wound up settling the lowest income, lowest wealth households with those student loan debt. not only that but this is sort of the kicker for me. this is from -- the gap widens

over time between socioeconomic groups. there's something going on here. we're not solving the problems that we first set out to solve. the world has changed and is the. i just was looking at some numbers yesterday. actually a david mundel's request, or suggestion, do you think about how the financing of higher education has changed over the years. so on the left i just 1981-82 as an arbitrary date to start. on the left you have sort of physics from the air and then today. what you see really is that the federal government has essentially become a code equal partner if not the dominating partner in financing higher education. that was usually state responsibility typically, and the federal government has sort of taken more of this on. this is a new world but policies have not changed to keep pace with it.

and to meeting the demands required new thinking. and defense have very little control over institutions or states, i mean what's remarkable is to think about the k-12 space where the federal government gives maximum about 10-12% of the money to k-12 schools and yet the schools were all told to test their students in third and eighth grade on reading and math. and they did it. in contrast the federal government has tons of money to hire at and ask very little in return from institutions or from states. and again we're also not asking how they can complete, remote completion. so how can we redesigned our progress for a better system improvement. this is my jaundiced view of the typical response to financial aid reform but i think it's pretty accurate to we tend to live new programs on top of existing ones. we have a fixation on some of

these symbolic of us like the maximum pell grant and the student loan interest rate. that was made most clear to me when we sacrifice the somerville which is an interesting element of the pell grants program to know to maintain the pell. interest group agendas conflict with efforts to reform. they are generally sort of risk averse and they like to keep the status quo intact for fear of something that would be worse. we haven't done her homework. this sort of our center and i started, so from every year from welfare to job training and start we have done serious federal level is valuations and projects. we embarked on a research and development agenda, but we haven't really done it in higher education, right? there's no such thing as a randomized study of pell grant for student loans. so we have to build a more sustainable system and this is where the book is supposed to

take us, the set of chapters. we need to sustain commitment to policy develop, expectation and research. it's got to revisit the underlying assumptions we made a long time ago about his progress. it's got to test innovations and program design and they should improve our understanding of how people behave in response to different types of aid and different programs. so that's the goal today and i just want to say lastly, the gates foundation did a project called reimagining a development, design deliver and as part of on those projects, 14 papers, maybe 15. i want to say this is distinct from that project in particular. this is designed to inform come to lay the groundwork for the higher education act reauthorization for the coming 10 to 15 years from now but we have to start the process now. i find them ask the questions how can we tweet these programs and change them and how might that change people's behavior? we don't know because we haven't done the work. women done our homework. we have to start the process now and that's the goal of this set of papers.

is to lay some new ideas and to get started on that work. so here's the agenda. you've got in front you i'm headed off to sara, my coeditor and often twitter adversary for her introduction. thank you. [applause] >> good morning. i want to start by thanking andrew. this is been indeed a very unique collaboration for those of you who know us that makes complete sense but for those of us who don't know if we do come at the world from completely different places as do i and the american enterprise institute. so this experience of co-editing a volume with aei what has been one of the biggest growing experiences in my group thus far and i encourage you all to have the opportunity to seize the opportunity at some point to stretch be on your usual spaces and open your mind. and hope you can do that with us today because we're trying to

put gather a book you that will help people are trying to understand and think in new ways about student aid to have the groundwork for doing that. and the degree to which this book turns out to be something that is worth doing will also depend on your contributions today. and in how you provide feedback to us on what is really truly a draft set of papers to so we're going to begin the panel today by going back to the future. lessons from a half century of financial a policy. i think you have an '80s obsession with your share and us back to the future over here. and actually i'm going to introduce our first set of authors. our first author is david mundel and this was one of the people that i was really intent on having here today because as i've done my work in student financial aid, david is one of those people that makes himself known to you and then makes it very clear that his value in the

conversation would be tremendous but because he knows what happened to a private meeting of anglican rather than interpreted. it is expensive and that's in kabul. so you newspaper for us building a foundation of actionable knowledge can research that can improve the performs of federal student aid policies and that's a collaboration with lee hanson, think is in the audience today. where are you, lee? maybe not. i think easier summer so play he will turn out. david an infinite research consultant at this point and i prior to become intimate research consultant he was a professor and senior executives and federal and local government organizations. and he's written a variety of pieces on student financial aid. you probably know his piece he wrote for the college board on what we know about the index of grants to costumes and also some pieces he has done for the brookings institution. joining david is daniel madelan. iyesterday at first called the politics of student aid.

he began his federal group with u.s. department of education in 1978 as a program analyst in the campus-based student aid program area. he retired last year as a senior director of strategic -- in the office of postsecondary education. also between february 2009-jul february 2009-july 20 in a was the acting assistant secretary for post-education. someone who can inform us about how things work in washington and make sure that we don't let the conversation diverge too far from those important details. we have two very distinct discussant. first we have witnessed sandy baum, an independent higher education policy and analyst in the sole of one of the most important people in this space. she's a senior the of the george washington university graduate school of education and human development and professor emeritus of economics at skidmore college. she's doing a variety of work right now in higher education space including with hcm

stretches, the institute for higher education, the college board. and you also sure i know about rethinking student aid, the study group she chairs with the college board. then we have died in jones and she's a senior vice president for extra and greg george affairs for the career education corporation and president of the career education scholarship fund. previously she has served as the assistant secretary for forced education -- and program director afghanistan of an deputy to the associate director for science at the white house office of science and technology policy. this is quite a group of folks. will proceed in order in which a just introduce them. we will have two papers, to discuss its. i may post a question or two and then we'll open it up. so take it away, david. >> just to prove that all people

can continue to stand up -- [laughter] i want to thank andrew answer for the opportunity for lee and i to spend time together thinking about, i shouldn't say this, what represents about 90 years of work in this domain. that's not from each of us 90 years. this is combining the two of us. and we have enjoyed this. we hope that this reassessment can help lay the groundwork, as andrew said, for the next, the next 10 years, or from reauthorization 10 years in the future. i don't know if i can guarantee that lee and i will not be active in that debate, but i would make a lot of bets. really what we're talking about

are some strategies for increasing our knowledge in the short run and the long run. not to replace politics, but to contribute to the political resolution of these issues. as we thought about this paper, we thought a little bit about this issue of reinventing and i tend to think we're in the business of reinventing says or suggests we're going to go back and try again, where as invention is, as webster says, to devise or designing my imagination, ingenious thinking, and extreme edition. i think we are in the invention business and not simply reinventing what i worked on, first with president johnson. that's not andrew johnson.

[laughter] so we're inventing and we're trying to improve. and we're trying to do this by creating actionable knowledge. and i chose a word which will remind you of the military phrase, actionable intelligence. i believe actionable knowledge is what we should have. that's knowledge that allows us to make decisions to take actions which will improve the performance of something. it's not knowledge for knowledge's sake. this is fashionable in the military and foreign policy, and it should be fashionable in our domain. as we search for this actionable knowledge to guide our invention, i think there's really a series of things or concerns that should guide us.

andrew mentioned the disappointing performance and the fact that we don't really understand why the performance has been so disappointing. and andrew also mentioned contextual changes the environment has changed, it has changed since i started working on this in 1967, and it will change again. and it may change tomorrow. and as dan will talk about, and our knowledge will play a role in highly political and highly bureaucratic situations. those processes will drive the use and the implementation of our findings. these processes are tilted towards stability, biased against the change, for perfectly good reasons. that doesn't mean that there are barriers, but it means we have to understand the environment into which our knowledge is

flowing. this research needs to be focused on three sets of problems. we spent a lot of time over the last 40 plus years looking at market failures and market problems. how do we give people money, how do we give people information, how do we give students encouragement, how do we simplify the fafsa? those problems deserve to be a continuous, a continuing focus for our attention. but we also need to look more carefully at some nonmarket problems. for example, how do families operate and how does a student aid potential influence the way families encourage, reward, or discourage college attendance ask families are not a market institutions. similarly, middle and high

schools, they played a key role in training and educating. they play a key role in counseling students, particularly students who are not already oriented towards college when they come out of the bassinet. and yet student aid almost entirely ignores these institutions, and these are organizations that have to be input. similarly, colleges and states, as andrew said, student aid has required a very much, and influenced very little about colleges and states. this is at great cost. if you want to improve performance, we need to think about how aid programs influence and interact with college behaviors and all sorts of college behavior, and state behaviors. and we've already dealt with some of the contextual changes.

why do we know so little, someone would ask me, you've been working on this for almost 45 years, and use don't know anything, or know very little. and i think there are a series of reasons which fall into the class of where we fought and how we've looked -- where we've looked at how we look. we've looked at the marketplace and we have adored in the research world several other important issues. we have focused on problems we understand and for which we have data. those, in general, the problems we understand and have dated him and for which we have data are very limited set of the problems. it's easier to write papers. it easier to do research. it's easier to have empirical form results when we focus on these problems, but it's not easier to improve policy.

and third, my own private hobbyhorse, we have searched for certainty. you could call it statistical significance. you could call it proof, et cetera it's out of. we search for certainty in the field that has lots of noise, and lots of uncertainty and lots of randomness. and every time we see that, we say we haven't observed anything, there is no effect. the search for certainty in an arena where certainty doesn't exist is a serious mistake. and we've chosen to look in a very narrow range of ways. for example, there is very little research on higher education student aid that deals with theory and hypothesis to build on, and get everyone to understand organizations and institutions, we need to build

the theory. we may not be able to move ahead with theory alone, but in the absence of theory we will always know very little. second, we need to engage in the link process of design and prototyping. we cannot separate design a policy based on research, write it into law, write it into regulations, and then operate it and believe it's going to be successful. we need to go through the learning process of trial and error, design, and prototyping. and third, the research community has to be involved in program monitoring and assessment. this we have to get into the nuts and bolts as to what is happening on the ground with regard to the programs we designed at the federal level. absence of that knowledge

pashtun absence that knowledge we will simply be blind blind. and, frankly, i think we've been flying blind a few too many years. and what are some potential targets? there are plenty of them. there are tons of targets for research. i put forth in the paper i just about eight. i think three deserve some mention. we just expanded the hell programs and loan programs very significant way. we need to assess than before -- health programs. we need to understand what that expansion and the time of economic uncertainty and demise, what that expansion did and what it didn't do. and this data is available now and it will be valuable if we use it now. we have to understand institutions and governments come and we have to understand as sara and if you other people's work are trying to

understand. we have to understand how these programs influence not only access and choice and affordability but also persistence and completion and success. how does a student aid now influence that, and how might we reorient student aid so that it can play an influential role in this? because these are outcomes. as i look to the future i think a focused research program, or a focus researched development test, assessment, monitoring and prototyping and retesting program can play a substantial role in affecting the future of these programs. can.

it won't play a role in less two things happen. one, as researchers we focus on creating knowledge that can play a role and presenting it in a way that it can be understood, heard, debated by our colleagues in the operational world, in the government world, and in, let's say family support world. we need to present it. we need to engage. politics is not a barrier. it is a constraint. it's not a barrier. we as researchers are in a fair bit one would say in the order of 80%, we are responsible for the fact that our research isn't used.

one, we haven't looked at problems that are interesting to policymakers your two, we haven't communicated well, and three, in many cases we've looked down at politics as causing the bad outcomes. you know, we can complain for another 40 years, or we can get into that fray, not just the academic politics for a, but the student aid politics for a, and operate within it. we can make a difference. thank you. [applause] >> first, i want to thank andrew for inviting me here today. i met andrew i guess i'll little earlier this year, last year, whenever it was.

we were working on one of the gates projects, and in particular for hcm. i was very pleased to find a young man who is interested in this topic, and, and you know, encouraged, encouraged him to get his friends on board as well. but i guess part of come over that period of time we were working together i would just sort of my normal act is to share some stories about what i had observed, what i participated in, what i'd seen in 30 plus years at the education department, through a series of escalating positions, if you will, of responsibility. and so andrew came to me a few months ago and said, you've got some great stories, can you write them down? so that's what i tried to do in

this particular section of the book. so i call it the politics of student aid, and there really is a lot of political action, if you will, around the student aid programs. you know, some of it is directed by where i worked in the administration. more recently, more directed by the administration in terms of various policies. but a good place to start is with the players who are involved, and, obviously, the executive branch is a key player, especially over the past 20 years or so now i guess when presumably it began to poll we well, you know, that families and their concerns about

financing education, higher education, begin to get the attention of local leaders in the country. we saw pretty much, or i saw, again this is what i saw, a beginning in the first clinton administration of thinking more at very high levels about financial aid policy, and continuing through the subsequent administrations as well. a big chunk of this has been pell grants. but again, i think the concerns from ordinary americans making their way to political leadership and realization that something ought to be done. of course, congress a major player within the policy developments arena. i can think back more than 20 years ago where congress was pretty much a player in the

policy development arena. that was largely because the administration at that time was not particularly interested in student aid issues. in fact, we were in a period at that time where the administration was advancing its policy proposals not as part of a periodic review of the higher education authorities but rather as an ongoing annual process as part of the annual budget request, significant program policy proposals, changes, modifications being proposed to the annual budget process. and you know, again about had a tendency to shift the focus for policy development, consciously or not, towards the legislative branch. i think that was perhaps culminated in 1986 where basically the administration got out that reauthorization.

in those days, again, we were advancing policy proposals and go to the budget process, and we had already, the department had already said pretty much all it needed to say, and december years leading up to reauthorization in 1986. basically the administration sat it out. of course, interest groups are very important in advancing, or at least from the executive's point of view, the executive branch point of view in advancing policy proposals. we were at the department always interested in getting the traditional higher education advocates, the one dupont crowd as some refer to them, as well as another significant advocacy group which they themselves refer to themselves as team felt, basically the

lenders, the guaranty agencies, the secondary markets, alone services, guaranteed agency services. all of the actors within the family education loan program. again, with very common interests, and advocating both to the administration as well as the congress for policies that were advantageous to them and their constituents, student loan borrowers. and i guess not so much a player but maybe sort of -- the program, it's more recently has become much more important as we have tended to focus on maximum grants in the pell grants program, focus on sufficient resources to take care of the periodic funding shortfalls that we experience in the program, less about what the program is

doing, more about making sure that the program has sufficient resources to do whatever is that it is doing. so again, has really, certainly in the past, you know, dozen years or so, to really sort of dominate the student loan policy discussion, resource levels for the pell grants program both abroad, the program as hell, the budget authority as well as maintaining and increasing at a maintain -- minute maintain and often increasing the maximum grant of the program. now, most of these with apologies to scott adams, change is good, but you go first. what i try to do in my chapter of the book is talk about how

you might get things accomplished. a lot of the papers that we have your talk about what needs to be accomplished. i'm hopeful that maybe with a couple of examples from my experience that folks will be able to recognize when the conditions, when the environment is conducive for modification, for reform, for change. and then take advantage of those kinds of opportunities. so there have been several in the past, you know, window of opportunity, expansion of the direct loan program. recall that the george h.w. bush administration was very supportive of a direct loan program and the fact that we the pilot and the 1992 amendments that provided for i think up to 4% of loan volume through a direct lending kind of

environment. the new administration in 1993 took advantage of the coincidence of three separate events. one was the change in budget scoring, federal credit reform act where basically you just had to put on the books the value of the subsidies, not the entire principle. in the olden days if the government wanted to lend $100 they had to find budget authority for the underdogs even if that would be repaid with interest. under federal credit reform act you just account for the subsidies. therefore, directly me, guaranteed lending equal to budget floating. the administration, or the kennedy -- talk about national service and that we should not have circumstance where salaries determined kind of your post,

school postcollege employment options. and so the notion of income intentions loans. but we had a pilot program back in 86 for income contingent loans where we learned one thing, which was that people are very reluctant today whether incomes are. so it really called for a third party independent verification of income, irs information or a whole loatall easy to use that e 100, the federal government, as opposed to thousands of lenders. so that's too. number three was a recognition that deficits were becoming concerned and properly structured direct loan program could produce revenues that it therefore could be used to reduce the deficit. in fact, with the student loan reform active may not have the numbers right but roughly $6 billion in savings. i think we give 2 billion to deficit reduction and basically 4 billion distance in reduced

fees and interest rates. presidential leadership, if you want to get something done, pretty much get your guy elected and go to work. the tax credits for higher education, hope and lifetime learning in the second part of the second term of the clinton administration. i think of this as anything but my friend david mundel reminds me, i think back in 1913, income tax when the constitution was amended that was of course tuition tax credits -- >> you're going way too far off that. >> okay, 1970s. leadership very successful in pushing through, new to me, program of higher education, tuition tax credits. quick lesson from the past. back in 1992 amendments, i mentioned we sat out the 96 amendments to secretary was

reportedly embarrassed by that, and wanted to have the first proposal up to the hill in time for the 1991 amendments. and, in fact, that happens. we did have an intro process set up of a number of workgroups, and it, kind of a bubble up approach to making recommendations to senior political and career officers that ultimately made its way into what i call a fully formed legislative proposal to reauthorize the higher education act of 1992. the department did have the first proposal up there in 1991. and i mentioned already the various advocacy groups and how they can be helpful. and more recently again, the

budget process as the means to advance policies, most particularly budget reconciliation bills to advance proposals, especially through the latter half of the 2000s, to increase the value of the pell grants maximum, to also create a couple new grant programs, academic competitiveness, national smart grants but it never really took off and, but again our part of that not being perhaps the contemplative evaluative ongoing process of associate with reauthorization's but rather a kind of what can we do now within the resource base that we have available today. so that was again in the context of the pell grants maximum award and how that has largely in recent years has been the focus of what we generally call

student aid policy. and my time is up. [applause] >> so, thank you both. it's great to have two vice people with many years of experience in student aid policy, and that add to that group of older people. we have two very different papers here from two very different people, but both of them are focused on the challenge of implementing effective student a policies. in the past and in the future. it's actually a little bit depressing, you think we're all working so hard on this, for such a long time, where are we, what are we going to do? and fundamentally what they seem to be saying is that we have a political in firemen issued and it's not just today's obvious difficult political empowerment but the political environment is always difficult. but also we have a lack of solid evidence about what will really

work and we have unbelievable attachment to the status quo. that attachment to the status quo is a theme that they both sound and i think it is a really important one. dan is more focused on talent as recent history and hoping that we can learn on the lessons from the past. and david is focused on both the dearth of reliable evidence about policies that were, and on the failure to come other possible to pay attention of the evidence that does exist. so this is sort of depressing but we haven't figured out how to do this, and i'm not sure that they give us enough in terms of how we should move forward. so clearly what we needed a cigarette how to overcome these problems and i would like to see more suggestions about how to do that. but that's not necessary their purpose. and said the purpose is to explore the different groups and interests involved in making student aid policy and the political challenges it and i

think the point that it's really difficult to get rid of anything so just keep adding things and we keep having whatever, whether works not because are not quite sure whether it works, we just keep adding new things. i think the issue of the importance of maintaining the maximum pell grants, this is really important thing for all of us to grapple with. that an interest we have us want local number, this is what we focus on and that's the same with a single and interest rates. of course, it's not really in the interest of students. and i think that the advocacy committee have to think a lot about this. i know that personally as i get involved in projects that are designed to put forth ideas for a long-term reform and and not what's going to happen tomorrow, the number of people who just want to know who's going to lose a dollar. you know, and yes, somebody will is a dollar and sometimes it's actually better for somebody to lose a dollar because not every dollar is well spent. people don't want to know that. if you look at the history of

advocacy positions, i think it, it's important for us to be think about that. remember back to the advocacy community not being in favor of giving the money to students in the first place, and now start suggesting we take away the pell grants program and give them ann directly to institutions, we see something very different. i do think i'm more optimistic about what we've been doing. i think the reason projects funded by the gates foundation are an attempt to sort of shake that establish community and get them to say something other than we need more money. i do think that people are starting to question different kinds of policy reforms. dana mentioned a couple. i think bob's success in getting this repayment plan implemented is an important example of how we have researched and with movement and the policy community. we have history and we now have a really important programs there. one answer to how we could get

better policies might be better evidence about what works. and that's what's driving david crazy. that there's not much evidence, not much evidence out there. i think though that there's more evidence than he suggests and i think that maybe there's not quite so much blame to go around. i think yes, researchers can do different things and policymakers could do different things. everybody could, researchers know the important question and i think a lot of research has looked at those questions. i'm not sure we need to ask to academic researchers to be the people who translate because i'm an economist and a note you don't really want most of my colleagues in the profession to be the voice to the public. so we each of us has a different role. i spent a lot of time trying to bridge that gap. one other very important contributions that david makes

us is focuse focus on differents of research but i do think that we need randomize randomized tr. we need to have really solid evidence about causation, but we not going to do these experiments and randomly assign some people not to get pell grants. we're not going to do that and we shouldn't do that. when we do these trials we find out how a very specific policy works in a very specific and five at a specific time with a specific population. were not going to be able to generalize that unless we do more broad thinking. so david is right that we need to think more broadly about the kind of research that will be helpful and how to move forward even if we don't have definitive proof. we still have to solid analytical evidence. i do think there's some things we're doing right then they deserve more credit. for example, we'll know that it would be better if more low income students went to more selective colleges, with more resources but effect many colleges are doing a lot to try to attract those students. we have much bigger problems,

and so we need to think more broadly about all of these issues rather than just saying it's what institutions are doing wrong. we have been looking a lot -- have been working a lot through the gates foundation on projects on behavioral economics and what we can add to our understanding of student aid and not just today but college access and success through looking at really how students and families respond to things. so we do know a lot about that and we have to incorporate that into our discussions. so i think really both of these papers give us a lot to think about. but i think that we're moving more in a positive direction than i think maybe they would suggest. and i really want to know how to move forward to part of how we can afford is what they can tell us. ..

>> he was wise and thoughtful, and he had a memory like nobody i've ever met to remember what happened the time before and the time before and the time before. so i think i his pape i were show -- paper shows the kind of expertise he brings to his job, and i think he did a great job of talking about the history and politicization of higher ed policy. i think, you know, i've worked at community colleges, at elite institutions and proprietary institutions, and i've also worked on the hill at the white house, at two federal agencies,

and i guess the conclusion i've come to is if you think the politics of capitol hill are ugly, then you haven't worked in higher ed. before we start slinging it at the hill, i say we need to take a hard look at ourselves, because the politics we bring to this conversation, you know, a lot of this conversation is driven by elite institutions that want to maintain their status, their lion's share of the funding, their selectivity and their ability to attract resources toward middle income and upper income students. and i think that danny made that point in husband paper, and it's -- in his paper, and it's true. we've seen a shift in higher ed policy since the '60s where more and more dollars are being directed to lower income and middle income students so they can have choice. so we have upper income students a policy that drives choice. we want to be able to give you the loan money you need to pick

the college of your dreams, but we still hear at the other end for low income students is, well, you know, for you community college is a great opportunity. now, i spent 13 years at a community college. i think they're fabulous opportunities. i loved my 13 years at a community college, and i highly recommend them. but they are not the only answer for everybody, and they certainly are not the only answer for low income students. and so i think that low income students should have just as much opportunity to choose the institution that's right for them as upper income students have. so i think we have two distinct policies, and then the other, on the other hand, you know, everybody and their brother asks community colleges to do everything and then underresources them to do those things. so community colleges have to do everything from work force development to teacher professional development to remedial ed, and yet, you know, i'd like to see a day when they get $90,000 per student in the way princeton did.

so, you know, i think there's a lot of pommics -- politics in this conversation that have nothing to do with people on capitol hill. i guess maybe where, you know, i'm the skunk at the garden party here is that i don't think our financial aid policies have been a failure. in fact, i think they've been a ginormous success. how many of you in this room could not have gone to college were it not for pell grants or loans? i'm one of those, i suspect there are others. the growth of the pell program at, you know, $38 billion is evidence that it's working, and the fact that 50% of the students receiving pell grants are nontraditional students is evidence that it's working. those students wouldn't have dreamed of going to college 20 or 30 years ago. so, you know, the policy is driving access, there's no doubt about that. now, why is the policy not changing behavior at middle school and high school level? because students in middle school and high school have no idea how much money will be

theirs for the taking when the time comes, nor do they know how much the institution that they like is going to cost, nor do they have any clue whether or not they'll get into the institution of their choice which includes the local state college which when i went to school in the '80s had the fog and mirror test, right? i mean, many, many public institutions basically said if you live in the state and you're breathing, you get to come here, and we'll educate you. and now those same schools have a 3.8 gpa requirement which means you have students whose participants have saved money, the kid can't get into the local state college, and now they're paying out-of-state tuition at another that's no better or worse. i do think we have accomplished access. we're never going to accomplish behavior changes until we can give people predictability about how much money they're going to get not just in middle school, but the day they start college.

as danny talks about, the politics of giving people predictability are enormous because the cost is enormous. you give somebody -- you tell somebody in the eighth grade how much they're going to get five years from now, and their income could shift so that they really aren't eligible for that much. so it could cost you a lot to give people information in advance. but on the other hand, maybe if you gave people that information, they'd be more dedicated about being prepared for college and get through more quickly. similarly, if at the beginning of college you were able to say, you know what? you've got six years, you've got $30,000 in a loan account, $30,000 in grants, have at it, and if you don't finish, you've got to apply all over again. so i think if we gave people information up front about how much they had to work with and they knew it was going to be there every year as long as they finished in five years or six years, i think we would motivate certain behaviors. right now we have a system where

nobody can predict from one year to the next. and while it's true we continue to tweak the student aid system instead of reforming it, good luck if you're an institution trying to figure out how to package students when there's the constant sea change, or good luck being that eighth grader trying to predict the future if every year you have a cop instant change in the future. if what we want to drive is behavior in middle school and high school, we're going to have to eat the cost of telling people very early on how much money is available to them. in terms of research, i don't think we have any evidence to work with because right now whether it's bps or ipeds, you're only looking at students who graduate in a six-year time frame, and in ipeds you're only looking at first-time full-time. that's 25% of the students in the state system right now. so we don't have any data. and if we know that it takes the average traditional full-time student five years to complete a

bachelor's, why would we not think it's going to take ten years then for a nontraditional student who goes part time? and why do we not follow students as they transfer? i know that community colleges, for example, have a much higher success rate than 11% or 13% or whatever figure they've been given because they transfer students, and they transfer students sometimes before those students graduate or we were an associate's degree, and that is a success story if they go tw on to get a bachelor's, and yet we don't track that. if we're going to hook at data, we've got to track the students for a longer period of time, and we have to look at things beyond the first job. we used to say higher ed is about building communities, improving families, improving personal health, improving the reality that the next generation's more likely to go to college, that people with a college education are more civically engaged. and we have public loan forgiveness to tell rich kids you can work in a hoe-wage jobs

and then we look at poor kids and say you better get a good job with a good wage. final thing, and this is going to make a lot of people squirm in their seat. i think we allowed institutions participating in the program to be selective. i think if we really want to level the playing field and we really want to look at who's best, we've got to look at every institution and say you know what? you have to admit by lottery, take who you get and produce great outcomes because, you know, for selective institutions if you're so good, then stop taking kids with perfect sa, thes and perfect gpas and cherry picking the ten low income students you take. take anybody who will cross your threshold and improve them. then we have a -- then we can have a national conversation about improving the field. [applause] >> okay. what a great panel. i'm going to go ahead and pose one question just so we can allow our authors to respond

just a tine bit. i want to ask you all, it seems to me that it would be good to get on the table a definition in your mind and in 30 seconds, okay? i was going to ask you in 140 characters, but i don't think twitter is your speed. [laughter] >> that's because we're old. [laughter] what does success look like? if the program was working, how would we know? who wants to start? can you push the button, please? >> push my buttons enough. he thinks i started in 1913. give me a break. how would we know this program works, okay? we have -- or these sets of programs work. we have very unequal college-going rates. we should be able to see them

change, and they should have changed more. we have very uneven institutional performance. partly it's the goals, a lot of it is is the underresourcing. and we should ask whether that performance, the unequal performance has been exacerbated by the way we've funded, that we -- the federal government -- has funded this enterprise. i would see changes when i went to my -- sorry about this -- i went to my 50th high school reunion last year. and i went into the library where a bunch of seniors were having their pictures taken for the yearbook. and i went over to a table of five young women who were, you know, getting appropriately

beautiful for their high school pictures as if they would be ever seen. but, um, and i asked them because i'm a father of this, i asked them any of you know about the pell program? one student did, had heard the name. these are seniors in a high school where a fair number of kids go to school, go to college. one of them knew about the program and was quite adept at describing it as a loan. the other five had no idea that it existed. okay? to the extent that this money is uncertain, unknown ander terriby complex in its distribution and its annual renewal, i'm an operational person. i ran local agencies. i know it doesn't work.

i don't need more evidence. and i think we could do, i think we could do -- my friend sandy described me as depressing and driven crazy, but the antidepressants are working, so it's only the other psychotic events. but, excuse me, but forbe darn it, this program with its current resources, this set of programs ought to be four times as effective in changing behaviors. >> okay. so i just want to quickly summarize. i hear you say people should be aware of it, less inequality in outcomes and less variation across institutions. does anybody want to add to the list or disagree? i'm sure one -- sandy. >> i just think it's not that it works or doesn't work, we have to stop saying that the pell grant working means that we have no inequality in educational

opportunity in our society. the program is not going to solve all of our problems, it can't be expected to, and we have to look at the way it works where it is improving college access, college affordable, college completion, not whether we still live in an unequal society, because we do. >> right. so we're talking about change. anybody else have anything -- >> well, the -- >> and then diane. >> one of the, you know, one of the measures that we had talked about, you know, over the years back in the department is that with respect to, you know, showing the effectiveness or success of the pell grant program is that you look at the outcomes various educational and other outcomes for lower income pell-aided students compared to those same outcomes for middle and sightly moderate -- slightly moderate upper income nonrecipients. and when those outcomes tend to

be similar, then you can make a pretty strong case that your pell grant program is successful. >> okay. diane? >> and i think that approach just introduces too many variables. i mean, i think the way you know your pell program works is you look at a group of low income students who had a pell grant and went to school even for a year and look at a similarly-matched group that had zero college, and over 10-15 years you look at their total earnings, the outcomes with their kids, what communities they live in, blah, blah, blah. so you could do a matched comparison study. you know, again, i do think the program has worked. could it be better? of course, it could be better. i i in the other thing that happens is pell has become a social service program and not just a higher ed program, and when you have low income students who are now using loans to buy groceries and pay the rent because they're a single mother, and they've got to go to school and raise kid, people are

using student loans to pay for what social service agencies should be doing. politically, it's impossible to have two congressional committees work together, oh, my god. but, you know, maybe there are other social service benefits that should be derived by students who are getting a pell grant. so if you're getting a pell grant and you're in school, should you get different kinds of housing benefits or child care benefits or, you know, independence card benefits? i do think there's a conflation between social service needs and higher ed needs, and that all gets, you know, completely jumbled up. what i'd really love to see, though, as we move forward with data, and the department has had to do this. they did it in 1994, and anybody who knows me so sick of hearing me say rick-adjusted methods. for example, the department showed if somebody is a single mom, you know, if a group of single moms graduate at the rate of 49%, that's the equivalent of a 70% graduation rate among the

student population. what if you did multivaried analysis and looked at a student that has four different risk factors. should we at least not look at those students risk factors or risk profile and then sort of give credit to that student and the institution where credit is due? so i think once we start weighting this databased on the inputs of student risk as well as the per capita expenditure by an institution including subsidies, cash, loans, pell, all in so that you're now, you know, standardizing the data based on amount spent per student plus student risk, i think then we can look and see whether or not the programs have been effective, but we're a long way from that. >> okay. well, thank you very much. as a professor i can't leave that happening and say there's information if you go the hcm strategist web site, they have a nice set of papers on that. and if you're interested in

connecting social services with financial aid, you should look at single stop usa. now i'm going to open to it up for questions. some of you know that i'm working on a project with single stop usa, so that's the laughter. questions? comments? well, no, actually, questions. i'm going to follow andrew kelly's rule. you have to ask a question within the first couple of words when you open your mouth, otherwise i'm supposed to stop you. and you should identify yourself, thank you, andrew. i'm learning. go over here? >> hi. my name is mike, and i'm with america's future foundation. we've been talking a lot about what approach the federal government and we should be taking towards reforming this. what approach should we suggest specifically to the institutions of higher ed in looking how they should reform it from their side? >> who'd like to take that?

okay. ann and then david. >> you know, i think we've seen two different behaviors on the part of institutions, and both have been driven by a focus on outcomes and completion, and i think they've both driven to increased costs. so i think that institutions are driven by the outcome agenda and manifest differently. so i think at selective elite institutions, you know, they want to be -- they want to have a 98% rate instead of a 97. so they are driving their policy and dollars toward more and more capable students. so they're trying to be more and more selective, and they do it by spending money on things like dorms and, you know, research facilities and gyms and travel abroad and all these other things. so i think we maybe look at selective institutions and say, you know what? maybe, maybe you should not be so selective. now, i know that's crazy, right? i mean, that's a naive thing to say. but i think when we look at elite institutions, they all

have to join hands and sing "kumbaya" and say, okay, the arms race is over. we're going to stop investing there. i think at the opposite extreme where you have open enrollment institutions, they are spending more and more dollars layering service upon service upon service upon service to try and get their completion rates up. and while i think those services are great, a lot of the students who should partake in them are now working extra hours to pay the cost, and they can't use the services. so i think at both ends, you know, we have to have institutions that maybe look more carefully at their population of student and at their goals and adjust their expenditures to make sure that they're spending money wisely which means selective institutions gotta give up a little bit of selectivity, and open enrollment institutions have to do a better job of finding out which intervention is important and should be, you know, where they invest their dollars. >> okay. david? >> um, building off of diane's

response, i think that the federal government has a potential role in regulation and a series of incentives to get institutional behavior to change. if we want selective schools to be more open, i'm not sure we get 100 percent open, but we might say in order to participate in title iv -- and that's both loans and grants and, else -- you have to open up a certain percent of your slots for random admission, and it's random admission of pell-eligible kids, okay? with regard to focusing the community be colleges -- community colleges on performance what strategy works, i think we need to do research on what works, but we need to in

the aid programs provide incentives to those institutions both regulatory and financial institutions to change their performance. i don't think we can tell them what to implement any more than we can tell the selective institutions that their selectivity will be totally ended. but the feds, the feds as influence if you look at grants, tax expenditures and loans, loans which flow through parents and kids and then end up in -- or students, not kids -- end up in the institutions, the feds have direct influence over roughly 70% of the dollars flowing into education side of this sector. they influence that many dollars' share of the postsecondary or higher education cost.

we ought to demand things as federal taxpayers. we ought to demand things in terms of institutional performance changes. and that's why we went the direction of student aid in the late '60s and early '70s, because we didn't want to just give the institutions money to spend on what they knew was the right thing to do. because we knew what they knew to be true. so we started this route, and now we should put some teeth in it. >> i think i see sandy wanting to respond. >> i just have to put in a word about selective institutions here. [laughter] i mean, okay, so why we care about selective institutions is because of the opportunities that they provide to students, and we do want to encourage them and provide incentives for them to provide these opportunity toss a broader group of people on the socioeconomic spectrum. the justice department is not helping that effort at this moment. but the idea that what we want

is to assign students randomly to institutions, then we will lose what it is that we're trying to give more people access to. so i think we have to have this conversation in a little more nuanced way. it's one thing to have elitist in the sense of not allowing people who weren't born into privilege into this world, and it's another thing to say, i mean, looks, we don't want random assignment to the nba, and we shouldn't have random assignment to higher education institutions either. >> i think i'm going to let them continue to go at this a minute. david has a response to that. >> i have a letter, a paper that my mom wrote when she was a, i think in the eighth or ninth grade. my mom, who arrived here from russia on her own when she was 11. and she was in the eighth or ninth grade, and she wrote a paper. and she talked about in america

the teachers seemed interested in teaching young women. this didn't go on in russia. and they seemed interested in teaching jews. that didn't go on in russia. and they actually thought that my mother coming here at age 11 could succeed. she went on to get her master's degree at the university of michigan. i think we need to run the system toward responding to those possibilities. perhaps not so much for russian jews anymore, but there's a whole lot of other people. >> from diane? >> you know, i think something sandy said is really telling. what sandy just said is, you know, we can't have random assignment to these elite institutions because we would destroy the very thing we want which is, you know, giving more

students access to these highly-successful institutions. so, in other words, if you're not selective, that's as much as saying the only reason elite institutions are elite is because they're highly selective. they are random assignment. anybody walks in the door, and anybody has a chance at getting an education. so, again, if these elite institutions are so great, then why does it take a select i enrollment -- selective enrollment policy to be so great? my gosh, aren't they the ones more than anybody who should be able to take students by random assignment and turn out these great outcomes that they want to hold everybody else to that they achieve through selection policies? yeah, i'm all for random, you know, random control trials. but, you know, have at it. 50%, let's say 50% of their enrollment has to be by lottery, random assortment, let's see how that goes. >> i think we've probably had --

unless sandy has anything she wants to add there. okay. let's open -- over here. yes. >> hi. celia simms. just a follow up on an earlier comment about institutional behavior and also the need for research on multiple fronts. i mean, many of you said earlier we've got this fixation, i don't think many would disagree, on pell and the pell question and sometimes with the loan question. but institutional behavior is not just driven by title iv aid. and i fear often when we talk about behavior in higher ed we get focused not just on pell, but on title iv aid. now, your elites, diane, many times people who worked on the hill remember aau conversations which were privately, you know, we're telling you we care about pell, but we really -- at the end of the day, it's nih we really care about. don't cut my nih funding. so i guess the question for the research is do we also need to

broaden that question of all the various funding from the feds in how that informs or changes behavior at the institutional level, because it's not just title iv? massive amounts for some of these institutions hidden some of it there, nih, a lot through indirect costs coming through various -- which is all fungible. so just curious your comments on that. >> good. who'd like to start? okay, diane? >> so when i worked on the hill, i worked on the house science committee, so i think i had similar conversations with, yeah, elite institutions. and i worked for elite institutions, so i've been on the other side of that where, absolutely, a dollar to pell is not a dollar to nih or science funding, and if you're an elite institution, you get far more on a research dollar than on a pell dollar, so i think you're right. institutional behaviors are driven by many, many more things than just title iv. and one of the things really driving institutional behavior right now other than u.s. news is everybody wants to be a

research university, right? and there's tremendous cost in that, and some of the cost is born by undergraduates -- borne by undergraduates. i completely agree. it's far big or than just title iv. >> um, i don't disagree that it's bigger than title iv, but given the amount of money that the federal government influences and pays inside of title iv, we ought to explore and understand whether it can affect some of the behaviors, whether the institutional change can affect some of the behaviors that influence the success of title iv. i don't think any research answers all of the problems. i mean, if you're an experimental physicist as i was, you do a project to understand a particular phenomena and see if you can understand it and if you

can influence it in an experiment. you know that cosmetology -- cosmology, not cosmetology, i'm sorry -- [laughter] you know that cosmology and dark matter and astrophysics matter, but that doesn't mean you have to broaden your focus so much that you don't have anything as a result. >> another question. wait til the microphone comes to you, please. thank you. >> good morning, everyone. my name is tom, i'm a recent graduate from san diego state university, and i made it out here as an interfor senator barbara boxer. we've talked a lot about how we don't have enough research and data to fully understand the impacts of the programs like pell or federal student loans.

so my question is how can -- what kind of policies can we make that would really target the areas that we need? >> good. >> um, i think when you, when you're contemplating sort of the research positions with respect to title iv, you quickly, you devolve into questions of where are the data. and, you know, in recent years we've at the department been able to address that somewhat with, you know, the various, you know, student-specific cross-sectional longitudinal studies. bps, bnb, those studies. and going back a few years earlier, you know, the high school and beyond from 1980, national longitudinal survey of 1972 high school graduates, you know, we at the department, we

loved ourselves some longitudinal studies. [laughter] but they take so long, and they are so expensive. and, you know, within the agency and in particular the statistical branch, you know, the resources go to the k-12 side. it goes to nape. you know, we used to do nip sis every three years, now it's every four because we don't have the money to do it every three years. you know, we had an, a very interesting proposal several years ago in the ipeds context of the, you know, the student records system. and if you think about ipeds, it's a collection of student-level data, but the clerker is out at the -- collector is out at the state or the institutional, and it's funneled into the department. the notion about the student unit record was, well, you have all those unit records out there, why don't you just give them to the department, and

we'll assemble them in a fashion that would allow us to more accurately assess graduation rates, completion rates, that kind of thing. well, you know, people got excited about privacy and confidentiality and big brother, and so we can't do that kind of stuff. we're specifically prohibited now in the statute from doing that. so, again, you are relegated to, you know, the -- in terms of national data availability, basically what the department does through the, as we say, through the periodic surveys and then the school-level collections that's known as ipeds. and then, you know, whatever other, you know, sort of localized studies, experiments, things that mdrc has done, you know, that, i mean, that's what you have. and now i think there is some

good news coming forward. we talked, i just talked about the nces styed, the statistician side, the research side of the department can. what about the student aid side? because, you know, we got on the student aid side we know lots of things about people who get pell grants, about people who get student loans, we know lots of things who apply for student aid. we know their incomes, their assets, their family circumstances. one of the things that we have not known about are pell grant and student loan recipients is what happened to 'em after they ceasing being recipients. because that's the record we have administratively in the program office, is for people who are recipients. i guess it was last year that the department announced that finally, 40 years later, they would begin to collect outcome information on student aid recipients. you know, completion

information, graduation information, that kind of stuff. so, you know, looking forward several years down the road, we will have a better sense through, you know, basically census data not, you know, not survey data of, you know, outcome information for aid recipients, and, you know, we'll be able to couple that with, you know, all of the input information or what was the income and family circumstances of those individuals at the time they began their sort of student aid odyssey. >> all right. i'm going to make one comment and then pass it on to the discussants which it's beyond the data, beyond the resources for doing the research. and i will just say and put myself out there that, um, the institute for education sciences recently had their competition for last year's research grants, right? and on the postsecondary side i submitted an application for a randomized experiment of

need-based financial aid to replicate a study that i've done in wisconsin. it was a $3 million application. it was scored high enough to get funding, and it was she sequestered. it was one of the 16 of the 40 -- 16 applications, $3 million that was awarded high enough and turned down for funding because they said they don't have enough resources. so the resource side on the research end is significant. diane? >> i think there's another way to skin the cat though. so one thing is the department has the authority -- so one of the reasons you can't do great research is because the requirements of title iv kind of box you in as to how much money you can give students and what requirements you have to meet. so the department does have authority to give institutions sort of dispensation from typical title iv requirements and to allow them to use other kinds of standards. so the department has the authority. they haven't used that authority well. i mean, i think, you know, there were experiments that went on for ten years, there was no learning from it. more recently, you know, the department has decided, you

know, which ideas it thinks is a good idea and then we'll only fund those. so i think if we actually had an honest call for proposals through the authority -- what's the authority called -- >> [inaudible] >> experimental sites. yeah. so if we allowed institutions to come in through experimental sites, hold them accountable and say here's how we want to design the system, you could get some data. the other thing is this, i know researchers always want to manipulate a variable and look into the future. one of the things that nobody's done that i think we should do is look at people who graduated who beat the odds, right? there's a whole bunch of us out here. go and talk to us and figure out, well, how did you beat the odds? was it the program, was it the money, was it a person, was it the institution? because i think we can, we have enough people who have been through the system now who are far enough along in life that you could do a retrospective analysis to see what factors seem to be the most critical in determining outcomes. and, you know, the other thing

that nobody ever talks about is we're not talking about building a car here. we're talking about human beings. and human beings are highly variable, and people bring their own sets of issues and problems and assumptionings and needs -- assumptions and needs to college, and i don't know that we can ever, you know, standardize for that because people are people. and, you know, as a mother of a kid who's a college dropout, i've got to tell you sometimes they do really dumb things, except sometimes it works out really well for them, so, you know --? >> okay. and then i think, david and then sandy. >> two questions. i don't think that the people who are saying we need more focused research are saying we don't have enough knowledge to make decisions. i think what we're saying is we don't have enough knowledge to make decisions that are likely to improve the performance of the system. we can make decisions like lots of things we decide on every day without any empirical knowledge.

if we want to. i think it's, sorry sandy, crazy to do that, but, you know, but i think crazily anyway. with regard to the nipsas, and, you know, dan mentioned we don't have enough money, so we're going to do it every foryears. we may not have enough money to run the same level of detail, the same size sample every three years, but perhaps we should rethink nipsas so there should be a small scale survey run annually that generates data quickly and then like the census every five years, there is a big scale. we try -- and this is a problem with the part of the department that looks at educational statistics -- we try to have a degree of confidence and certainty which is admirable if

we had the money, but it's not admirable if we need to make better decisions tomorrow. >> okay. >> and we can do otherwise. >> many i just want to note since we do have people here that, in fact, some of the changes that you're talking about are actually happening already. which is great. >> and we need all of the above, but we also need to do better with the research that we have. and we live in a world where what happens is somebody does a study -- sometimes a good study, sometimes a terrible study -- and they put out a press release, and becky puts a title on it that says study finds that whatever outrageous finding it was and, or whatever jumps out at them, and that's all anybody reads. and then we have the common wisdom that we now know that x. and nobody knows under what circumstances or what the methodology was or anything like that. so we really need to do for synthesis. if there are seven good studies about the same issue, we need to find a way to make sure we pull

this all together in a way that will help translate what we do know, to help us understand what we know because it's a real waste just to do all these mixed quality -- >> thank you for the shoutout to the clearinghouse and our new adventure in postsecondary education which you'll see is coming out with reports all the time now. all right. no, we need to wrap up, unfortunately, but i'm sure this conversation will continue. so thank you to the first panel. [applause] okay. and we're going to be taking a brief break of about 15 minutes. so be back in your seats by 10:44, please. [inaudible conversations]

expwhr. >> today the senate banking committee examines private student loans and how they're regulated. they'll hear from the consumer financial protection bureau, fdic, office of the comptroller of currency. live, 10 a.m. eastern on c-span3. >> later today president obama will deliver a speech on his plan to tackle climate change. he'll announce executive orders to direct federal agencies to reduce greenhouse gas emissions that may be the cause of climate change. live coverage from georgetown university at 1:55 eastern today on c-span3. >> now, more from the american enterprise institute forum on student financial aid. next, student financial aid experts analyze the current system and discuss reform

options. this is an hour, 15 minutes. [inaudible conversations] >> welcome back again for the last time. for those of you who stuck around for the whole day, your reward is to see a panel where that is likely to get fun and controversial. rich vedder promised me that he was, quote-unquote, going to be a bomb thrower this afternoon. so -- and i said that's why you were invited, because he plays that role quite often. we're delighted to finish the day with sort of what i've been envisioning as a plenary session where we get to talk about some of the issues raised across the papers today, but also some broader issues that maybe we didn't talk about. and we're really lucky to have a

great group. you may notice that bridget terry long from harvard is not with us. she got sick last night and couldn't come down this morning which was too bad. we're all -- hope she gets better and feels better soon. but we're happy to have terry hartle with us. terry's the senior vice president of the american council on education where he oversees the counsel's external relations and higher education for development. and terry, i think if we were to plot the person most often quoted in the chronicle or ihe, i think it must -- it's got to be you, right? he's probably up there, right? my guess. so an authority on many of these issues and particularly from the perspective of the institutions. to terry's right is art howptman, independent policy consultant, and he's been working specializing in higher education finance issues. art and i go way back over a couple papers worth now he's a

good friend, and we're really happy he can be here. amy laitinen is also with us, deputy director for higher education at the new america foundation. before that she was a senior policy analyst for higher education sector, and before that she was a special policy adviser to the undersecretary and assistant secretary for vocational and adult education at the department of education. and she's also a proud alum of uc berkeley as am i. and then all the way on the left, my left of the panel which is very accurate for richard is -- [laughter] richard vedder. he's a distinguished professor of economics at ohio university and director of the center for college affordability and productivity and an adjunct scholar right here at aei. he reminded me he was just on this stage last week here at aei with former secretary bill bennett. so it's great to have all you all here. how this is going to work is i'm going to do some sort of

moderated q&a, i've prepared some questions in advance. they've gotten them. we'll open it up for discussion from the audience as well when we sort of get into the discussion. but i thought i would start with a couple of rapidfire questions to kind of get everybody talking on the panel. so first one -- and by rapidfire i don't, it doesn't have to be ten seconds, but, um, something under let's say a minute and a half, how about. so the first question which, you know, i said in my introduction this morning that part of the goal here was to revisit the original assumptions that were underlying the programs when we designed them in the 1960s. i think we've done a pretty good job of doing that today over the course of the day. the papers do a terrific job. so if you could go back to 1965, let's say, and build the financial aid system from scratch, what would you do differently? why don't we start -- we'll start with art, first, and can then we'll make our way across.

>> almost as long as david mundel, but not to 1913 either. so, basically, i think what we missed -- i wasn't here in '65, but i was in '72 -- what we missed is in part that we didn't take into account institutional behavior and what they were going to do in reaction. so we assumed a static system instead of a dynamic system. so the whole issue with price, the whole issue with how institutions were going to award aid and the like we didn't really get right. relatedly, there was the unintended consequences that we didn't take into account very well. i -- in retrospect be, i wish that we had been more aware of the notion that student aid by itself isn't going to really do the trick, and the whole promise idea or the i have a dream idea, i think, is really pretty

important in the scheme of things for the high at risk students. and we didn't get that right. and i don't really think we recognize that the feds can't serve just as a -- [inaudible] how it relates to the states is very important. so been, basically, playing catchup on all those issues, i'd say. >> [inaudible] >> in general, i'm not big on counterfactual history because it's really speculative. the fact is higher education act when it was enacted was a very small, simple piece of legislation. it's gotten incredibly more complicated over time. in some cases you can do the counterfactual thing, and it makes sense. i mean, if we were talking about the creation of the alternative minimum tax, for example n1986, we probably should have indexed that to inflationing at the time. but i think going back as far as

'65 you don't have that many things that you could say we should have done it differently at that point. i think if i were going back that far, i think one question we ought to ask ourselves is whether we want the banks and the student loan program orbit. that issue has now been resolved. but for a very long time, that issue drove student aid policy more than anything else. i think the thing that's been challenging for us also over time has been an uncertainty about whether we were focusing student aid on helping low income students or whether we wanted to help the middle class or whether we wanted to do both. with enough money, you can do both. without enough money, you're making choices that diminish your effectiveness, particularly lower income students. and be i think the third thing i'd say is we seem to always be playing catchup with respect to

changes in the student population. higher education programs have always been designed to serve a traditional student population. over time we have tried to change that, but we always seem to be playing catchup with it. and i'm not sure we'll ever quite get it right. >> with so i guess the first thing i would do would be fund pell like an entitlement because it is one, and it should be one. i wouldn't outsource quality control or at least the minimum quality control as several people on the last few panels have said to an accreditation system that clearly is not doing a good enough job at providing a bare minimum level of quality for institutions and then students, and then we could talk at some point about how we might rethink accreditation in the future, doing a tiered system, something like that. i would focus, certainly, on access but also on outcomes, outcomes particularly for low income students as we've been talking about today. and then make all of the

outcomes transparent. i think dan mentioned earlier that one of the reasons we ant experimenting as much as we can and we don't have as much information as we can is because we don't have good data, a student unit record system, for example. so i would make all of the outcomes that we have transparent and then to the extent that we can quantify them, let's make them transparent. to the extent that we can't yet, let's at least make those transparent even if they're not quantifiable and able to be sort of compared. and then a final thing that i think we talked about a little bit in one of the panels is i wouldn't -- if we're funding pell as an entitlement thinking about the affordability issue, i think i would revisit whether or not we want to count loans as making money for the government. was i think that has really led to this, you know, to the fact that thousand we're just sort of -- pell is paying for less and less because we're offering more and more loans. so that's where i'd start.

>> i have a different perspective. [laughter] i think this higher education act of 1965 in three enactments have been largely a failure. they should never have been passed. i think we would have been better off if we had no student federal loan programs at all. i suspect tuition rates, for example, would be at least 25% lower today, maybe more. who knows exactly? terry's right, we can't say, give counterfactuals with precision. i do think there's some argument to be made for a federal student voucher program that would be given directly to the students and not through student financial aid offices, and thus, i'd call it a modified pell grant for maybe five million students. but by and large, and i don't mean to be offensive. i think this has been an informative conference. but i think by and large we've been looking at the wrong problem and reaching the wrong solution today. >> that was very kind of you, thank you. [laughter]

so i actually, i actually hesitate to -- i actually hesitate to ask this second rapidfire question and start with you, richard, which is what's been the biggest disappointment in the financial aid system? i have a sense i would know your answer, but go ahead, please. >> no. i'll get a little less flamboyant and more 'em empiricl here. there's been a lot of concern when we started the student loan programs and the pell grant programs was the concern about low income people and access. to me, the greatest single disappointment is if you compare 1970 with today, and i may have these statistics slightly off, but in 1970 -- excuse me, i don't have any powerpoint, this is west virginia powerpoint -- there were 12% -- [laughter] 12% of low income bottom

quartile recent, of the income distribution recent graduates, 12% of them came from the bottom quarter. today it's about seven. the actual proportion of graduates coming from -- recent college graduates coming from the lower quartile of the income distribution is smaller today than earlier. tom mortonson's data, and i think that's a horrible disappointment that here we've had this massive program ostensibly in the name of helping the poor that hasn't really been terribly effective in doing so. >> i guess i should get program in buoyant. well, we have a hot mess of all sorts of perverse incentives and moral hazards in our patchwork federal aid programs. [laughter] >> i like that. >> all right, there you go. those things are true, if program in buoyant -- program in

buoyant. and think sort of building on your point which is how well has the system serving the students we care about, but the student aid programs were designed for. and i think, you know, there's this sort of question about access, and i think access is critically important, but we don't question enough access to what? access to a quality degree and credential. there's a lot of evidence that students are not getting quality degrees that are meaningful, that demonstrate learning outcomes, that are, that students don't graduate. if they do graduate, are they making enough money to pay down their debt? i mean, i think there are all of these questions. access to a meaningful credential and, you know, walking across the stage, being able to sort of think with certainty that you're going to be able to graduate and not graduating with a huge albatross around your neck of debt. so that is, i think as we're talking about access, we need to think a lot more about the broader conversation of access. >> i would, not surprisingly, disagree with richard a little

bit. you really can't say that the mortonson data is entirely attributable to the higher education act. you can say that the higher education act didn't do enough to offset it. but one suspects that the decline in quality of elementary/secondary education particularly for low income students has had a huge impact on the ability of low income students to access higher education. i guess i would say tw things that are disappointing. first, the student loan program has become an access program. it was never intended to be that. the original design of federal student aid was grants for low income, loans for the middle class. it has become an access program. the overwhelming majority of people who get pell grants now also get a student loan. i think the second thing i would say, um, that is a disappointment and something that we couldn't have foreseen is that the states have proven to be somewhat unreliable

partners with respect to postsecondary education. in some times when the economy has been good, they have funded higher education generously. for eight years in the 1990s the state of california cut tuition at the university of california, the cal state campuses and at the california community colleges. the more recent pattern, however, suggests that states hard pressed by other financial needs have been cutting funding for higher education, and we built a system on the assumption that the states, the federal governments and the institutions all had a role to play in, and i don't think the states have done their part. >> well, i think the big success that we tend not to talk about if i may is that the rates of participation are much higher than what they would have been, and i actually think that the reason that attainment has gone up despite the fact that it's a

mature industry is we just sent a lot more people to college, and some proportion of them completed. and so we, you know, as a critic of pell grants, i'll start with that. but the biggest disappointment is that we haven't closed the gaps. everybody grows, but we didn't really close the gaps in terms of participation or attainment although i feel that tom's mortonson's numbers are a an exaggeration. they're estimates, and i don't think they're really accurate of what the reality is, and i think we use them too much. but in any case, there's clearly a disparity in the terms of what's going on. i think other disappointments is that, i feel loans especially have had an impact on prices, and so we didn't anticipate that, and that's part of the reason that -- part of the reason that the prices have gone up. and, obviously, the levels of debt were unanticipated, and i think at this point are excessive, and we need the figure out some way of turning that, turning that around. >> so there's a bunch of things

i want the ask about, but one of the things that just came from three of the comments if not four was, um, the notion that it's the loan program that's particularly problematic here. richard, even you said you would support a voucher for low income students. so provided that we have the loan program now, how can we find our way out of this mess? the last panel sort of laid some ideas on the table, but i wanted

>> whether it might lead to some behavioral changes where their own rate of return on their investment would be directly dependent on the earnings of their own students. for example, just that as one example of a kind of a skin in the game idea that picks up on an idea that miguel had and also bob sheets and others in a somewhat different form had which i thought were promising. >> so i would go back to, um, again, the way that we score and sort of count how student loans make money for the government. so i would like to say though right now i don't want to necessarily take that away, because it does pay for -- it

has been used to pay for pell grants. if we want to pay for pell, we need to pay for pell as part of an entitlement. then let's figure out what we want to do with loans. and i think sort of the problem with loans is, you know, we talk about the different actors who were, who are poorly incented with our federal financial aid policy, and the federal government is one who's poorly incented by our loan processes. so when we're, you know, and i say we. when the federal government is sort of looking for money to pay for pell or to pay more this, what can we do? oh, let's raise loan limits, and that will generate money that we can use to pay for pell which is craze i because it ends up sort ratcheting up the cost of education. so we're just sort of throwing money into the water. it's not really making any difference. so i think you have that. i think, you know, institutions respond to loans in very particular ways. i mean, i think they're seen as, they're basically seen as grants. i think a banker said