It is a special pleasure to speak to you today because it gives me the
opportunity to do something I’ve wanted to do for some time: say “thank
you.” Thank you for the wonderful work you do. I know very well how
important the work of financial aid administrators is, because student
aid has been one of the most important elements of my personal and
professional life…starting with the fact that I probably wouldn’t be
standing here speaking to you today without it.
When I was an undergraduate the cost to attend college was
pretty low. But I was a first generation college student, with five
siblings still under my parents’ roof. I knew calling home to ask my
folks for money if things got tight was not an option. The Work-Study
program at my institution and state aid programs helped me pay my bills,
or I might never have graduated without it.
Years later, when I was president of Buffalo State College,
that undergraduate experience gave me a deeper, personal understanding
of how vitally and intimately student assistance is connected to access
and opportunity. So many of the students at Buffalo were in the same
situation I had been in: hard working, low income, first generation
young people who would not have made it to graduation without financial
Because I knew from life—not theory—how important aid was not
only to our students’ success but also to the success of our
institution, I made it a point as president, to work closely with our
student financial aid administrators.
By partnering with the financial aid professionals, I had an
early warning system to alert me to trends that meant hardships on our
students – everything from how many students were at risk of default, to
how the price of books in the book store were stressing student
budgets. I also paid particular attention to students in good academic
standing who were experiencing financial challenges. This past January
at my former institution the number of students in good academic
standing but in need of aid to continue their education was nearly 300.
Today, as President of AASCU, student aid remains a critically
important aspect of my work. Access, affordability and educational
opportunity are at the heart of AASCU’s mission. That puts student aid
front and center at our more than 430 institutions.
More than three million AASCU undergraduates receive aid. Many
are first generation students. About a third of the full time
undergraduates receive aid use Pell Grants, and roughly 46% of them
receive federal loans and over 50% are minority students. To put it
another way, many of our students won’t graduate, and many of our
institutions won’t succeed without strong, vibrant student aid programs.
If I’d said what I just did about student aid 18 months ago, I
could have probably just stopped there and moved on. But the last 18
months have been historic—and not in a predictable good way.
Throughout my higher education career, I have lived through
several recessions. I’m sure you worked through a least one or two, as
well. Each time, the economy recovered fairly well and fairly quickly.
But what we’re going through now is something fundamentally different.
I’m sure all of you are much more familiar with all the grim economic
statistics than I am. So I’ll just say that this recession is so
devastating that it’s changing the playing field.
Every week I receive calls from presidents seeking advice on
how to handle budget cuts. All of them say this has been the most
difficult year of their presidency.
True, we’ve seen some glimmers of hope in the national economy
over the last few weeks. And if we’ve learned anything over the last
couple years, it’s that making economic predictions is not what you’d
call an exact science.
However, I’m afraid that for colleges and universities we’re not
going to “return to normal.” “The good old days” before the recession of
2008 and 2009 are gone forever. Even when the recession officially
ends, higher education will have to get used to a “new normal,” that
will make all of our lives more difficult.
Don’t look for state budget surpluses to return any time soon.
State budgets, which we depend on, will continue to be stressed. More
than half the states already anticipate deficits for fiscal year 2011,
even after big cuts in fiscal year 2009, and more reductions in fiscal
year 2010. It’s easy to understand why. After their biggest drop in 50
years, state tax receipts are not rebounding. Believe it or not, even
gambling revenues are down. And 2012 is now being projected as our most
difficult fiscal year.
At the same time, states confront increasing costs in health
care, state pension programs, prisons, k- 12 education and other areas.
The stimulus bill did contain money for state higher education budgets;
it is one time money and will barely replace what states are losing from
crashing sales, income and property taxes.
While funding continues to decline, one critically important
aspect of higher education is on the rise: enrollment is surging,
especially at AASCU members and other state colleges and universities.
The result? For colleges and universities, the “new normal” will feature
a collision between these two giant waves – pressure to cut back on
higher education to rescue budgets will be smashing into rising demand
for access to higher education.
I hope I’m wrong, but I believe the outcome of this collision
will be some of the greatest threats to access and educational
opportunity in decades, as pressure rises to cut back or re-direct
We can see the first signs already.
- Credit remains tight for some states’ student loan programs.
- Some states are scaling back their student aid and scholarship programs.
- Some are reducing or ending state loan forgiveness programs,
which were aimed at encouraging students to pursue occupations
–teachers, doctors, etc. -- or serve in areas where society’s needs
aren’t being met.
In addition, as state funding shrinks, colleges are under
pressure to increase efficiency and graduation rates, diverting aid from
needy students to “better” students. I’m concerned that they will seek
students who already come to college well prepared, because they will be
more likely to graduate and boost completion rates.
In fact, a recent report from The Education Trust found that
flagship public universities “continue to enroll students who are
significantly richer and significantly whiter than the state populations
they are supposed to be serving.” The report added, “many of these
universities direct aid to wealthy students who will attend college
without it… In fact, some low-income students who literally cannot
afford to attend college without a grant must find a way to finance the
equivalent of 70 percent of their family’s annual income.”
Those are the trends. Here are some of the voices behind them.
- Joaquin Beltran, 25, is a senior studying political science
and is president of Associated Students Inc California State
University’s Los Angeles campus. When he learned his tuition was going
up, he said, “I’m one of those students…who is working and living
paycheck to paycheck. I can’t afford this increase.”
- Ezra Kazee has $29,000 in student debt and has been unable
to find a job since graduating from Winona State University in Minnesota
last May. He says, “You often hear the quote that you can’t put a price
on ignorance. But with the way higher education is going, ignorance is
looking more and more affordable every day.”
- And when a Kentucky agency cut back its program to forgive
student loans for schoolteachers, Travis B. Gay knew he and his wife,
Stephanie — both special-education teachers — were in trouble. “We’d
gotten married in June and bought a house, pretty much planned our whole
life,” said Gay. Now “it’s going to be very difficult for us to make
our student loan payments, house payments and just eat.”
Those are some of the challenges the New Normal poses for
students. What about the challenges to institutions and to the people in
this room, our chief financial aid administrators?
About the only good thing I can say about this terrible
recession is—to paraphrase Samuel Johnson – who said an economic
meltdown does tend to focus the mind wonderfully. Everyone in higher
education now knows that adjustments at the margin won’t work any more.
Instead, we need fundamental change.
But where should we start? It may sound a little strange, but I
think we have to begin the process of change by going back to basics:
re-dedicating ourselves – presidents and chief financial officers
alike—to the bedrock goals of public higher education.
As Russ Meyer and Joseph Garcia, Provost and President of Colorado State University-Pueblo recently wrote, “Higher
education is about more than just cost efficiencies; it is about access
to education that allows people to build better lives, become more
productive citizens and, yes, pay more taxes as a result of higher
wages. [Colleges and universities] were formed to bring education to
the people, not to make it more difficult for them to attain.”
Access, equity and opportunity—these are what AASCU is all
about; the goals I devoted my career to during the “old Normal,” are the
goals the higher education community must continue to pursue now. I say
that not just because George Washington Carver had it right when he
wrote, “Education is the key to unlock the golden door of freedom.”
Access and equity in education are noble objectives and more. They are also what we need to thrive as a nation in the 21st Century economy.
President Obama recently said, “The source of America's
prosperity has never been merely how ably we accumulate wealth, but how
well we educate our people. This has never been more true than it is
As he pointed out, by 2016, four out of every 10 new jobs will
require at least some advanced education or training. And yet, in just a
single generation, America has fallen from 2nd place to 11th in the
world in the portion of students completing college. The Lumina
Foundation estimates that if colleges continue to graduate students at
current rates, by 2025 the United States will fall short by 16 million
in the number of college educated workers needed to keep up with
The only way the nation will be able to fill that gap is by
strengthening access and opportunity – ensuring that minority, immigrant
and first generation students have the chance to enter colleges and
universities and complete their studies. Those are exactly the young
people who are most in need of financial assistance and who will
comprise the largest majority of college age students.
Unfortunately, reaffirming a commitment to equity and access is
the easy part. Pursuing those goals while ensuring that colleges and
universities survive and thrive in the new normal is what gives higher
education leaders gray hair. The job of presidents and aid
administrators has always been a high wire balancing act. Now we have to
keep our balance in a hurricane—juggling the short and long terms, the
needs of the underserved and fiscal constraints, all while trying to
rally our stakeholders to give us the support needed to make changes.
Let me offer a few thoughts on how to stay upright on that
tightrope. They are ideas based on experience—my own and that of AASCU
If you haven’t seen it yet, I highly recommend a new report by
The Southern Regional Education Board. The board studied the ways 15
AASCU colleges and universities were able to improve their degree
completion rates. The report noted “Financial aid officers …play a
critical role in degree completion, especially for students with
What I’ve found is that the key is for Presidents and financial aid officers to develop creative ways to work together.
First, they should look for new ways to work together within
their own campus. For example, colleges and universities should create
new forms of cooperation and improved communications between their
presidents and their chief financial aid officers. A close relationship
between these two groups exists on some campuses already. However, on
far too many, I’ve found that the financial aid office is in its own
silo, two or three tiers removed from the office of the President. That
won’t work in the new normal.
In the 21st Century, the financial aid office should have a
direct and regular communication channel to the president, so that aid
officers can be effective advocates for students. In particular, chief
financial aid officers should be reporting on challenges and trends:
which groups of students are in danger of dropping out? Are there
specific issues – the price of books, unexpected costs, changes in the
economy – that are putting certain students at risk?
In addition, presidents should ensure that other administrators
share information with financial aid officers to help ensure that
students are receiving the help they need. Financial aid officers should
have access to data on students’ academic progress or attendance.
You can find real life examples of this at several AASCU
institutions, including Sam Houston State University in Texas. At that
institution, financial aid staffs regularly refer students to other
campus offices for help with study skills, reading and writing.
Presidents should also work to ensure that financial aid
officers get involved with students even earlier than they do now –
during the recruitment process. At one of our institutions, Elizabeth
City State University, a historically black institution in North
Carolina, financial aid staff often visits local high schools in the
region throughout the year. They help students understand that college
is possible for them and help them complete financial aid applications.
In addition, Presidents and chief financial aid officers should
work together to find ways to use student aid to create incentives for
students to complete their degrees and achieve at high levels. Northwest
Missouri State University, for example, has had great results providing
financial aid incentives for students earning high GPAs and making good
Presidents and financial aid officers could also be working
together to reach their most important outside audiences. I’ve found
that when Presidents fundraise, they typically bring along a student or
two to tell their stories. That’s a wonderful approach. But in the New
Normal, the chief financial officers should be there, too. That would
give them the opportunity to talk about the challenges facing student
assistance, describe how the institution is meeting them, and lay out
how the alumni and other donors can help. Take my word for it, that
approach worked at Buffalo and can work on your campus.
In addition, financial aid officers should be part of the team
the President takes along when making the institution’s case to a state
legislature for funding. Chief financial aid officers can do a lot to
demonstrate that the state funds are going to students, to help them
Now, having offered you that list of recommendations let me
make a commitment. AASCU will take the lead in fostering the kind of
cooperation I’ve just spoken about. We will launch an initiative to
encourage the presidents of our institutions to reach out to chief
financial officers in new ways. We will make available to them the best
practices, the forms of cooperation that have proven effective in
maintaining access and improving completion rates, even in the face of
all the challenges of the new normal. We also continue to meet with Bill
Taggart of the Department of Education to refine federal aid dollars
and tools such as IBR. We believe that there are enough tools and
opportunities to avoid student defaults.
And of course, I’ve got something to ask in return. I think
COSUAA could play a terrific role in communicating to opinion leaders
and the general public how the challenges of student aid have been
changed by the New Normal – what institutions of higher education are
doing in response, and what we need from federal and state governments
as well as foundations and private donors. Working together, we could
really make some waves. Forward your points of interest to myself or
You were kind enough to invite me to come here from Washington
DC where AASCU is headquartered, so let me talk just briefly about some
of the latest developments in the nation’s capital, and how they might
affect the New Normal.
I may be wrong, but I’d bet that the people in this room are
one of the few groups of Americans who were most concerned about the
“education” part of the Health Care and Education Reconciliation Act
that President Obama signed last month. As you well know, that Act
replaces the old bank-subsidy student loan program with direct lending
by the Department of Education. It will generate $61 billion in savings
over the next 10 years, part of which will be used to help expand the
Pell Grant program. Over all, it’s wonderful news for higher education
and for students.
But this change also poses a challenge for the higher education
community, which we must take very seriously. As we discussed the
legislation with the Department of Education, we discovered that one of
the difficulties in keeping students out of default was simply keeping
track of them. Students with loans would move, or graduate, or transfer.
The Department would lose track of them. The grace period on loans
would expire, without the students being aware that they had to start
making payments. So students would slip into default. With the huge
expansion of direct lending, colleges and universities will have to
develop new tools to keep track of students with loans, and help prevent
defaults. We need help with new campus models that are easy to
implement and scalable.
While we have to make changes to respond to the most pressing,
near term challenges posed by the New Normal, I want to take a few
minutes to talk about the long term, as well.
Even as we create innovative ways to meet the financial needs
of students, over the long term institutions will have to more fully
understand both our core activity of teaching and the core product of
student learning. One way to do that is to take a hard look at what we
are doing. We can learn from the recent expansion of for-profit
institutions, gaining from the student- and learning-centered aspects of
enterprises such as the University of Phoenix, while preserving
Also let me mention Volunteer System of Accountability (VSA).
Developed by APLU and AASCU, the cost estimator calculator will be up
and running shortly to help students and families.
Second, while we reaffirm our commitments to access and
opportunity, I strongly believe that public institutions in particular
must continue to pursue our role as what we at AASCU calls “stewards of
place.” That is, our campuses engage the communities and regions we
serve—helping to advance economic development and the quality of life
for all with whom we live. To me, that commitment is not only what
public higher education is all about. It also opens up the possibilities
of new forms of partnerships with private, non-profit, philanthropic
and local governmental entities. These partnerships will help us meet
the financial and academics needs of students and communities during the
Finally, to meet the needs of the new normal, we need some new
creative approaches. For too long, our state leaders have tried to “fix”
financial aid and other fiscal issues by sticking one band-aid on top
of another. The result is that now they have brought campus funding
mechanisms to a near collapse. No campus and no system can continue to
sustain crisis after crisis, with reductions becoming a routine
So our model is broken and we must convene groups at all levels of higher education to focus on developing the new “normal.”
Let me conclude by saying that although I’ve talked a lot about
the problems and challenges we face in the New Normal, I also believe in
the Chinese proverb that says, “A crisis is an opportunity riding the
For the presidents and financial aid administrators, the crisis
of the “New Normal” has created opportunities to take bold action.
Working together we can seize those opportunities, ensure that our
institutions have a bright future, and provide future generations the
support, opportunity, and access they, and America need.