To amend the Higher Education Act of 1965 to address the rising cost of postsecondary education.

October 16, 2003

Mr. MCKEON (for himself, Mr. BOEHNER, Mr. ISAKSON, Mr. PETRI, Mr. COLE, and Mr. DUNCAN) introduced the following bill; which was referred to the Committee on Education and the Workforce

To amend the Higher Education Act of 1965 to address the rising cost of postsecondary education.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Affordability in Higher Education Act of 2003'.

(b) TABLE OF CONTENTS- The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Reference; effective date.

TITLE I--COLLEGE AFFORDABILITY INDEX

Sec. 101. Establishment of index.

TITLE II--INNOVATIVE APPROACHES TO HIGHER EDUCATION

Sec. 201. College Affordability Demonstration Program.

TITLE III--TRANSFER OF CREDIT

Sec. 301. Requirement relating to credit transfer.

TITLE IV--SENSE OF CONGRESS

Sec. 401. Regulatory burden impact on tuition and fees.

SEC. 2. REFERENCE; EFFECTIVE DATE.

(a) REFERENCE- Except as otherwise expressly provided in this Act, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).

(b) EFFECTIVE DATE- Except as otherwise provided in this Act, the amendments made by this Act shall take effect on the date of enactment of this Act.

TITLE I--COLLEGE AFFORDABILITY INDEX

SEC. 101. ESTABLISHMENT OF INDEX.

Section 131 (20 U.S.C. 1015) is amended to read as follows:

`SEC. 131. CONSUMER INFORMATION AND PUBLIC ACCOUNTABILITY IN HIGHER EDUCATION.

`(a) DATA COLLECTION-

`(1) DATA SYSTEMS- The Secretary shall continue to redesign the relevant parts of the postsecondary education data systems to include additional data as required by this section and to continue to improve the usefulness and timeliness of data collected by such systems.

`(2) INFORMATION FROM INSTITUTIONS- The Commissioner of Education Statistics shall collect, for each academic year and in accordance with standard definitions developed by the Commissioner of Education Statistics (including definitions developed under section 131(a)(3)(A) as in effect on the day before the date of enactment of the Affordability in Higher Education Act of 2003), from at least all institutions of higher education participating in programs under title IV, and such institutions shall provide, the following data:

`(A) the tuition and fees charged for a full-time undergraduate student;

`(B) the room and board charges for such a student;

`(C) the cost of attendance for a full-time undergraduate student, consistent with the provisions of section 472;

`(D) the average amount of financial assistance received by a full-time undergraduate student, including--

`(i) each type of assistance or benefits described in 428(a)(2)(C)(ii);

`(ii) fellowships;

`(iii) institutional and other assistance;

`(iv) loans under parts B and D;

`(E) the number of students receiving financial assistance described in each clause of subparagraph (D); and

`(F) the institutional instructional expenditure per full-time equivalent student.

`(b) DATA DISSEMINATION- The Secretary shall make available the data collected pursuant to this section, including an institution's college affordability index as calculated in accordance with subsection (c), and its affordability alert status (if required under subsection (d)(3)(A)(ii)). Such data shall be made available in a manner that permits the review and comparison of data submissions of individual institutions of higher education. Such data shall be presented in a form that is easily accessible and understandable and allows parents and students to make informed decisions based on the prices for typical full-time undergraduate students and the institution's rate of cost increase.

`(c) COLLEGE AFFORDABILITY INDEX-

`(1) IN GENERAL- The Secretary shall, on the basis of the data submitted under subsection (a), calculate a college affordability index for each institution of higher education submitting such data and shall make the index available in accordance with subsection (b) as soon as operationally possible on the Department's college opportunity on line website.

`(2) CALCULATION OF INDEX- The college affordability index shall be equal to--

`(A) the percentage increase in the tuition and fees charged for a first-time, full-time, full-year undergraduate student between the first of 3 most recent preceding academic years and the last of those 3 academic years, divided by

`(B) the percentage increase in the Consumer Price Index-All Urban Consumers (Current Series) from July of the first of those 3 academic years to July of the last of those 3 academic years.

`(d) OUTCOMES AND ACTIONS-

`(1) RESPONSE FROM INSTITUTION- Effective on June 30, 2008, an institution that has a college affordability index that exceeds 2.0 for any 3-year interval ending on or after that date shall provide a report to the Secretary, in such a form, at such time, and containing such information as the Secretary may require. Such report shall include--

`(A) an explanation of the factors contributing to the increase in the institution's costs and in the tuition and fees charged to students;

`(B) a management plan stating the specific steps the institution is and will be taking to reduce its college affordability index;

`(C) an action plan, including a schedule, by which the institution will reduce increases in or stabilize, such costs and tuition and fees; and

`(D) if determinations of tuition and fee increases are not within the exclusive control of the institution, a description of the agency or instrumentality of State government or other entity that participates in such determinations and the authority exercised by such agency, instrumentality, or entity.

`(2) INFORMATION TO THE PUBLIC- Upon receipt of the institution's report and management plan under paragraph (1), the Secretary shall make the institution's report required under paragraph (1) available to the public in accordance with subsection (b).

`(3) CONSEQUENCES OF FAILURE TO REDUCE COLLEGE AFFORDABILITY INDEX-

`(A) CONSEQUENCES FOR TWO YEAR CONTINUATION OF FAILURE- If the Secretary determines that the institution has failed to comply with the management plan and action plan submitted by the institution under this subsection following the next 2 academic years that begin after the submission of such plan, and has failed to reduce the college affordability index below 2.0 for such 2 academic years, the Secretary--

`(i) shall make available to the public a detailed report provided by the institution on all costs and expenditures and on all tuition and fees charged to students;

`(ii) shall place the institution on an affordability alert status and shall make the information regarding the institution's failure available in accordance with subsection (b);

`(iii) shall notify the institution's accrediting agency of the institution's failure; and

`(iv) may require the institution to submit to a review and audit by the Inspector General of the Department of Education to determine the cause of the institution's failure.

`(B) LOSS OF ELIGIBILITY TO PARTICIPATE- If the Secretary determines that the failure to reduce the college affordability index below 2.0 has continued for 3 academic years after the submission of the management plan, the Secretary shall provide reasonable notice to the institution of action to be taken, after opportunity for a hearing, to remove the institution from participation in all the programs under title IV, other than under subpart 1 of part A, and parts B and D. No such removal shall, in the case of any grant awarded for a multiyear term prior to such removal, result in the termination of such grant before the end of such term.

`(C) INAPPLICABILITY OF LOAN LIMIT INCREASES- Notwithstanding subparagraph (B) and the provisions on annual and aggregate loan limits in parts B and D, no increase in loan limits under part B or D of title IV that is enacted by Congress after the date of enactment of this section shall apply to a loan to cover the cost of attendance at an institution that has lost eligibility to participate in other programs pursuant to subparagraph (B).

`(D) REGAINING ELIGIBILITY- The Secretary shall prescribe procedures by which an institution that reduces its college affordability index may regain eligibility for participation after any removal from participation under subparagraph (B).

`(4) INFORMATION TO STATE AGENCIES- Any institution that reports under paragraph (1)(C) that an agency or instrumentality of State government or other entity participates in the determinations of tuition and fee increases shall, prior to submitting any information to the Secretary under this subsection, submit such information to, and request the comments and input of, such agency, instrumentality, or entity. With respect to any such institution, the Secretary shall provide a copy of any communication by the Secretary with that institution to such agency, instrumentality, or entity.

`(5) EXEMPTIONS-

`(A) RELATIVE PRICE EXEMPTION- The Secretary shall, for any 3-year interval for which college affordability indexes are computed under paragraph (1), determine and publish the dollar amount that, for each class of institution described in subparagraph (C) of this paragraph, represents the maximum tuition and fees charged for a full-time undergraduate student by the least costly quartile of institutions within each such class during the last year of such 3-year interval. An institution that has a college affordability index computed under paragraph (1) that exceeds 2.0 for any such 3-year interval, but that, on average during such 3-year interval, charges less than such maximum tuition and fees shall not be subject to the actions required by subparagraph (B) or (C) of paragraph (1), or any action under paragraph (3), unless such institution, for a subsequent 3-year interval, charges more than such maximum tuition and fees.

`(B) DOLLAR INCREASE EXEMPTION- An institution that has a college affordability index computed under paragraph (1) that exceeds 2.0 for any 3-year interval, but that exceeds such 2.0 by a dollar amount that is less than $500, shall not be subject to the actions required by subparagraph (B) or (C) of paragraph (1), or any action under paragraph (3), unless such institution has a college affordability index for a subsequent 3-year interval that exceeds 2.0 by more than such dollar amount.

`(C) CLASSES OF INSTITUTIONS- For purposes of subparagraph (B), the classes of institutions shall be those sectors used by the integrated postsecondary education data system, based on whether the institution is public, nonprofit private, or for-profit private, and whether the institution has a 4-year, 2-year, or less than 2-year program of instruction.

`(e) FINES- In addition to actions authorized in section 487(c), the Secretary may impose a fine in an amount not to exceed $25,000 on an institution of higher education for failing to provide the information described in this section in a timely and accurate manner, or for failing to otherwise cooperate with the National Center for Education Statistics regarding efforts to obtain data on the cost and price of higher education under this section and pursuant to the program participation agreement entered into under section 487.

`(f) GAO STUDY AND REPORT-

`(1) GAO STUDY- The Comptroller General shall conduct a study of the policies and procedures implemented by institutions in increasing the affordability of postsecondary education. Such study shall include information with respect to--

`(A) a list of those institutions that--

`(i) have reduced their college affordability indexes; or

`(ii) are, as determined under subsection (d)(5)(A), within the least costly quartile of institutions within each class described in subsection (d)(5)(C);

`(B) policies implemented to stem the increase in tuition and fees and institutional costs;

`(C) the extent to which room and board costs and prices changed;

`(D) the extent to which other services were altered to affect tuition and fees;

`(E) the extent to which the institution's policies affected student body demographics;

`(F) what, if any, operational factors played a role in reducing tuition and fees;

`(G) the extent to which academic quality was affected, and how;

`(H) the extent to which policies and practices reducing costs and prices may be replicated from one institution to another; and

`(I) other information as necessary to determine best practices in increasing the affordability of postsecondary education.

`(2) FINAL REPORT- The Comptroller General shall submit a report regarding the findings of the study required by paragraph (2) to the appropriate authorizing committees of Congress not later than July 31, 2010.

`(g) STUDENT AID RECIPIENT SURVEY-

`(1) SURVEY REQUIRED- The Secretary shall conduct a survey of student aid recipients under title IV on a regular and State-by-State basis, but not less than once every 4 years--

`(A) to identify the population of students receiving Federal student aid;

`(B) to describe the income distribution and other socioeconomic characteristics of federally aided students;

`(C) to describe the combinations of aid from State, Federal, and private sources received by students from all income groups;

`(D) to describe the debt burden of educational loan recipients and their capacity to repay their education debts, and the impact of such debt burden on career choices;

`(E) to describe the role played by the price of postsecondary education in the determination by students of what institution to attend; and

`(F) to describe how the increased costs of textbooks and other instructional materials affects the costs of postsecondary education to students.

`(2) SURVEY DESIGN- The survey shall be representative of full-time and part-time, undergraduate, graduate, and professional and current and former students in all types of institutions, and designed and administered in consultation with the Congress and the postsecondary education community.

`(3) DISSEMINATION- The Secretary shall disseminate the information resulting from the survey in both printed and machine readable form.

`(h) REGULATIONS- The Secretary is authorized to issue such regulations as may be necessary to carry out the provisions of this section.'.

TITLE II--INNOVATIVE APPROACHES TO HIGHER EDUCATION

SEC. 201. COLLEGE AFFORDABILITY DEMONSTRATION PROGRAM.

Part G of title IV is amended by inserting after section 486 (20 U.S.C. 1093) the following new section:

`SEC. 486A. COLLEGE AFFORDABILITY DEMONSTRATION PROGRAM.

`(a) PURPOSE- It is the purpose of this section--

`(1) to provide, through a college affordability demonstration program, for increased innovation in the delivery of higher education and student financial aid in a manner resulting in reduced costs for students as well as the institution by accelerating degree or program completion, increasing availability of, and access to, distance components of education delivery, and other alternative methodologies; and

`(2) to help determine--

`(A) the most effective means of delivering student financial aid as well as quality education;

`(B) the specific statutory and regulatory requirements that should be altered to provide for more efficient and effective delivery of student financial aid, as well as access to high quality distance education programs, resulting in a student more efficiently completing postsecondary education; and

`(C) the most effective methods of obtaining and managing institutional resources.

`(b) DEMONSTRATION PROGRAM AUTHORIZED-

`(1) IN GENERAL- In accordance with the purposes described in subsection (a) and the provisions of subsection (d), the Secretary is authorized to select not more than 100 institutions of higher education or systems of such institutions for voluntary participation in the College Affordability Demonstration Program in order to enable participating institutions to carry out such purposes by providing programs of postsecondary education, and making available student financial assistance under this title to students enrolled in those programs, in a manner that would not otherwise meet the requirements of this title.

`(2) WAIVERS- The Secretary is authorized to waive for any institutions of higher education, or any system or consortia of institutions of higher education, selected for participation in the College Affordability Demonstration Program, any requirements of this Act or the regulations thereunder as deemed necessary by the Secretary to meet the purpose described in subsection (a)(1).

`(3) ELIGIBLE APPLICANTS-

`(A) ELIGIBLE INSTITUTIONS- Except as provided in subparagraphs (B) and (C), only an institution of higher education that is eligible to participate in programs under this title shall be eligible to participate in the demonstration program authorized under this section.

`(B) PROHIBITION- An institution of higher education described in section 102(a)(1)(C) shall not be eligible to participate in the demonstration program authorized under this section.

`(C) SPECIAL RULE- Subject to subparagraph (B), an institution of higher education that meets the requirements of subsection (a) of section 102, other than the requirement of paragraph (3)(A) or (3)(B) of such subsection, and that provides a 2-year or 4-year program of instruction for which the institution awards an associate or baccalaureate degree, shall be eligible to participate in the demonstration program authorized under this section.

`(c) APPLICATION-

`(1) IN GENERAL- Each institution or system of institutions desiring to participate in the demonstration program under this section shall submit an application to the Secretary at such time and in such manner as the Secretary may require.

`(2) CONTENTS OF APPLICATIONS- Each application for the college affordability demonstration program shall include at least the following:

`(A) a description of the institution or system of institutions and what quality assurance mechanisms are in place to insure the integrity of the federal financial aid programs;

`(B) a description of each regulatory or statutory requirement for which waivers are sought, with a reason for each waiver;

`(C) a description of the programs being offered and the affected students;

`(D) a description of the expected outcomes of the program changes proposed, including the estimated reductions in costs both for the institution and for students;

`(E) a description of any collaborative arrangements with other institutions or organizations to reduce costs;

`(F) a description of any expected economic impact of participation in the program within the community in which the institution is located;

`(G) a description of how the institution will reduce the costs of instructional materials, including textbooks;

`(H) an assurance that the participating institution or system of institutions will offer full cooperation with the ongoing evaluations of the demonstration program provided for in this section; and

`(I) any other information or assurances the Secretary may require.

`(d) SELECTION- In selecting institutions to participate in the demonstration program under this section, the Secretary shall take into account--

`(1) the number and quality of applications received, determined on the basis of the contents required by subsection (c)(2);

`(2) the Department's capacity to oversee and monitor each institution's participation;

`(3) an institution's--

`(A) financial responsibility;

`(B) administrative capability;

`(C) program or programs being offered via distance education;

`(D) student completion rates; and

`(E) student loan default rates; and

`(4) ensuring the participation of a diverse group of institutions with respect to size, mission, and geographic distribution.

`(e) NOTIFICATION- The Secretary shall make available to the public and to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Education and the Workforce of the House of Representatives a list of institutions and systems of institutions selected to participate in the demonstration program authorized by this section. Such notice shall include a listing of the specific statutory and regulatory requirements being waived for each institution or system of institutions and a description of the distance education courses to be offered.

`(f) EVALUATIONS AND REPORTS-

`(1) EVALUATION- The Secretary shall evaluate the demonstration program authorized under this section on a biennial basis. Such evaluations specifically shall review--

`(A) the number and types of students participating in the programs offered, including the progress of participating students toward recognized certificates or degrees and the extent to which participation in such programs increased;

`(B) issues related to student financial assistance for distance education;

`(C) effective technologies and alternative methodologies for delivering student financial assistance;

`(D) the extent of the cost savings to the institution, the student, and the Federal Government by virtue of the waivers provided, and an estimate as to future cost savings should the demonstration program continue;

`(E) the extent to which students saved money by virtue of completing their postsecondary education sooner;

`(F) the extent to which the institution reduced its tuition and fees and its costs by virtue of participation in the demonstration program;

`(G) the extent to which any collaborative arrangements with other institutions or organizations have reduced the participating institution's costs; and

`(H) the extent to which statutory or regulatory requirements not waived under the demonstration program present difficulties for students or institutions.

`(2) POLICY ANALYSIS- The Secretary shall review current policies and identify those policies that present impediments to the development and use of distance education and other nontraditional methods of expanding access to education.

`(3) REPORTS- The Secretary shall provide a report to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Education and the Workforce of the House of Representatives on an annual basis regarding--

`(A) the demonstration program authorized under this section;

`(B) the results of the evaluations conducted under subsection (f);

`(C) the cost savings to the Federal Government by the demonstration program authorized by this section; and

`(D) recommendations for policy, statutory, or regulatory changes to increase the efficiency and effective delivery of financial aid.

`(g) OVERSIGHT- In conducting the demonstration program authorized under this section, the Secretary shall, on a continuing basis--

`(1) ensure compliance of institutions or systems of institutions with the requirements of this title (other than the sections and regulations that are waived under subsection (b)(2));

`(2) provide technical assistance to institutions in their application to and participation in the demonstration program;

`(3) monitor fluctuations in the student population enrolled in the participating institutions or systems of institutions;

`(4) monitor changes in financial assistance provided at the institution; and

`(5) consult with appropriate accrediting agencies or associations and appropriate State regulatory authorities.

`(h) TERMINATION OF AUTHORITY- The authority of the Secretary under this section shall cease to be effective on October 1, 2010.'.

TITLE III--TRANSFER OF CREDIT

SEC. 301. REQUIREMENT RELATING TO CREDIT TRANSFER.

(a) PROGRAM PARTICIPATION AGREEMENTS- Section 487(a) (20 U.S.C. 1094(a)) is amended by adding at the end the following new paragraph:

`(24)(A) The institution will not exclude the transfer of credits earned by a student completing courses or programs at other eligible institutions of higher education solely on the basis of the agency or association that accredited such other eligible institution if that agency or association is recognized by the Secretary pursuant to section 496 to be a reliable authority as to the quality of the education or training offered and is currently listed by the Secretary pursuant to section 101(c).

`(B) The institution will base decisions on whether to accept such credits on the basis of whether (i) the courses or programs are equivalent in content to the courses or programs offered by the institution, and (ii) the student completed such courses or programs at the institution's required level of proficiency.

`(C) The institution will report publicly, on an annual as well as a three-year rolling average basis, the percentage of credits accepted in transfer and fully counted toward the degree or certificate completion requirements of undergraduate students. Such data shall be disaggregated to report on the following categories of institutions from which credits were accepted in transfer: (i) nationally accredited; (ii) regionally accredited in the same State; (iii) regionally accredited in the same region; and (iv) regionally accredited in a different region.'.

(b) ACCREDITING AGENCY AND ASSOCIATION REQUIREMENTS- Section 496(a) (20 U.S.C. 1099b(a)) is amended--

(1) by striking `and' at the end of paragraph (7);

(2) by striking the period at the end of paragraph (8) and inserting `; and'; and

(3) by adding at the end the following new paragraph:

`(9) such agency or association not adopt or apply standards, policies, or practices that restrict or deny the transfer of credits earned by a student completing courses or programs at other eligible institutions of higher education solely on the basis of the agency or association that accredited such other eligible institution if that agency or association is recognized by the Secretary pursuant to this section to be a reliable authority as to the quality of the education or training offered and is currently listed by the Secretary pursuant to section 101(c).'.

(c) ACCREDITING AGENCY STANDARDS- Section 496(a)(5) (20 U.S.C. 1099b(a)(5)) is amended--

(1) by striking `and' at the end of subparagraph (I);

(2) by inserting `and' after the semicolon at the end of subparagraph (J); and

(3) by inserting after subparagraph (J) the following new subparagraph:

`(K) policies for the transfer of credit and the notification of the public of such policies;'.

TITLE IV--SENSE OF CONGRESS

SEC. 401. REGULATORY BURDEN IMPACT ON TUITION AND FEES.

It is the sense of Congress that--

(1) reducing administrative and regulatory burdens within the Federal student financial assistance programs will improve efficiency and reduce the costs associated with the management of such programs, as well as increase the affordability of postsecondary education for all students;

(2) in consultation with postsecondary institutions, States should take an active role in reviewing and modifying administrative and reporting requirements for institutions and students within the student financial assistance programs controlled by such States, in an effort to reduce such burdens and costs; and

(3) the Department of Education and the States, in considering the implementation of regulations or administrative requirements, should take into consideration and determine the amount of additional burden and costs being placed on institutions and students before such regulation or administrative requirement is implemented.

END