Thank you. It is great to be here with you this morning. I have spent the better part of my career working with the Department of Education, both on the inside and outside. During most of that time I have been working to improve access to postsecondary education for all Americans. Now, as the Department's Deputy Secretary and as a parent of college-age children, I know that an affordable college education is more important than ever. I know that our higher education system works. But each of us knows that our system doesn't work perfectly and that there is much work still to be done if we are to realize the promise of America.

Even before he took the oath of office, President Bush has demonstrated his commitment to ensuring that every child has access to a quality education. That commitment starts with the reforms in the No Child Left Behind Act, ensuring that all children have a highly qualified teacher in the classroom and that all children receive a high quality elementary and secondary education. And the goal of a high quality education doesn't stop at high school—it is applicable to postsecondary education as well. Students need to start college as real learners, instead of as remedial learners.

The President's commitment is especially evident when we look at the importance he places on closing the achievement gaps among students in education. In a nation so rich in opportunities as ours, it is hard to believe that so many children are being left behind. The most recent National Assessment of Educational Progress illustrates some of the challenges we face:

• Only 32 % of fourth graders can read proficiently at grade level and that percentage drops to 26% in urban areas; and
• If you look at ethnic groups the achievement gap is even more striking; 40% of white fourth graders read at or above the proficient level, while only 12% of blacks and 16% of Hispanics perform that well.

At the postsecondary level, 40% of our high school graduates do not enroll in postsecondary education. That is a startling statistic when you consider that 80% of the jobs that are growing and providing self-supporting salaries in our economy require some postsecondary education and training.

As in the case of K-12 education, achievement rates in postsecondary education drop significantly for students who are black or Hispanic or from lower-income families. Far fewer of these students go on to graduate and professional school. And all of this must be viewed against the backdrop of a growing gap in earning potential between those with a postsecondary education and those without. Clearly, we must do a better job in opening the doors of opportunity to all who qualify.

We must also take note of the transformation that has taken place on our campuses in recent decades. Less than 20% of today's college students fall under the public's traditional view—full-time students between 18 and 22 who live on campus. Today's students have differing needs and expectations than even those of even a decade ago. And the demands on postsecondary education have increased and are more diverse than ever before. That means that we all need to work together to find ways to move away from the "one size fits all" approach that dominates the delivery of postsecondary education, offer students more choices in how they participate in their own education, and make sure that our financial aid system doesn't get in the way of this.

So how do we get where we need to be? To get results we must reach out to those who need our help most and demand the best from our colleges and universities. We're putting the finishing touches on our Strategic Plan outlining the President's and the Secretary's priorities in education for the next five years. This plan also provides a roadmap for the transforming the Department of Education—holding our employees accountable for results and rewarding them if they succeed.

In that plan we have laid out our concrete goals for increasing access to postsecondary and adult education and for enhancing educational quality. We aim to set high, but attainable goals to prepare students for college—particularly students who are from low-income and minority backgrounds—reach out to non-traditional students and people with disabilities, and work together to improve the completion and retention of students once they get in. We will start with a solid foundation built on the historic education reforms included in the President's No Child Left Behind Act. These reforms help our neediest students out of failing schools and provide them with the basic skills they will need to flourish in postsecondary education. But we must also ensure that those who walk through the doors of opportunity opened by the No Child Left Behind Act do not find later that the gates of college are closed to them because the cost is not affordable.

To achieve these goals we are providing more money than ever before as well as demanding more to ensure that education funds are being invested in sound practices that will bring about results. The President's 2003 budget request for education provides a $1.4 billion increase for a total of $50.3 billion in discretionary spending. This record budget reflects the substantial investments in recent years that have grown from $23 billion in 1996 to $48.9 billion last year—an increase of 113 percent.

Our 2003 budget request for student financial assistance would make more than $55 billion in aid available to over 8.4 million students and their parents, nearly half a million more than last year. In addition, more students are receiving Pell Grants now than at any point in the history of the program—over 4 million recipients. We are also committed to not cutting the maximum Pell grant of $4,000 —the highest point in the program's history—because of funding shortfalls. As many of you know, when Congress wrote the check for the Pell Grant program last year, it was returned marked "insufficient funds. " We've asked for a $1.3 billion supplemental 2002 appropriation to make up for the underfunding, but Congress needs to provide the funds to pay for this. We hope that you will support us in our efforts to maintain fiscal responsibility in the Pell Grant program.

In our budget, we are also encouraging more students to pursue teaching careers in high-need areas by expanding loan forgiveness from $5,000 to a maximum of $17,500 for math, science, and special education teachers serving in low-income communities. We need to work together to encourage more highly qualified individuals to teach in these subjects in schools where they are critically needed.

Finally, we are committed to helping America answer President Bush's call for every American to commit at least two years—4,000 hours over the rest of their lifetime—to the service of their neighbors and their nation. The new USA Freedom Corps will respond in case of crisis at home; rebuild our communities; and extend American compassion throughout the world. We firmly believe that many of the 15 million students enrolled in colleges across the country are prepared to answer the President's call to service and will carry with them a renewed sense of responsibility, service and citizenship. We are committed to working with the higher education community as we develop legislative proposals to ensure that those proposals are fair and workable for colleges.

To make sure that the cost of college does not become a barrier to opportunity, the Department needs to work together with colleges, states, and other organizations to make sure that our education financing system is meeting the needs of today's students, as well as the students of tomorrow. We especially need to make sure that the elaborate systems and rules we have set up to help students do not result in something so confusing and frustrating that it keeps students out of school instead of getting them in.

Toward this end, I accepted the recommendation of the Advisory Committee on Student Financial Assistance, and have recently directed the PBO to begin work on implementing the Simplified Needs Test to reduce the application burden on our neediest borrowers. Making the first step of the financial aid process easier for our neediest students is important and long overdue. I am also mindful that in our rush to provide services electronically we must never forget the millions of needy students who may not have access to the Internet, and we need to continue to ensure that all needy students benefit from our modernization efforts, not just a few.

I am also happy to report that this Administration's first regulations in student aid will be to reduce regulatory burdens on colleges rather than add to them. Working closely with House Chairman Buck McKeon, we are acting on many of the over 3,000 responses to his "Fed Up" regulatory relief initiative for higher education. We also took a fresh look at some of our requirements and proposed some additional areas of regulatory relief. Let me be clear, however: reducing regulatory burdens does not mean less accountability. In fact, it means just the opposite. We will be expecting greater accountability for results in exchange for less regulation.

Earlier this year, we selected two dozen experienced, knowledgeable administrators from colleges and other organizations—real people like you who work with the regulations every day, not hired Washington lobbyists. We also took that same approach in bringing together parents, teachers and others to be the negotiators for the regulations on the No Child Left Behind Act.

Your colleagues who are working on this deregulation effort hail from campuses across the country and represent a variety of institutions. Right now as we speak, they are busy back in Washington working together to bring common sense to the current regulations, cut some of the red tape, and provide you and your staff with more flexibility to better meet the needs of your students.

While a number of the proposed changes require Congress to amend the law, we have been able to make headway on a number of regulatory items such as paperwork requirements, unneeded restrictions in the GEAR UP program, and reducing barriers to distance education and other innovative ways of delivering instruction. I urge you to attend the session on Friday morning to get an update on their progress, which is a testament to what can happen when we work together toward a common goal. It is a sign of great things to come.

President Bush has high expectations of the Department of Education. He speaks with great pride and enthusiasm about the work of the Department and the new culture of accountability that is taking root. We are making steady progress in addressing the Department's longstanding management problems, particularly in the student aid programs. Part of this progress means changing our focus to our core responsibilities. That is why Secretary Paige approved renaming the Office of Student Financial Assistance to "Federal Student Aid", effective today. We are not the national financial aid office. In making this change we recognize that most of the financial aid in this country does not come directly from the Federal government. We also recognize that campus aid administrators play the paramount role in helping more Americans afford the dream of a college education. Your students are your customers, and we should not get in the way of that. We should do everything that we can do to modernize the Federal systems to help you meet students' needs and provide them with excellent service. Then we need to step out of your way.

We also need to move away from issues that divide us. Today, we are here together as one community with a common purpose, further evidence that the war between Direct Loans and FFEL is over. Continuing the battles of the past does little to help the students of tomorrow. No one is well served by doing this, and we need to move beyond it and do what is in the best interests of all students who depend on us.

At this conference, we'll also officially kick off our reauthorization effort with a series of "town meetings", which are being led by Jeff Andrade of my staff, to begin to get your suggestions for reauthorization of the Higher Education Act next year. We're also putting up a new web page so that you and the rest of the higher education community can share your ideas with us as we move forward in this process. Led by the President's choice for Assistant Secretary for Postsecondary Education, Sally Stroup, who we hope the Senate will confirm shortly, we plan to continue more of this type of dialogue with education leaders and campus officials over the coming year. I expect that Sally's experience in working with the higher education community and in guiding the 1998 Higher Education Amendments through the Congress will enable the Department to play a strong leadership role during this reauthorization process.

In closing, let me thank you for the work that you do day in and day out in opening the doors of opportunity to millions of Americans. None of you will probably ever fully know the impact of the work you do—the people you touch and the impact that their education will have on our society. This is an awesome responsibility, and in my view, there is no greater calling. I hope you will continue to work with us in our mission to achieve results and leave no one behind in our education system. The future is one of great potential and boundless opportunities. Let us learn from the past, act in the present and look forward to the promise of tomorrow.

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