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Call for Colleges to Contain Costs Takes Center Stage

Talk of containing the soaring cost of college took center stage yesterday and today in a speech by U.S. Secretary of Education Arne Duncan and in a hearing on Capitol Hill.

Yesterday, Duncan spoke at the Federal Student Aid conference in Las Vegas and challenged colleges to do more to be innovative and efficient in the way they operate. In his speech, Duncan said containing the costs of college and student debt is some of the most controversial and thankless work in all of higher education.

"There are no ribbon-cutting ceremonies and named chairs for college leaders who increase productivity and efficiency on their campus. There is no award banquet for the college president who does more with less," he said. Yet nearly every college president and governing board seeks to simultaneously improve quality, increase access, and constrain costs, Duncan said.

"It's true that these three sides of the iron triangle—quality, access, and cost—sometimes seem like mutually conflicting choices," said Duncan. "Elevating quality can raise costs. Expanding access can also raise costs because additional services and assistance to students may be necessary. And reducing costs might impair both quality and access. Yet I don't believe that this challenge is higher education's mission impossible."

He challenged audience members to take back to their campuses the idea that productivity and accountability are reform tools that can help postsecondary institutions break out of the trap of the iron triangle. "With higher productivity and better accountability, institutions of higher education can boost both quality and access and constrain costs, all at the same time," said Duncan.

The secretary highlighted the administration's efforts to ease student-loan debt, educate borrowers, and develop gainful-employment regulations. He also discussed new initiatives, such as the proposed College Completion Incentive Grants that would reward states and institutions for undertaking systematic reforms that increase the number of students who complete college and that close achievement gaps. He also spoke of the First in the World Fund that would support institutional programs that use innovative practices to accelerate learning, boost completion rates, and hold down tuition.

In turn, Duncan encouraged the higher education community to take steps to control costs and net price. He praised campuses that were radically redesigning courses and making smarter use of technology and curriculum to cut costs while accelerating learning. He also applauded dozens of colleges and universities that have either cut or frozen tuition, or provide a four-year graduation guarantee, where the college agrees to cover the cost of the extra time it takes a full-time student to graduate.

"Together, our challenge is that these promising innovations for controlling costs are still the exception today. I want them to be the norm," he said. "Our students deserve no less. And collectively—with your commitment and your creativity—I believe we can succeed in containing the growth of college costs and student debt."

On the Hill today, the Subcommittee on Higher Education and Workforce Training, chaired by Rep. Virginia Foxx (R-N.C.), held a hearing entitled, "Keeping College Within Reach: Discussing Ways Institutions Can Streamline Costs and Reduce Tuition."

The hearing underscored how the price of college has risen dramatically in the past decade and pointed to several factors, including tighter state budgets and increases in costs of employee benefits, driving up costs. While the federal government has increased Pell Grants and other aid, the message to higher education institutions was that they must find ways to offer high-quality education in a more cost-effective manner, and state governments must improve their systems for supporting students and schools.

In her opening statement, Foxx suggested the answer to rising costs was not in "loan-forgiveness gimmicks or a federal takeover of the student loan-industry."

"As we continue to rethink our role in education, we should use our influence to encourage accountability and transparency. Our end goal should be for states, postsecondary institutions, and students to determine the best path forward," accordin to her written statement.

Foxx maintained that higher education has not kept up with the times. To help reduce tuition and fees, colleges should be looking for innovative ways to incorporate new technology and better address student needs. "Under the current system, there is little incentive for schools to enact lasting changes or accountability measures for the billions of taxpayer dollars spent each year," she said. "States, students, and parents must demand accountability for the investment, not depending solely on the federal government."

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