President David Adamany spoke out for increased federal support for student grants over loans and decried "credentials escalation," during testimony April21 before a committee of the U.S. House of Representatives.

The field hearing focused on reauthorization of the Higher Education Act, which provides federal aid for student loans, grants and college work study. Adamany addressed the Subcommittee on Postsecondary Education, Training, and Life-Long Learning of the U.S. House Committee on Education and the Workforce.

Scheduled to expire Oct. 1, 1998 the Act must be "reauthorized" by Congress every five years.

Adamany was invited to speak before the panel at Oakland University by Rep. Dale Kildee of Flint, ranking minority member of the committee.

Adamany made six recommendations, the first of which was an increase in Pell Grant maximum awards from $2,700 to $3,000. He noted that the Pell Grant Program was especially important at urban universities such as WSU, which serve more lower and middle-income students. Alternative loan programs often leave the students who do graduate with crushing debt burdens, Adamany said.

Pointing out that graduate students are not eligible for grants, but must opt for loans, Adamany urged the panel to consider restoring the tax deductibility of student loan interest payments and to extend non-taxability to employer provided educational assistance.

He also sought to add to regulations on the certification of accrediting agencies a requirement that agency regulations must be in the public interest. Adamany explained that some accrediting agencies -- citing pharmacy and physical therapy as examples -- "are engaged in credentials escalation which will reduce the supply of qualified practitioners and greatly increase the cost to institutions and to students of offering these professional programs."

The complete text of the Adamany testimony follows.

Statement before the U.S. House Committee on Education and the Workforce Subcommittee on Postsecondary Education, Training, and Life-Long Learning
April 21, 1997

Field Hearing on Reauthorization of the Higher Education Act

Rochester, Michigan

David Adamany

President

Wayne State University

Mr. Chairman and Members of the Subcommittee, I am David Adamany, President of Wayne State University. I appreciate the opportunity to appear before the Subcommittee today to highlight the role that urban universities play in providing access to education for urban and low-income students.

Wayne State is a national research university with an urban teaching and service mission. Located in the heart of downtown Detroit, which is one of the largest urban, industrial areas in the world, Wayne State provides access to higher education to thousands of working students in southeastern Michigan, offering classes both on the main campus and at satellite locations in Oakland and Macomb Counties. With more than 31,000 students, WSU ranks third in enrollment in Michigan and consistently ranks in the nation's top 20 in enrollment.

This will be the last in my 15 years of service as President of Wayne State University. I am proud of the extraordinary progress that we have made toward fulfilling our mission as a national research university with urban teaching and service missions. I am particularly proud of the opportunities that Wayne State has been able to provide to urban and lower income individuals by making higher education affordable and accessible to students of all socio-economic backgrounds.

Student Profile

Wayne State serves a unique student body -- first generation college students who are older, working, have families, pay for their own education, and are, in large part, from lower middle to lower income backgrounds. The median age of our student body is 28.7 years. Fifty-three percent attend part-time. Ninety-eight percent of undergraduates work, almost 50 percent of them full time. Ninety-seven percent of graduate students work, almost 70percent of them full time. Eighty-eight percent of our students commute from within the Detroit metropolitan area.

In addition, Wayne State serves an ethnically and racially diverse student body. WSU ranks among the top ten institutions nationally in bachelor's degrees awarded to African Americans and in the number of blacks who go on to doctorates. In both rankings, we stand almost alone among predominantly white institutions, in the company of historically black colleges. About 30 percent of WSU students are minority, of which 24 percent are African-American. Over56 percent of our student body are women.

Serving such a diverse student body adds additional costs to an already strained budget. For example, to meet the needs of this student body, Wayne State offers classes in the day, evening, weekend and summer, effectively running not one university, but two. In addition, we support extensive retention and counseling efforts to assist disadvantaged students.

These cost pressures are exacerbated at an urban university because tuition increases would result in a significant number of students no longer being able to afford a college education. The value of and need for a college education has motivated individuals of all economic backgrounds to seek access to higher education. The difference between the implications for a student from a middle-income family versus one from a low-income family is that the middle-income student may have to choose to attend a more affordable school while the low-income student may be faced with not being able to afford school at all. This is why financial aid is particularly critical to students at urban universities.

Financial Aid

While financial assistance has made education possible for many students, the continuation of tuition increases and personal support costs has forced many students to shoulder ever-greater debt burdens. The irony is that as individuals realize the economic advantages of higher education and pursue postsecondary degrees, the inability to pay either puts education out of reach for individuals at lower income levels, or leaves graduates with staggering debts.

We have made every effort to keep education at Wayne State within the economic reach of our students and their families. Federal student financial assistance has played a critical role in making higher education accessible to residents of metropolitan Detroit who, because of circumstances in employment, finances, or family, would otherwise not be able to afford higher education.

During 1995-96, Wayne State provided more than $72 million in federal, state, and institutional financial assistance to more than 9,000 students. Of this total, approximately $50 million (69 percent) was provided through federal student aid, $1.5 million (2 percent) from state aid, and $21 million (29percent) from institutional and private sources. Of this total, approximately61 percent was in the form of loan assistance, 37 percent in scholarships and grants, and 2 percent through federal or state work study assistance.

The largest source of aid among federal programs has been the Federal Family Education Loan Program (FFELP). In 1991, WSU awarded $19.5 million in FFELP loans. In 1995, that amount doubled to $38.3 million. Over the same period that loans doubled, Pell Grant awards declined 22 percent, from $8.2 million to$6.4 million, while student enrollment declined only 6 percent, from 32,000 to 30,000. Thus, it is clear that students have to take on greater debt burdens, despite the fact that Wayne State is the only state public institution in Michigan to hold its tuition increases to less than one-half of one percent over the last decade and a half when adjusted for inflation.

While I appreciate that this Subcommittee has increased the authorization for Pell Grants, as well as broadening eligibility, without a concomitant increase in appropriated amounts, such changes are rendered ineffective for addressing the needs of students who are in the greatest need for financial assistance.

In 1996, Wayne State began participating in the William Ford Direct Student Loan Program. To date, 8,474 direct loans totaling $30.5 million have been awarded to WSU undergraduate and graduate students. Direct lending improves services for students, eases administrative burdens, and fosters healthy competition with the FFELP, resulting in improvements to both loan systems, and ultimately benefits students.

Graduate Financial Assistance

While much attention has been paid to the needs of economically disadvantaged undergraduates, graduate and professional students have also faced financial challenges.

As you are aware, student loans are the only broad-based form of financial aid available to graduate students. While the federal government provides a small number of grant and fellowship programs for graduate study, there is no graduate financial aid comparable to the Pell Grant. Thus, low-income graduate students assume huge loan debts while earning little income while they are in school. One way to help alleviate this burden for low- to middle income students is to restore the tax deductibility of student loan interest payments.

The need for financial assistance for graduate and professional students is much more acute at Wayne State because of the unique student population we serve. Of our 13,000 graduate and professional students, most are non-traditional students who are older, working full time, and have children. It is much more difficult for such students to pursue graduate or professional education that requires a substantial period of training. As I stated earlier, 97 percent of our graduate students work, 70 percent of them full time. Opportunities for working students who are nonetheless willing to take on the challenge of graduate education should not be limited to only those who can afford it.

A majority of our graduate and professional students are enrolled in degree programs necessary to upgrade their skills, become more economically competitive or to enter a new profession. 88 percent of our post-baccalaureate students were enrolled in masters or professional degree programs; 12 percent were enrolled in doctoral programs. These are people who, through their experience, realize that a bachelor's degree is often not enough to help them compete and advance in the workplace.

In the doctoral arena, there are strong economic disincentives to pursuing a Ph.D. Obtaining a doctorate not only takes years of study, during which annual income is limited or foregone, but also costs a significant amount in tuition and fees. Partly as a result, the fastest-growing demographic groups remain severely underrepresented. For the nation to meet the human resource requirements necessary to compete globally, we need to increase graduate school enrollments of African Americans, women and other underrepresented groups. The bottom line is that a strong federal investment in graduate education and research is essential to maintaining the nation's leadership in science and technology.

Title XI: Urban Community Service

Almost every major city has at least one public university that serves the educational needs of the urban community. These universities employ and educate a large number of people from within and around the city, as well as provide graduates who go on to contribute to the local economy. As such, the urban university emerges a natural partner and valuable resource for the community.

In 1992, Congress enabled, for the first time, urban academic institutions "to work with private and civic organizations to devise and implement solutions to pressing and severe problems in their communities" through the provision of funds for Urban Community Service under Title XI of the Higher Education Act. I thank the Congress for recognizing the significant contribution that urban higher education institutions could make to help solve urban problems. I hope to see it retained and strengthened during this reauthorization.

Wayne State has engaged in two projects through the Title XI program. The first project was an Urban Safety Program, which focused on youth crime prevention and safety. The program linked families with business crime prevention efforts recognizing that both contribute to the stabilization and growth of a community. There was widespread support for this project, including from chief executives of major community and law enforcement organizations, as well as from the Governor of Michigan and the Mayor of Detroit. Among the accomplishments of this project were: more than 4,500students and 400 Wayne County police officers received training in non-violent conflict resolution. In addition, business owners have been trained in crime prevention strategies in targeted areas, including the Empowerment Zone and greater Detroit.

The second project focuses on the Detroit Empowerment Zone with the goal of promoting and implementing community-based efforts to prevent and reduce crime while building strong and healthy families and enhancing business/economic development. The accomplishments to date include: parenting education training for staff and volunteers at Latino Family Services, the training and placement of an intern to provide outreach services at Southwest Detroit Community Mental Health, and the development of maps which contain statistical data on public safety, demographic and other attributes of target areas.

Title XI recognizes the unique position and resources available within higher education institutions. Title XI has helped to allow Wayne State to work with our own community, and with civic and business organizations to enhance our own metropolitan area. The success of the program stems from faculty, students, and staff becoming a part of the community. Therefore, I urge Congress to reauthorize Title XI and to give priority in the award of funds to institutions with a track record of administering successful, collaborative community service programs.

Accreditation

I appreciate the opportunity also to comment on the new provisions of the Higher Education Act related to regulation and accreditation that were adopted for the first time in the 1992 reauthorization. Those provisions envisioned a three-part scheme of regulation to address the high default rate in student loans. The federal government would continue to play its important role. A new set of state-level agencies, called State Postsecondary Review Entities, was established to closely regulate higher education institutions that had excessively high default rates. And traditional higher education accreditation processes were to be strengthened to assure oversight of the quality and the management of financial aid by colleges and universities.

It has been my privilege for almost four years to serve on the National Committee for Institutional Quality and Integrity that is appointed by the Secretary of Education to advise the Secretary on the certification of accrediting agencies. I can speak with some experience about the impact of the1992 amendments on the accreditation process. In short, the amendments have adversely affected both the quality of education through the accreditation process and the affordability of education for many American students.

The State Postsecondary Review Entities provided for in the 1992 amendments were, as you know, never implemented. They were strongly opposed by most postsecondary educational institutions and constituencies. President Clinton impounded the funds for the SPREs as part of the budget balancing effort in1993, and the Congress concurred. It is highly doubtful that the SPREs would have worked, even if they had been implemented. I recommend that Congress move a way from this approach.

The third leg of the so-called regulatory triad was traditional accreditation. Historically, only institutions accredited by an accrediting agency recognized by the Secretary of Education were eligible to participate in Title IV programs. The 1992 reauthorization enacted three fundamental changes in the accrediting process.

First, it caused the Secretary to discontinue the review of accrediting agencies that accredit programs within universities, but do not accredit the institutions themselves. Since programs do not participate in financial aid programs, but institutions do, there was no longer any reason for the Secretary to certify accrediting societies that examined programs but did not accredit institutions. This has removed from federal oversight a vast number of accrediting agencies that have a profound influence on the quality of education, thereby removing federal oversight of the quality of education available to students who receive federal financial aid. I believe this was a mistake.

Second, the 1992 reauthorization prescribed a plethora of standards by which the Secretary was to evaluate accrediting agencies for certification. The Secretary, in turn, issued a very complex set of rules to carry out these standards. The standards were not carefully worked out, and as a result, have caused a great deal confusion. I strongly urge this Committee to reevaluate the statutory standards for the purpose of focusing them more clearly on the quality of education provided to students. At the core of any such restructuring should be clarification of how institutions are to demonstrate that educational outcomes are used to evaluate students.

Third, the 1992 reauthorization was based on a theory that accreditation should operate in a market fashion. That is, there is an assumption that the Federal Government should not use a standard of the public interest to evaluate accrediting bodies. Instead, the assumption was that if an accrediting agency did not assure standards of quality or operate from a standard of the public interest, other accreditation bodies would be free to compete with the established accreditation agency. The idea that there would be open access to the arena of accreditation and that competition would regulate the accrediting process has failed completely. As far as I know, not a single new competing accrediting agency has formed during the past five years motivated by a desire of postsecondary institutions to rein in an accrediting agency and to compete with that agency to fulfill the public interest.

What has happened instead is that the existing accrediting agencies have been free from any evaluation by the Federal Government or by institutions of higher education as to whether their accrediting standards operate in the public interest. I would like to cite two examples that highlight this adverse tendency. Both the pharmacy accrediting agency and the physical therapy accrediting agency have moved recently in the direction of requiring students to have advanced degrees rather than bachelor's degrees to enter these respective fields. This was done with no showing whatsoever that baccalaureate prepared pharmacists or physical therapists are not practicing competently. Indeed, in the case of pharmacy, the national association representing retail pharmacists strongly opposes the changes in accrediting standards that are moving toward requiring all institutions to offer only the Doctor of Pharmacy rather that the Bachelor's of Pharmacy as well as the doctorate. In short, the accrediting agencies are engaged in credentials escalation, which will reduce the supply of qualified practitioners and greatly increase the cost to institutions and to students of offering these professional degree programs.

Let me make clear how this bears on federal financial aid: students will be required to attend more years of school and to take more credit hours of education in order to earn degrees. They will enter their profession much deeper in debt. And the barriers to entering their profession will be raised higher and will have their harshest impact on low-income students, working class students, minority people and women. Because the Secretary is no longer authorized to evaluate accrediting agencies against a public interest standard, he cannot reject an agency's application for recognition because the public interest might be disserved by credentials escalation.

You might ask why higher education institutions don't simply ignore the accrediting agencies and continue to offer baccalaureate training in these professional fields. The answer is that the accrediting agencies dominate the state licensure process. Time and again, in state after state, the professional associations and the accrediting agencies act in concert to obtain state legislation or state administrative rules that preclude any graduate from sitting for the state licensure exam unless he/she has graduated from an accredited institution. No matter how well trained the student may be, no matter how knowledgeable in his/her field, no matter how fine his/her clinical skills may be, no matter how high the quality of the university from which he/she graduates, no matter how dedicated he/she may be to patients, that young man or woman cannot sit for a licensure exam unless the institution from which he or she has obtained a degree has jumped through all of the hoops imposed by the accrediting agencies. The universities are powerless to fight back. And the Secretary is powerless to deny accrediting agencies recognition if they engage in credentials escalation.

The very same process occurs with respect to accrediting agency regulations that raise costs for students and institutions. Although the Secretary may have some limited authority in this area, there is little that can actually be done if an agency's regulations impose unreasonable costs on education by having standards that are unnecessarily expensive to fulfill. The National Advisory Committee is on the third round of reviews of the American Bar Association's regulations, largely because the ABA standards have little correlation to the quality of education and a high correlation to assuring that law schools will be very handsomely budgeted. Universities then raise tuition to pay these costs, and students borrow more money to pay those tuitions.

This Congress could serve consumers and students very well indeed by restoring to the Higher Education Act a requirement that the Secretary certify only those accrediting agencies whose regulations are not only educationally sound but whose regulations are in the broader public interest. This would be one important part of the overall effort to control higher education costs and to avoid plunging American students more deeply into debt. I hope you will give this issue your closest attention as you formulate the 1997 reauthorization of the Higher Education Act.

Recommendations

Congress plays a significant role in assuring access to higher education for students at Wayne State. As such, I would like to offer the following recommendations for reauthorization of the Higher Education Act:

* Increase funding for federal student aid programs, especially Pell Grants, which provide critical assistance to low-income students. I encourage Congress to increase the Pell Grant maximum award from the current amount of $2,700 to at least $3,000 and to provide appropriations to match the authorized amount.

* Continue to allow institutional choice between the FFELP and the Ford Direct Loan Program. Direct Lending has improved the quality of service for students and institutions. The existence of both programs has resulted in healthy competition, which ultimately benefits students.

* Restore the tax deductibility of student loan interest. As with the deductibility of mortgage loan interest, such a provision would provide a strong incentive for more Americans to pursue higher education as well as help to alleviate the debt burden for low and middle income students. As the debt burden of graduates increases, so too does the potential value of this benefit.

* Permanently extend the non-taxability of employer-provided educational assistance (Section 127) and restore this benefit for graduate level education. This provision is valuable to enabling American workers to upgrade their skills and abilities.

* Reauthorize Title XI, the Urban Community Service program, which has fostered effective partnerships between urban universities and the surrounding community.

* Add to the regulations on the certification of accrediting agencies a requirement that agency regulations must be in the public interest.

The American dream of a better life for tomorrow's generation cannot be realized without a strong federal commitment to higher education. That commitment is of critical importance to an institution such as Wayne State, which seeks to promote access and opportunity for all students and to provide them with a top-notch education.

Mr. Chairman, thank you again for the opportunity to present this statement to the Subcommittee today. I would be pleased to respond to any questions that the Subcommittee might have.