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Bill Ties Tuition Rates to Federal Aid

Bill Ties Tuition Rates to Federal AidRep. Howard “Buck” McKeon,  R-Calif., chairman of the 21st Century Competitiveness Subcommittee, in mid-October, offered legislation that would threaten colleges that don’t limit their rise in tuition rates to less than twice the rate of inflation with the loss of some forms of federal funding.
The bill, which has been debated for many months now in committee, would create a College Affordability Index, comparing tuition and fee increases to the rate of inflation. Colleges whose tuition exceeded the inflation rate by a factor of two would be required to explain why and how they would reduce increases. If they did not comply with their own plans, they would risk losing Title IV federal funding under the Higher Education Act.
“I have long been concerned about decades of dramatic increases in the cost of higher education that are pricing students and families out of the college market,” McKeon says. “I believe we can no longer stand by and allow hard-working students to miss out on the opportunity for a college degree simply because of skyrocketing tuitions.”
In 2008, institutions that have an affordability index over two — or tuition increases at twice the rate of inflation over the previous three-year period — will be required to provide additional information explaining the cost increases and offer a management plan to reduce their score.
They will have to explain the factors contributing to the increase in the institution’s costs and in tuition and fees charged to students. In addition, they will have to construct a management plan stating the steps the institution is and will be taking to reduce its college affordability index. Finally, the institutions will be required to provide an action plan, with a schedule by which the institution will maintain or reduce increases in tuition and fees. The management plans will be made available to the public.
If the institution does not comply with its own management plan after two academic years, it will be placed on a “cost affordability alert” status. If it fails to comply with its plans for an additional academic year, the institution will be removed from participation in programs within Title IV of the Higher Education Act, excluding direct aid to students in the form of Pell Grants and Stafford and Direct Loans.
The bill also enables schools to apply for waivers to policies they believe are causing them to increase their tuition. It also provides exemption from participation in the bill’s requirements to institutions determined to be low-cost — defined as the least costly one-quarter of institutions in their sector — and to institutions whose affordability index exceeds two by less than $500.
Under the bill, the General Accounting Office will publish a list of institutions that reduce their College Affordability Index score and conduct a study of their policies and procedures that make up the best practices used in the provision of affordable education.
The bill also deals with transfer credit policies. It says that the agency or association that accredited the school cannot be the only reason course work is not accepted for transfer. The coursework must be evaluated on its own merits. The bill also requires that institutions make public their transfer credit policies.

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