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The central point that I would like to make this morning is that I believe that we need to view education as our Nation's No. 1 priority and that the expenditures on education need to be viewed as an investment in enormous future returns. I believe that, in fact, our Nation's strength is the sum of the abilities of our people.
I also believe that student financial aid programs in the 1990's need to be characterized by three important traits, and these are the points that we developed in our written testimony: integrity; simplicity; and certainty.
Integrity, through the proper allocation of responsibility and authority to the U.S. Department of Education, to the States, and to various accrediting agencies to insist that they do their jobs and that they communicate with one another.
Simplicity, in that it is truly possible to develop a more lean and straightforward method for students and parents to fill out financial aid forms which right now are a nightmare and for educational institutions to process the paper. We are submitting a financial aid form into the record. Take a look at it.
Certainty, in that I believe our citizens deserve to know that the Federal Government has a strong commitment to preserving access and choice in higher education, and I believe they deserve to know that they can attain higher education based upon their interests and their abilities and not be limited by their family's financial circumstances.
I believe we need a Pell grant entitlement so that we can take away the annual question that confronts low income and middle income students as to whether funding will be available and, if so, how much. I believe we need an increased budget allocation to the Pell Program so that we can begin to address the fact that we have a serious loan grant imbalance. Pell grants are today worth half what they were in the late 1970's.
So I urge this committee to try to return the Pell Program to the place that it once was; that is, at the core of financial aid for needy students.
I also urge this committee to try to allocate more of our Federal budget resources to investment of expenditures as opposed to consumption expenditures. I feel that it is the investment in our national infrastructure and the investment in our people that will truly make a difference as to whether this Nation prospers and grows and will also make difference in the Federal tax base.
Last, my organization has been very active in the process of reauthorization of the Higher Education Act, and we are submitting into the record of this hearing our 85 specific recommendations for constructive change in the administration and delivery of Federal student aid programs.
[The statement follows:]
STATEMENT OF ROBERT B. KNUTSON, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, EDUCATION MANAGEMENT CORP.
Mr. Chairman and members of the subcommittee on Labor, Health and Human Services and Education Appropriations. I am Robert B. Knutson, Chairman and
Chief Executive Officer of Education Management Corporation (EMC) of Pittsburgh, Pennsylvania. Our employee-owned company operates the eight Art Institutes of Atlanta, Georgia; Dallas and Houston, Texas; Fort Lauderdale, Florida; Pittsburgh and Philadelphia, Pennsylvania; Seattle, Washington; and the Colorado Institute of Art in Denver, Colorado. The Art Institutes International serve 13,000 students in associate and baccalaureate degree programs. Our students come from every state in the union and from 50 foreign countries.
We also provide postgraduate paralegal training to students through The National Center for Paralegal Training and its consulting affiliations with universities in the United States and Europe.
First and foremost, we believe in developing human potential; secondly, we know that student success is everyone's job.
The Title IV student assistance programs were born out of a commitment by our nation's leaders to create opportunity for our People, and to address the country's needs for a trained work force. As Lyndon B. Johnson expressed it, "Every child must be encouraged to get as much education as he has the ability to take." Or, as Dwight D. Eisenhower said as he launched the National Defense Student Loan program, "The security of the nation requires the fullest development of the mental resources and technical skills of its young men and women we must increase our efforts to identify and educate more talent of our nation. This requires programs that will give assurance that no student of ability will be denied an opportunity for higher education because of financial need."
As Congress reviews and revises the student aid programs for the challenges of the 1990's, I believe there are three important characteristics that must describe these programs: integrity, certainty and simplicity.
Integrity.-Every American taxpayer ought to be assured that the more than $20 billion in federal appropriations for student loans, grants and work study funds each year go to needy, deserving students who attend quality institutions. We do not have that assurance now. This is true largely because the interdependent partners-the states, the regional and national accrediting bodies and the U.S. Department of Education-have not fulfilled their respective responsibilities. The solution is not to throw away the current program and start over, but to delineate lines of authority, hold each partner accountable, and pursue vigorously all those who deceive or commit fraud.
Certainty.-Congress, the President, and we in the higher education community who administer the financial aid programs, have not kept our commitment to the American people. We promised poor students grants, but substituted loans. We told middle income Americans they could borrow to help pay college costs, but then denied" them loans because they were not poor enough. We have not assured "access" or some measure of “choice” in higher education. Only recently have we begun to realize the long-term consequences of not investing in our citizens. We need the certainty of a Pell Grant entitlement to prevent our best and brightest from being sadIdled with too much debt. We need a Pell Grant entitlement so that low and middle income students can receive education after high school according to their abilities and interests, instead of their economic background. We need a Pell Grant entitlement to demonstrate our commitment to investing in our citizens so that they can commit themselves to completing their education. We need a Pell Grant entitlement to train America's work force of the future.
Pell Grants today are worth half what they were to students 18 years ago when the program was started. Just to keep pace with inflation, the maximum Pell Grant should be $4,000 instead of $2,400. That might require $10 billion to fund the program instead of the $5.7 billion currently being requested by the Administration. believe education must be our nation's number one priority, and education expenditures should be considered an investment with enormous future returns. If there is the political will, we can find the political way.
Simplicity. Student aid has grown, and so has the complexity of the forms that needy students must complete. In addition, the number of people who must handle the forms has increased, as the regulations have increased. The student borrower and his family can be readily confused because of the multiple parties involved in the aid application process. submit into the record the Financial Aid Form which is completed by a large proportion of financial aid applicants each year. Consider for a moment the sheer length and confusing nature of this form. Then consider the education levels and family backgrounds of many of those who attempt to complete it. I know we can find a simple and effective way to determine student eligibility without examining each applicant's detailed family income history each year. Let us encourage the Department of Education, working with professionals in the financial aid community, to find a simpler way to make student aid available to our citizens who desperately need it.
I would like also to include in the record our 85 recommendations to improve the student aid programs and the delivery system. They have been shared with the respective authorizing committees in the Senate and the House of Representatives.
We have an immense opportunity as we move through the upcoming Reauthorization of the Higher Education Act. Our challenge is to turn the system around and make it work for students and for our country. With your leadership and that of your colleagues on this Committee, I am confident we will succeed.
Senator BURDICK. Thank you.
Senator SPECTER. Thank you, Mr. Chairman.
Mr. Knutson, I thank you for that testimony, and I compliment you on your outstanding contribution in this field. We are well aware of the difficulties of student financial aid. I personally agree with you, and I think there is general agreement that when we talk about education we are talking about a capital investment. The President has spoken out very forcefully, but we deal with very limited resources, very limited discretionary funding.
I think there is no subcommittee which has a tougher time than this Subcommittee on Labor Health and Human Services, and Education. But we will do our utmost to do our very best in allocating funds for education.
Mr. KNUTSON. We can ask no more. Thank you.
STATEMENT OF THOMAS DETRE, PRESIDENT, UNIVERSITY OF PITTS-
Senator BURDICK. Our next witness will be Dr. Thomas Detre, president of the University of Pittsburgh Medical Center.
Dr. DETRE. Good morning Mr. Chairman, my name is Dr. Thomas Detre, and I am president of the University of Pittsburgh Medical Center. I am pleased to speak with you today about several critical education issues that engage your attention and mine. The University of Pittsburgh is a 1,500-bed academic medical center comprising two tertiary care hospitals, an acute psychiatric hospital, an INE or specialty pavilion, a comprehensive cancer center, and schools of medicine, dental medicine, nursing, pharmacy, public health, and health-related professions.
The faculty, staff and students at the medical center are committed to providing compassionate care to patients, advancing scientific knowledge through biomedical research, and the development of technology and educating and training the next generation of medical and health care practitioners.
Although our interests include many medical programs such as transplantation and occupation, health and safety, which receive Federal funding from appropriation of your subcommittee, reference to two areas of interest would illustrate the connection and the need for your sound and enlightened judgment as you proceed with your subcommittee work.
Let me first talk about AIDS. The University of Pittsburgh has a vigorous program of research on AIDS. Ongoing studies include clinical trials of two promising new drugs, a large multicenter treatment and epidemiological project, other major research examining when AIDS virus crosses the placenta and infects the fetus, health service research on AIDS, and the recently completed study
of AIDS in the western Pennsylvania by the Health Policy Institute.
The University of Pittsburgh also coordinates a regional AIDS education and training center which provides multidisciplinary programs on AIDS for medical and health care professionals throughout Pennsylvania and New York.
In geriatric services, the University of Pittsburgh has adopted a comprehensive approach to evaluating and treating the elderly, performing geriatric and gerontological research, and training the geriatricians needed by this growing population. Consider, for instance, a fictitious but representative 68-year-old widow who presents at our geriatric center with uncontrolled diabetes, depression, and sleeplessness following her husband's recent death as well as slight problems with urinary incontinence.
In addition, she has a fierce determination to remain independent and living at home. She will be seen and evaluated by a host of specialists, a physician assistant, an internist, and a urology who will determine the appropriate therapy for her. This may include consultation with the diabetes clinic, a short period of retraining at the continence clinic, an assessment at the sleep laboratory, and an evaluation by investigators involved with the spousal bereavement project. Also available to her are support services, including home care to facilitate her remaining independent as long as possible, and home visits by general medicine and psychiatric residents in the event of an emergency.
The diversity of resources available to address the needs of this fictitious patient result in large measure from the synergism of academic physicians and researchers who receive extramural funding from the agencies which are allocated moneys consistent with the recommendations contained in your report.
Support for their programs could come from the medical center operating funds as well as from the National Institute on Aging, Diabetes, and Digestive and Kidney Diseases, the National Institute of Neurological Disorders and Stroke, the National Institute of General Medical Sciences, the Eye Institute, the Alcohol, Drug Abuse and Mental Health Administration, and the Agency for Health Care Policy and Research.
Academic medical centers by their nature and mission cannot separate patient care they provide from research, education and training. Medical students, residents and beginning researchers are incorporated in every clinical program at the medical center. The factors affecting the fundamental biomedical research and medical education including Government and agency appropriations must be looked at in conjunction with other Government-related financial pressures on academic medical centers, primarily medicare and medical assistance reimbursement.
Proposed reductions in Medicare indirect medical education, for example, would result in excess of an $11 million shortfall at the university, compounded by an additional shortfall of $8 million due to reformed payment methodology for direct medical education or GME. I am talking about a $19 million burden on our medical center alone.
My time is up. I wanted to thank you for your kind attention to this matter. More detailed testimony is in writing that has been submitted to your committee.
[The statement follows:]
STATEMENT OF THOMAS DETRE, M.D., PRESIDENT, UNIVERSITY OF PITTSBURGH MEDICAL CENTER
Good morning, Mr. Chairman and members of the Subcommittee. My name is Dr. Thomas Detre, and I am the President of the University of Pittsburgh Medical Center. I am pleased to speak with you today about several critical education and health care issues that engage your attention and mine.
The University of Pittsburgh is a 1,500 bed academic medical center comprising two tertiary care hospitals, an acute care psychiatric hospital, an eye and ear specialty pavilion, a comprehensive cancer center, and schools of medicine, dental medicine, nursing, pharmacy, public health, and health related professions. The faculty, staff, and students at the Medical Center are committed to (1) providing compassionate care to patients; (2) advancing scientific knowledge through biomedical research and the development of technology; and (3) educating and training the next generation of medical and health care practitioners.
The interests of the University of Pittsburgh Medical Center-and all other academic medical centers are intertwined inextricably with those of your subcommittee, and it is because of that shared interest that I am here today. It is, in fact, the "educational" process at all levels, funded oftentimes by federal agencies that translates into advancements in patient care. This may sound puzzling, but I shall explain.
As I examined the litany of issues in the full Committee Report for the Department of Health and Human Services for fiscal year 1991, I was struck by the correlation between those issues (and the concern about appropriating funding for them) and the interests of the University of Pittsburgh Medical Center and other academic medical centers. There is a direct connection between the appropriation recommendation for agencies and departments within the Department of Health and Human Services and the patient care, research, and medical education that take place at academic medical centers.
Although our interests include many medical programs such as transplantation and occupational health and safety which receive federal funding from appropriations of your Subcommittee, reference to two other areas of interest will illustrate the connection and the need for your sound and enlightened judgment as you proceed with your Subcommittee work.
The University of Pittsburgh has a vigorous program of research on AIDS. Ongoing studies include clinical trials of two promising drugs, AZT and DDI; a MultiCenter AIDS Cohort Study (a large, multiple center treatment and epidemiological project); research examining when the AIDS virus crosses the placenta and infects the fetus; major epidemiologic and health services research on AIDS; and a recently completed study of AIDS in the western Pennsylvania region by the Health Policy Institute. The University also coordinates the Regional AIDS Education and Training Center (which provides education and training for medical and health care professionals).
External funding for these projects comes from several sources, including the Health Resources and Services Administration, the National Institute of Allergy and Infectious Diseases, and other branches of the National Institutes of Health-all agencies funded through the appropriation recommendations of your Committee. Your appropriations and the health priorities recommended in the appropriations report help determine how the departments and agencies spend their money and what issues they will emphasize. In turn, the departments' and agencies' budget allocations further prioritize the biomedical research and health care issues that will be addressed and funded at medical centers. These decisions, made primarily on fiscal grounds, control national health policy.
The University of Pittsburgh has adopted a comprehensive approach to evaluating and treating the elderly, performing geriatric and gerontological research, and training the geriatricians needed by this growing population. Consider, for instance, a