Committee on Education and the Workforce

House Education & the Workforce Committee

John Boehner, Chairman
2181 Rayburn HOB · (202) 225-4527

BILL SUMMARY

 

Affordability in Higher Education Act

 

March 3, 2004

 

America ’s higher education system is in crisis.  Decades of exploding college cost increases have placed the dream of higher education in jeopardy for millions of low and moderate income students and families.  Republicans in Congress believe a college education should be within reach for any student who strives for it, and, for that reason, the cost crisis in higher education must be addressed head-on.  According to the College Board, during the ten-year period ending in 2002-2003, after adjusting for inflation, average tuition and fees at both public and private four-year colleges and universities rose 38 percent.  Additionally, while tuition has run more than 100 percent ahead of the Consumer Price Index (CPI) since 1981, median family income has risen only 27 percent in real terms.  

 

This trend, if allowed to continue unchecked, will have a devastating effect on students, families and the nation as a whole.  The Affordability in Higher Education Act, authored by Rep. Howard P. “Buck” McKeon (R-CA), would address the rising cost of postsecondary education by holding institutions accountable for cost increases, and empowering students and parents with the information they need to fully exercise their power as consumers in the higher education marketplace.  The bill moves past the rhetoric and provides reforms which will put students and families first.  The Affordability in Higher Education Act seeks to make information about cost increases publicly available and understandable, and to work with institutions to help implement plans to increase college affordability.

 

Empowering Consumers

 

Postsecondary education is more important in today’s knowledge-based workplace than at any other time in our nation’s history.  And as students and families struggle to afford skyrocketing tuition increases, it is more critical than ever before that the consumers of higher education have access to adequate information about the cost of college.  Yet all too often, students and families do not have all the information they need as they navigate the complexities of our higher education system.  The Affordability in Higher Education Act will empower consumers by providing them with access to easily understandable information about the cost of college.

 

The bill establishes a “College Affordability Index,” a standard measure by which the consumers of higher education can understand and compare tuition increases in real terms.  The College Affordability Index is simply determined by comparing tuition and fee increases over a three year period to increases in the rate of inflation over that same time period.  Using data already being reported by colleges and universities, the U.S. Department of Education will make information about college costs, including the College Affordability Index, publicly available through a user-friendly website.

 

Eliminating Unfair Barriers to Students Transferring Credits

 

With recent data showing that more than 50 percent of students attend multiple institutions of higher education, it has become increasingly important that students have the flexibility they need to transfer their credits among institutions. Students who are prohibited from transferring from one eligible institution to another for reasons considered to be territorial or political are faced with the additional costs of repeated course work and extended time to completion. 

 

This legislation does NOT mandate what course work must be accepted by any institution.  It simply states that the agency or association that accredited the institution must not be the sole reason course work is not accepted for transfer.  The course work must be evaluated on its own merits, and not based simply on the accreditor.  In addition, the bill will require that institutions make their transfer of credit policies available to the public. 

 

 Encouraging Solutions: The College Affordability Demonstration Program

 

The Affordability in Higher Education Act was crafted as an effort to explore potential solutions to the college cost crisis, and seeks to proactively assist institutions as they seek innovative strategies that will help keep college affordable. For that reason, the bill also institutes a new College Affordability Demonstration Program.  The demonstration program will allow participating institutions to implement innovative strategies in their delivery of financial aid and education to improve affordability. 

 

Accountability for College Costs

 

Because institutions are already reporting costs data that will be made available to the public, consumer empowerment will be the most immediate result of the Affordability in Higher Education Act.  However, the bill also adds new accountability for dramatic cost increases.  Providing institutions with ample time to meet the challenge of affordability, beginning in 2008 colleges and universities will be held accountable for college Affordability Index scores that exceed 2.0.  Simply stated, if an institution increases its tuition and fees more than two times the Consumer Price Index (CPI) for an interval of three years, it warrants additional attention.  

 

Beginning in 2008, institutions with an Affordability Index above 2.0 must provide the following information to the U.S. Department of Education: (1) An explanation of the factors contributing to the increase in the institution’s costs and in tuition and fees charged to students; (2) A management plan stating the steps the institution is and will be taking to reduce its college Affordability Index; and (3) An action plan, with a schedule, by which the institution will maintain or reduce increases in such costs and tuition and fees.  Because consumers should have access to the steps institutions are taking to improve affordability, management plans will also be made available to the public.

 

Recognizing that some institutions do not control the tuition and fees charged, the state or other body that does set tuition must be involved in addressing the above requirements and in creation of the institution’s management plan.  

 

If the institution fails to comply with its own management plan after two academic years, additional action will be taken that includes the requirement of a detailed accounting of all costs and expenditures.  That information will be made available to the public, and the institution will be placed in “cost affordability alert” status.   

 

Recognition of low-cost schools at the forefront of affordability in higher education.  While significant tuition increases and high college costs appear to be the norm, they are not unavoidable.  In fact, a number of institutions have worked for years to keep higher education affordable for their students.  The Affordability in Higher Education Act recognizes that low-cost institutions may be disproportionately impacted by the College Affordability Index, and for that reason, provides an exemption for these institutions which have clearly made affordability a priority.  The bill would provide an exemption from participation in the requirements of the bill other than determination of the Affordability Index for: (1) Institutions determined to be low-cost, defined as the least costly one-quarter of institutions in their sector; and (2) Institutions whose Affordability Index exceeds 2.0, but does so by less than $500.

 

The General Accounting Office (GAO) will establish and publish a list of institutions that reduce their college Affordability Index score and conduct a study of the policies and procedures implemented by those institutions increasing the affordability of postsecondary education.  That information will be compiled and used to assist in the determination of best practices in extending affordable education to students across the country.  

 

Easing the Burden on Institutions: Reducing Unnecessary Regulations

 

A final consideration in the legislation is the need to reduce administrative and regulatory burdens.  There has been a long-standing effort to reduce unnecessary regulations for both institutions and students.  In an effort to assist in streamlining the HEA and reducing the costs of administering the student aid programs, the FED UP process was developed.  Regulations have been reduced and made more efficient through this process and this legislation encourages states to participate in the effort.  A Sense of Congress in this legislation requests states and the Department of Education to consider, in consultation with institutions, the burden and costs associated with new regulation prior to implementation.